Deathbed Gifts – What are they and how do they work?
A deathbed gift is a mechanism by which an individual can make gifts of their property and assets that will take effect on their death and will pass outside of their Will or the intestacy rules. The principle dates back to Roman times and the recent judgement in Davey v Bailey [2021] demonstrates how the principle has recently been interpreted by the courts.
What makes a valid deathbed gift?
The three requirements that must be met in order to form a legally valid deathbed gift were summarised by Jackson LJ in the 2015 case of King v The Chiltern Dog Rescue and Redwings Horse Sanctuary [2015] EWCA Civ 581. To constitute a deathbed gift, the donor must:
- Contemplate their impending death;
- Make a gift that will only take effect if and when their death actually occurs; and
- Deliver ‘dominion’ over the subject matter of the gift to the recipient.
The ‘impending death’ does not need to be inevitable, but there must be good reason for the donor to anticipate their death in the near future from an identified cause.
Until the contemplated death occurs, the donor also ought to have the right to revoke the gift, and the gift will fail if the death does not occur in the identified manner.
Jackson LJ considered that the term ‘dominion’ refers to either the physical possession of the subject matter of the gift, some means of accessing it or the documents that evidence possession of the subject matter.
Further to the above three stage test is the final requirement of mental capacity; the donor must have the necessary capacity to make the deathbed gift which is assessed dependant on the subject matter of the gift. If the gift is of relatively low value, the required capacity is somewhat low, but as the gift becomes more valuable and significant, the level of mental capacity required will reach that which is required to make a valid Will.
The Recent Case of Davey v Bailey [2021]
The Facts
Alan and Margaret Bailey died in 2019, leaving no children and both leaving a Will dated 28 May 2009 naming the other spouse as sole executor and sole beneficiary of their estate. They understood that the surviving spouse would need to make a new Will after the first death. Accordingly, after Margaret died on 20 January 2019, Alan made an appointment to put a new Will in place. Unfortunately, he died from a heart attack before he was able to execute the new Will.
As Margaret had already passed away, the gift to her under Alan’s Will failed and his estate passed to his next of kin (his siblings) under s.46 of the Administration of Estates Act 1925.
Margaret’s siblings (the Claimants) claimed that Alan and Margaret made gifts to them in January 2019 in contemplation of their death, and relied heavily upon a checklist from MacMillan Cancer Support that Margaret supposedly completed in the presence of the Claimants on 2 January 2019. Within this checklist, Margaret had indicated that Alan’s brother should receive a butcher’s shop owned by the couple and that Margaret’s siblings should receive ‘the equivalent’. The Claimants further claimed that Alan gifted a house to Margaret’s sister in February 2019. They argued that both of these gifts constituted valid deathbed gifts.
In his judgement, HHJ Jarman QC observed that he sympathised with the Claimants and that if the law provided a way to “put things right” then the court should uphold this. However, he stressed the fact that an alleged deathbed gift should not be used by the court to validate an ineffective Will.
The Judgement
HHJ Jarman QC held that neither of the alleged gifts met the legal requirements of a deathbed gift.
While the Claimants successfully argued that Margaret was contemplating her death from cancer at the time of the alleged gifts in January 2019, the court held that there was no intention for these gifts to take place on her death. Rather, the checklist was interpreted as an expression of Margaret’s wishes for what Alan should incorporate in a new Will after Margaret’s death. Further to this, the subject matter of the gift was never specified and no ‘dominion’ was ever provided to the Claimants, meaning the test failed on the second and third limbs.
Concerning the alleged gift of the house in February 2019 by Alan to Margaret’s sister, it was held that there was no justification to conclude that Alan was contemplating his death for a specific reason. In fact, witness evidence suggested that he was looking forward to a golf trip, had recently purchased a new car and was contemplating moving house. As such, it was held that the first requirement for a deathbed gift had not been made out and the second and third limbs were not even considered.
Conclusion
While deathbed gifts remain a valid mechanism by which a donor can make gifts outside of their Will or the intestacy rules, the case of Davey v Bailey highlights the strict interpretation of the principle taken by the courts, as well as the fact that if these strict requirements are not all met any claim will ultimately fail.
Deathbed gifts are also associated with a long history of disputes, as often those due to inherit the donor’s estate will wish to challenge the validity of the gift that may reduce their inheritance. The facts of the disputes are also often difficult to establish, as the only witnesses to the gift are usually the deceased donor and the recipient, who of course cannot always be considered a credible witness due to their personal interest in the matter.
As such, deathbed gifts can often be more trouble than they are worth, and are no substitute for a well drafted Will and effective estate planning. JMW’s Wills, trust and estate planning team are experts in helping people to set up their Wills and make plans for their loved ones after death. Should you require any more information on Wills, or to speak to a solicitor about creating a Will, please do not hesitate to contact a member of our team.
Andrew Gilligan is a Solicitor located in Manchester in our Business Crime & Regulation department.
