Covid-19 has driven many people to think carefully about how they want their estate to pass following death. The best means of ensuring that wishes are followed is to make a valid will. However, circumstances don’t always allow for the proper formalities to be completed in time. In particular, with Covid-19 lockdowns, access to professional advisers and arranging for documents to be formally signed has been very difficult.
The law allows for the legal formalities of giving via a will to be dispensed with where gifts are made in anticipation of death. These are often described as ‘deathbed’ gifts (or by the legal term donationes mortis causa).
What are ‘deathbed’ gifts?
Deathbed gifts are a means of making gifts that will become effective on death but without complying with the strict requirements of the law. The most common circumstance will be individuals that are seriously or terminally ill, those about to undergo major or risky surgery or those with other concerns about their imminent death.
The requirements for deathbed gifts are:
- The gift must be made in contemplation of death. The donor must anticipate that they do not have long to live due to an identifiable cause, though there is no requirement for the donor to be in hospital or for death to be inevitable.
- The gift must be made with the intention that the property will pass on the donor's death, as opposed to during their lifetime.
- The gift must be given or 'delivered' physically. Either the gift itself or something representing the gift must be delivered by the donor or by their authorised 'agent'.
- The gift must be made in contemplation of death. The donor must anticipate that they do not have long to live due to an identifiable cause, though there is no requirement for the donor to be in hospital or for death to be inevitable.
- The gift must be made with the intention that the property will pass on the donor's death, as opposed to during their lifetime.
- The gift must be given or 'delivered' physically. Either the gift itself or something representing the gift must be delivered by the donor or by their authorised 'agent'.
Davey & Anor v Bailey & Ors
The recent case of Davey & Anor v Bailey & Ors [2021] EWHC 445 (Ch) has emphasised that the requirements will be strictly and narrowly applied, even where there may be sympathy for the party aggrieved by the strict approach.
Alan and Margaret Bailey, a happily married couple, both died within months of each other at the age of 71 in 2019. They had no children, but their respective families were close and mutually supportive. Margaret’s sister Wendy even stayed with the couple to offer help once Margaret was diagnosed with cancer. Wendy also stayed a few days after Margaret’s death to help Alan.
Margaret and Alan both made Wills on 28 May 2009, appointing each other as sole executor and beneficiary. Evidence from their solicitor confirmed that the couple understood and accepted that the survivor of them would have to make a new Will after the first of them died, as Margaret noted on a Macmillan Cancer Support checklist; “Get Alan to write own will”. The Macmillan checklist also stated “Leslie-Butcher’s” and “Eiron + Wendy equivalent/ Rest 50/50” in the ‘Will’ section. Margaret gave the Macmillan checklist to Wendy, having completed it in the presence of Alan and Wendy on 2 January 2019. Wendy confirmed in evidence that these were wishes expressed by Margaret and that Alan had agreed with them.
Following Margaret’s death, Alan went to his solicitor with a view to making a new Will. He was confident in the gift of the family Butcher’s shop to Leslie, his brother, but “was finding it difficult to decide precisely who was to inherit” the remainder of his estate. Before he executed the new Will, however, he died of a heart attack, only four months after Margaret’s death. Margaret’s estate had passed to Alan and, on his death, his estate passed on the law of intestacy to his siblings and, in the case of his sister Ann who had died before him, to his sister’s children.
Margaret’s siblings were therefore due to receive nothing. They sought to enforce the following purported deathbed gifts:
- two gifts of cash; and
- a gift of the matrimonial home.
The gifts of cash were purported to be made by Margaret to her family on the basis of the Macmillan checklist. The court accepted that Margaret was contemplating her death when she completed the Macmillan checklist. However, the court regarded the subject matter of the gifts to be uncertain and the Macmillan checklist merely indicated her wishes for Alan to consider in making his new Will. Also, there had been no physical delivery of any of these items. As such, the gifts failed on the basis of the second and third requirements outlined above.
The gift of the matrimonial home was purported to be made by Alan to Wendy by means of a gift of a metal box file containing the title deeds and office copy entries following registration of the property. Wendy found documents when assisting Alan with paperwork following Margaret’s death. Wendy asked Alan what he wanted done with the box file and Alan apparently said that Margaret wanted Wendy to have the house and that he wanted the same. Alan said Wendy should take the box file. Alan was distressed following the loss of his wife and the family noted he suffered severe chest pains the day following her funeral.
