A case which has been widely reported in the media in recent weeks has highlighted possibility of making deathbed gifts designed to take effect only after death which would override any will or distribution under intestacy. Kate Farkins from RFB's Private Client department discusses.
Mick Ivory passed away in November 2018. He left a modest estate primarily made up of the proceeds from the sale of his family home, a collection of rare Osmond family memorabilia and his much-loved dog Lady.
Mick had not created a Will and his wife had predeceased him. As he had no children of his own, Mick's estate would have passed to his three surviving siblings Peter, Alan and John and his nephew Michael under the intestacy rules.
Peter dealt with the administration of the estate and claimed that there was nothing to distribute under intestacy and that he had given away £400,000 of Mick's estate to the poor and needy.
Peter alleges that whilst Mick was dying, he told Peter to keep his fortune and if he couldn't keep it to give it away to ensure that the rest of his family didn't "get their hands on his hard-earned money". Once Mick had passed, Peter seemingly set about carrying out these wishes and gave the Osmond Family memorabilia to the Osmond fan club and later withdrew £150,000 in cash which he said he had distributed between numerous people in need and charities.
Peter's defence team are relying on the concept of 'donatio mortis causa', arguing that Mick's requests amounted to a valid death bed gift due to take effect on death and that Peter was simply carrying out Mick's wishes. Counsel for Peter's brother's and nephew argue that Peter has provided no evidence to support this dying wish other than a letter written by Peter after Mick's death.
The case has been adjourned to enable Peter to provide a full account of the money he had given away. However, it raises an interesting issue as to whether Peter might have had the authority to retain or give away all the assets in the estate.
Case law dating back 200 years has established that it is possible to make a valid deathbed gift in certain circumstances:
- The gift must be made in contemplation of imminent death.
- There must be actual or symbolic delivery of the gift. This could include giving keys to a car or the deeds to a house.
- The gift must be conditional on the death so that it does not take effect in the event of the donor's recovery.
- The gift must constitute something which the donor is capable of giving away. This would preclude him from gifting a cheque which he has received from someone else as the donor's bank would not accept further payments into his account after being notified of his death.
It is also possible that even if no actual or symbolic delivery was made but that the gift was made to a person who becomes the donor's personal representative, it could still be a valid donatio mortis causa by being vested in the recipient as the personal representative.
Even if the will contains a gift of a specific asset, this can be the subject of a valid deathbed gift and the gift in the will would then fail.
It is a risky strategy to rely on leaving assets to loved ones on your deathbed. Should it be contested and the matter end up in court, as in the case of Mick Ivory, it may be difficult to supply the necessary evidence showing that the requirements of a valid donatio mortis causa are met. If a person does need to make their Will or change the distribution of their assets at a time when they are gravely ill, making a deathbed Will is a far better option. Solicitors will often be willing to make hospital visits at short notice and write out a Will where necessary to ensure that the wishes of a dying person will take effect.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.