A deathbed gift is a transfer of property and assets made by a person at the time of death that bypasses the provisions of a Will or the laws of intestacy. The principle has been around since Roman times, and the recent verdict in Davey v. Bailey [2021] shows how the principle has been applied by courts in more recent times.
What makes a valid deathbed gift?
In the case of King v. The Chiltern Dog Rescue and Redwings Horse Sanctuary [2015] EWCA Civ 581, Jackson LJ summarised the three conditions necessary to create a legitimate dying gift. To qualify as a deathbed gift, the donor must:
Consider their impending death; make a gift that will only be effective if and when their death occurs; and give the recipient ‘dominion’ over the subject matter of the gift.
The ‘impending death’ does not have to be unavoidable, but there must be good reason for the donor to expect death from an identified cause in the near future.
The donor should have the right to revoke the gift until the anticipated death occurs, and the gift will fail if the death does not occur in the manner specified.
According to Jackson LJ, the term “dominion” refers to either physical possession of the subject matter of the gift, some means of accessing it, or documents proving possession of the subject matter.
In addition to the above three stage tests, the donor must have the necessary mental capacity to make the deathbed gift, which is assessed based on the subject matter of the gift. When the gift is of low value, the required mental capacity is low; however, as the gift becomes more valuable and significant, the level of mental capacity required will rise to that required to make a valid Will.
Davey v. Bailey, a recent case [2021]
The Details
Alan and Margaret Bailey both died in 2019, and neither of them had any children. On May 28, 2009, they each wrote a will in which they named the other spouse as the only executor and beneficiary of their estate. They knew that after the first death, the person left behind would have to make a new Will. So, after Margaret died on January 20, 2019, Alan scheduled a time to make a new Will. He had a heart attack and died before he could put the new Will into action.
Margaret had already died, so Alan’s gift to her in his Will didn’t work. Under section 46 of the Administration of Estates Act of 1925, his estate went to his next of kin, who were his siblings.
The Claimants, Margaret’s siblings, said that Alan and Margaret gave them gifts in January 2019 because they thought they would die soon. They relied heavily on a MacMillan Cancer Support checklist that Margaret supposedly filled out in front of the Claimants on January 2, 2019. Margaret had written on this list that Alan’s brother should get the couple’s butcher shop and that Margaret’s siblings should get “the equivalent.” The Claimants also said that Alan gave Margaret’s sister a house as a gift in February 2019. They said that both of these gifts were good ones to give to someone on their deathbed.
In his decision, HHJ Jarman QC said that he felt sorry for the Claimants and that the court should support the law if it gave a way to “make things right.” But he stressed that an alleged gift made on the person’s deathbed shouldn’t be used by the court to validate an invalid Will.
The Judgement
HHJ Jarman QC ruled that neither of the alleged gifts satisfied the legal definition 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 determined that there was no intent for these gifts to occur on her death. Rather, the checklist was interpreted as Margaret’s wishes for what Alan should include in a new Will following Margaret’s death. Furthermore, the gift’s subject matter was never specified, and no ‘dominion’ was ever provided to the Claimants, indicating that the test failed on the second and third limbs.
Concerning Alan’s alleged gift of the house to Margaret’s sister in February 2019, it was determined that there was no reason to conclude that Alan was planning his death for a specific reason. In fact, witness testimony indicated that he was looking forward to a golf trip, had recently purchased a new car, and was thinking about moving. As a result, it was determined that the first requirement for a deathbed gift had not been met, and that the second and third limbs had not even been considered.
Conclusion
While deathbed gifts continue to be a valid mechanism for a donor to make gifts outside of their Will or the rules of intestacy, the case of Davey v Bailey highlights the courts’ strict interpretation of the principle, as well as the fact that if these strict requirements are not all met, any claim will ultimately fail.
Deathbed gifts have a long history of controversies, as those entitled to inherit the donor’s estate may wish to challenge the validity of the gift, which may reduce their inheritance. The facts of the disputes are frequently difficult to establish because the only witnesses to the gift are usually the deceased donor and the recipient, who cannot always be considered credible witnesses due to their personal interest in the matter.
As a result, deathbed gifts are frequently more trouble than they are worth, and they are no substitute for a well-drafted Will and proper estate planning.
