Gifts in anticipation of death
Gifts of property before death in anticipation of impending death are known as Donatio Mortis Causa.
If these gifts are validly made they do not go into the estate on death and the executor/personal representative does not need to deal with them.
It is not unusual for gifts to be made with the best of intentions that are not effective. Executors/Personal Representatives should examine carefully any claim that there has been a lifetime gift and legal advice should be taken.
For the gift to be effective it must satisfy certain criteria:-
- The gift must be made in anticipation of death in the near future. It does not matter whether death was actually imminent only that there was a genuine belief of impending death. A gift could potentially be made several months before death.
- It must be a condition of the gift that the donor dies. If, for example, a gift is made while seriously ill and the donor recovers, then the gift will fail.
- The deceased must take some positive step to give the asset away. For example, handing a car key to the intended recipient.
The law that governs Gifts in anticipation of death is very old and an exception to the usual rule that land can only be transferred in writing. If land is gifted in this way the executors/personal representatives will hold the land on trust for the intended recipient. The longstanding rules requiring land to be transferred in writing were implemented to minimise disputes over land ownership. For this reason the Courts will want to interrogate any claim to a lifetime gift of land very carefully.
If a lifetime gift is made in anticipation of death that gift is not necessarily revoked if the donor then makes a will that deals with the same asset.