30 July 2020
Deathbed gift claims may become more frequent due to Covid-19
Most of us are all too familiar with scenes from film or television where a dying person (the Donor), lays in bed, shares their final few minutes speaking to their loved ones (the Donee), and then offers a valuable gift before taking their last breath. While this may be well intentioned, problems can arise when an asset has already been left to someone else under their Will or forms part of the residuary estate, and the Donee is keen to obtain the gift for themselves. What happens then? The law of deathbed gifts (or Donatio Mortis Causa (DMC)) could come into play.
What is a deathbed gift?
Deathbed gifts are sometimes seen as a solution when no Will has been made, or a prepared Will no longer reflects the Donor’s wishes. Indeed, some surveys suggest that up to 50% of the population do not have a Will. Donors might make a last-ditch attempt to ensure that their estate is distributed as they would like it to be. They might promise their nearest and dearest visiting them on their deathbed that they will inherit certain assets on their death.
Four primary requirements of a deathbed gift
Valid deathbed gifts (DMCs) occur when a gift does not comply with the formal legal requirements regarding the transfer of property (or where it is not possible to infer the creation of a trust by the Donor) but otherwise meets the four primary requirements of a deathbed gift, namely:
- The gift must be in contemplation of death, which needs to be 'within the near future' from a known cause;
- The gift must be made to take effect upon the death of the Donor;
- The gift most be capable of being given away; and
- The Donor must deliver either the gift or the means of coming into possession of the gift to the Donee or their agent.
Given the way gifts like this occur there is often very limited evidence of the gift being made. Typically, there are only two witnesses: the deceased and the recipient. Stringent evidence is required to establish whether a valid deathbed gift has occurred. Most of the time, the evidence takes the form of a witness statement by someone who was present at the time the gift was made. As the application of the DMC doctrine can be open to abuse, claims are heavily scrutinised by the courts
With the advent of the current pandemic, a court’s deliberations regarding the first limb of the above criteria might be even more difficult. For instance, is it necessary for death to be anticipated within hours, days or weeks? It is often far from clear whether the above criteria has been met, with the courts constantly reassessing what it means to be ‘in contemplation of impending death.’
These types of claims are rare and even fewer succeed. Nonetheless deathbed gifts do occur, and maybe you or someone close to you may have been the recipient of such a gift (perhaps without even realising it was a valid gift). If you think a DMC has occurred, or is contemplated, then obtaining a written, audio or video recording of the Donor’s intentions is advisable. Made all the more easier with the ability to record audio or video calls with providers such as Skype and Zoom. However, by far the safest option would be to get a Will, and B P Collins provides a remote Will drafting service https://www.bpcollins.co.uk/knowledge-hub/article/remote-will-service.
Although DMCs are not the best way of making a gift, if a Will cannot be changed in time, they remain a potential way (though a very risky way) of ensuring a gift which would otherwise fail (because it was not formally transferred) is still passed to the rightful beneficiary. This could be helpful if the Donor is or was stuck in hospital and had an old Will which was no longer appropriate at the time of their imminent death.
DCM claims increase as a result of Covid-19
Along with the legal and evidential challenges facing potential claimants, we are likely to see an increase in DMC claims as a result of Covid-19. Further, depending on the particular facts of a case, we are also likely to see an increase in disappointed beneficiary claims under the Inheritance (Provision for Family and Dependants) Act 1975, as a potential alternative to a DMC claim. Unless settlement can be reached at an early stage, resolving a claim at trial is a costly and time-consuming affair. Parties also need to give careful thought as to how the costs of an application to court is to be financed, especially when funds are limited. Whilst DMC claims can sometimes be effective, it is by far better to prepare a Will or a lifetime gift for the above reasons.
If you find yourself in a position where a gift is given in a scenario similar to those described above, then you should seek legal advice quickly to ensure that your potential entitlements are not overlooked.