- Boston
01205 351114 - Bourne
01778 218001 - Grantham
01476 591550 - Horncastle
01507 522456 - Lincoln
01522 541181 - London
02078 715755 - Newark
01636 673731 - Sleaford
01529 411500 - Spalding
01775 725664 - Stamford
01780 764145
Death Bed Gifts - a 'trick or treat'?
Death bed gifts are a concept that many have heard of, but very few understand the dangers. In this article we will look at the pitfalls and how you can avoid the horrors that will come back to haunt your intended recipient.
What is a death bed gift?
A Death Bed Gift is defined as a gift "made by a person (the donor) in contemplation of impending death", the technical term for this is a Donatio Mortis Causa, 'DMC' for short.
What is the effect of a death bed gift?
Death Bed Gifts are most commonly used where the passing of an individual is imminent and they have not put a provision in place of how they wish to leave their asset.
Unlike an estate bequeathed by Will or passing through intestacy, Death Bed Gifts do not pass to the executors or administrators of your estate to distribute accordingly, these gifts instead pass directly to the intended.
What's the Catch?
There are strict requirements that can cause a Death Bed Gift to fail. This would mean that the intended gift would unfortunately fail on your passing, as there would be no way to rectify the error.
The tricky criteria is as follows:
- The Donor (the one making the gift) must have believed that they were going to die and it must be during this belief, that the gift is made. It would be for the beneficiary of the gift to prove this genuine belief.
- The gift must be made on the basis that the gift is revoked if the Donor later recovers.
- The Donor must part with the gifted item in some way. This could be by physically handing over the gift, or parting with something that controls the gifted item.
- The Donor must be able and capable of gifting the item.
To make a successful DMC, all four of the above criteria must be satisfied and in practical terms, this can be hard to accomplish.
For example, in relation to criteria 3, if the Donor was in ill health and bed bound in a care home, it could be very difficult for the donor to make the necessary arrangements for the gift (or control of it), to be physically given to the beneficiary. This would also rely on the donor having capacity at the time.
What's the solution?
A more certain and stress free method of gifting away an asset is to have a Will drafted.
A Will allows you to have the assurance that your assets will be left in the exact way that you want and your intentions complied with.
Assets left in a Will can be anything that forms part of your estate and which you own in your sole name.
When drafting a Will, you have the ability to gift your assets in a binding document, so that you know that your wishes will be upheld (providing you have capacity). By instructing a professional to assist in the drafting of your Will, you would have the ability to make decisions about gifting in a calm environment, so that your decision can be carefully considered and the implication of any gift explained for you.
(If you would like an insight into what an experience with a Will writing professional would be like, please see my colleague Claire Clarke's blog post entitled "How good is your Will writing Professional?")
The Conclusion:
The lengthy and strict requirements of a Death Bed Gift does mean that the outcome of whether a successful DMC has been made is uncertain. If a DMC falls short of any of the requirements, it is unfortunately too late to rectify and the gift would fail. Once a gift fails, if and there is no valid Will in place, the item would pass via the intestacy rules.
DMC's can be useful in urgent situations where no Will has been created, however, if you are wanting to make a gift on your death, it is always best to have this drafted into a Will by a professional, to ensure your items successfully goes to whomever you intended.
Providing you have capacity, a Will can be made or updated anytime, so don't leave it until the last minute where possible.
For more information on the making of a Will, please feel free to contact Chattertons, who will make the process as easy as possible.
CONTACT US
If you need legal advice for any Wills, Trusts & Probate matter please contact our specialist Wills, Trusts & Probate team.