However, both sides accepted there was no medical diagnosis and the court was not satisfied that Alan made a gift in contemplation of his death. Furthermore, Alan’s intentions were unclear. Alan included the property in his assets when considering his new Will and also made comments to his nephew about selling the property. The court considered that the ‘gift’ of the box file amounted to Alan expressing his intention to gift the property in his Will, rather than a successful deathbed gift. As such, this gift failed on the basis of the first requirement.
The case was heard by HHJ Jarman QC who found that all three gifts failed. This was despite having some sympathy with Margaret’s siblings and acknowledging that there was an intention by Alan and Margaret for both sides of the family to benefit substantially. HHJ Jarman QC observed “such sympathy cannot justify the court attempting to fit the facts into strict legal requirements if objectively those requirements are not made out.”
In reaching his conclusions, HHJ Jarman QC heeded the warning given by the Court of Appeal in a 2016 case where it was said that the requirements for a valid deathbed gift must be strictly and restrictively applied.
Deathbed gifts of registered land
Tantalisingly, HHJ Jarman QC left open the question whether it is legally possible to make a deathbed gift of registered land, a question on which there is no reported authority. For unregistered land, delivery of the deeds is sufficient for the third limb of a deathbed gift. As noted by HHJ Jarman QC in Davey v Bailey, it would be unusual for the practice to differ between registered and unregistered land, despite academic commentary to the contrary. It therefore remains possible that in a future case the delivery of the formal paperwork that a registered owner of land may have in their possession may be held to be sufficient to amount to a valid deathbed gift.
Practical considerations
Where a person may be contemplating making use of the deathbed gift rules, it is important to note that:
- The subject matter of the gift being made is capable of taking effect after their death. A problem arises in the case of cheque written out to a friend or relative for them to cash following death; the validity of the cheque, as an instruction to the bank, will terminate on the death of the donor. As such this cannot be the subject of a deathbed gift unless it is cashed before death or at the very least before the bank is aware of the death.
- Should the person wish to consider making the gift as a lifetime gift or, alternatively, in your Will as recovery may invalidate a deathbed gift on the basis of the passage of time; case law shows deathbed gifts are more commonly successful where the gift is shortly followed by the death of the donor.
- A deathbed gift can be revoked at any time before death as the gift does not become complete until death has occurred.
The risks associated with deathbed gifts
Deathbed gifts are a rare creature for good reason. As confirmed by Davey v Bailey, there are strict requirements. This type of gift is often controversial and subject to challenge by disappointed heirs of the deceased. This is especially the case as a Will does not automatically revoke a deathbed gift.
Deathbed gifts are often utilised by particularly vulnerable persons. Vulnerability can open the door to other challenges on the basis of lack of mental capacity, especially where an individual is on medication, or on the basis of undue influence, where it is possible the donor was pressured to make the gift. The nature of these gifts leaves them open to abuse. That is why the court takes a strict approach.
As is clear in Davey v Bailey, the deathbed gift is not meant to be a mechanism by which an ineffective will is validated. In that case, Margaret’s siblings advanced the argument that Margaret’s notes by means of the Macmillan checklist had been all she was capable of writing in light of her weakened state. HHJ Jarman QC said that this was “a classic example of how the principle is not to be used as a device to validate an ineffective Will”.
It is therefore unwise to rely on a deathbed gift in place of a valid Will. The strictness of the court’s approach to deathbed gifts means that a valid written Will remains the best option to ensure that assets pass in the way that is intended. A professionally drawn Will can be prepared quickly should the circumstances require it.
Conclusion
Whilst deathbed gifts have their uses and do offer an alternative option in difficult circumstances, they are subject to strict requirements that are interpreted narrowly. Deathbed gifts remain controversial and it is unlikely the Courts will be willing to relax the requirements anytime soon. However, in view of the difficult circumstances in which many people have found themselves in the midst of Covid-19 lockdowns, it is likely that the courts will be asked to look at more and more such cases in the near future.
