DEATHBED GIFTS: CAN A GIFT OF PROPERTY AND ASSETS MADE OUTSIDE A WILL BE VALID?
It is commonly known that if someone wishes to leave their property, money or assets to a person or organisation (e.g. a charity) after their death the most effective way of doing so is by making a Will. However, failing to make a valid Will may cause considerable problems and those you wish may not inherit. Family members and others may be forced, if the possibility is open to them, to make a claim to the court to share in the estate.
However, whether or not a valid Will has been made is not the issue here. What if, prior to death, the deceased supposed to make a gift of a house or shares – is such a gift valid?
The case of King v Dubrey decided in 2015 has now clarified the law in England and Wales in relation to the doctrine of donatio mortis causa, more commonly known by lawyers as “gifts made in contemplation of death” (a “DMC”). This is a legal doctrine that goes all the way back to Roman law. For the history buffs amongst us the doctrine was codified under Justinian I and became a part of our common law during the 18th and 19th Centuries.
The facts in the case set out a not uncommon scenario. The deceased made a Will leaving her estate to a number of charities many of whom she had supported during her lifetime. A nephew claimed some months after her death that the deceased had given him the title deeds for her house and had left a signed note confirming that the house was to be his on her death. The deceased was in failing health but there was no evidence that she had determined she was going to die. The question for the Judge was whether the passing of the title deeds and the other evidence entitled the nephew to the house. I would add that the nephew also pursued a claim under the Inheritance (Provision for Family and Dependants) Act 1975 seeking financial provision from the estate.
Having heard the evidence the trial judge found in favour of the nephew and determined that that there had been a valid DMC. Further, the Judge considered that the nephew had a good claim under the Act and hypothetically assessed this at £75,000.
Charities named in the Will appealed that decision. The DMC gift issue and the value of the £75,000 award under the Act went before the Court of Appeal. It found against the nephew in relation to the property but permitted him to retain the award of £75,000.
In reaching its judgment the court spent some time reviewing previous authorities and found that the nephew had failed to establish the necessary requirements for a valid DMC gift.
What guidance can be determined from the court’s decision in this case?
- That claims to be entitled to property, money and assets under the DMC doctrine remain possible. However, anyone claiming such a gift will have to produce good firm evidence before a court will find in their favour.
- The deceased must have contemplated imminent death and quite probably from a known cause. The doctrine is unlikely to assist someone seeking to establish a claim where the deceased might simply have felt they did not have long to live.
- Any evidence that the deceased was contemplating making a Will disposing of the gift(s) claimed is unlikely to assist a claimant. This would likely be viewed by the court as reflecting a belief that the property would form part of the estate to be disposed of by a Will.
- The house in this case was not recorded at the Land Registry. Views amongst lawyers and legal commentators differ as to whether a purported DMC gift of a property can operate where the property is registered at the Land Registry. This remains one of the undetermined questions in relation to the operation of the DMC doctrine.
Whilst the decision in King v Dubrey brings a degree of clarity to this area questions remain. The outcome of each case will largely be determined by the facts and the evidence. One interesting aspect of this case is that the Court of Appeal judges felt that the DMC doctrine should be restricted as it is open to abuse. For the moment the doctrine remains and I look forward with interest to reading future case reports.
If you have any questions or concerns in regards to contesting a will or the nature of DMC gifts then please call our team of contentious trusts and probate specialists on 01752 203500.