What is a deathbed gift?
A deathbed gift, otherwise known as donatio mortis causa is a gift made to another person whilst the gift giver is alive, but is essentially “on their deathbed”. The gift is made in contemplation of death.
True deathbed gifts avoid the protections of the Wills Act 1970 (WA) and the Property Law Act 1969 (WA) in that they allow a person to transfer real or personal property without the usual formalities. An example of a deathbed gift is outlined in the matter of Sen v Headley [1991] Ch 425. In this case, the donor gifted her house by saying words to the effect of, “The house is yours, Margaret. You have the keys. They are in your bag. The deeds are in the steel box.”
Surely it can’t be that easy?
Given the nature of a deathbed gift, they are unsurprisingly open to abuse. The court recognises this, and has made it very clear that, when a deathbed gift is claimed, it will very carefully scrutinise the facts. The following factors assist this scrutiny and are all required to be met in order for the gift to be valid:
The gift must be made in contemplation of ‘impending’ death. However, death need not be an inevitable outcome. For example, in Re Craven’s Estate [1937] 1 Ch 423, a gift made in advance of an operation was held to be a valid deathbed gift.
The gift, or a means of accessing it, must be delivered to the receiver. For example, in the case of Sen v Headley, the keys to the house were placed in the receiver’s bag.
The gift must be given on the condition that it can be revoked at any point until the death of the gift giver.
Generally, the second factor has proven the most contentious requirement, as it is often the case that it is not met. His Honour Justice Farwell commented on the importance of this requirement in the matter of Re Craven’s Estate [1937] 1 Ch 423, as follows:
Take for instance the case of a box. The donor says: ‘This box contains certain valuables. The contents of the box are to be for you, the donee, in the event of my death from the operation which I am going to undergo in a few days, but I propose to retain the box and the key of the box.’ If that were the position, it would be possible for the donor at any time to take out of the box whatever was in it and replace what was in it with other valuables, and it is that that should not be possible, that one of the requirements of a good donatio is that the donor should have parted with dominion, so that whatever the subject matter of the donatio was intended to be should remain that subject matter in the event of the death of the donor. In the case of a box, it is not necessary to hand over the box if the key is handed over, because it is assumed that if the key which unlocks the box is in the possession of the donee, the donor cannot have access to the contents of the box so as to deal with them in any way. I know of no decided case in which the question has arisen whether the handing over of a box and one key, it being proved that there was another key retained by the donor, would be sufficient, but, in the absence of authority, in my judgment, it would probably be held not to be a sufficient parting with dominion over the box, because the donor would have retained dominion over it and its contents by retaining the power to open the box, although it might be in the possession of the donee.
Can you challenge a deathbed gift?
Deathbed gifts can significantly reduce the size of a final estate and can have a huge impact on what a beneficiary under a Will might receive. In such instances, the beneficiary may wish to challenge the validity of the deathbed gift on the basis that one or more of the above three requirements cannot be established.
A deathbed gift could also be challenged on the basis of the intention of the gift-giver. For example, did the donor intend to give a deathbed gift, or were they actually trying to make a Will? While this distinction might seem superficial on the surface, the court must be satisfied of the intention of the donor because if their intention was to create a Will, the formalities of the Wills Act would apply.
Although there is a clear line of case law upholding the principle of donation mortis causa, the law in this regard is particularly complicated. Establishing whether a deathbed gift is valid can be a very complex process as each case turns on its own particular facts. At Carter Dickens Lawyers, our lawyers have significant experience in Wills and Estates matters, and would happily assist in this regard.
If you would require assistance in determining whether a claim to a deathbed wish is valid, please contact our office on (08) 9408 5212.
Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.