When making a Will a testator should also consider whether they wish to make any gifts during their lifetime, this may be advised in circumstances where the making of a lifetime gift may reduce the IHT payable by the testator’s estate on their death. A testator may also make a lifetime gift in contemplation of death, particularly when they believe there is insufficient time to prepare a Will.
A gift made in contemplation of death is often referred to by its Latin term, “Donatio Mortis Causa” during the course of legal proceedings. Given the potential vulnerability of the donor, for a gift made Donatio Mortis Causa, there are legal requirements to be met in order for the gift to be held valid. Whilst the requirements are complex, they can be boiled down simply to be:
- The gift is made by a donor in which his death is expected to be imminent;
- The gift is conditional on the donor’s death, albeit ownership of the gift can transfer at the time the gift is made;
- The donor intends for the gift to pass to the donee for their absolute benefit;
- The donor must be free to revoke the gift at any time before death;
- The donor must retain sufficient capacity to make the gift; and
- The donor must action the gift by taking steps to transfer benefit of the gift.
Providing the above requirements are met, a gift made pursuant to Donatio Mortis Causa will be valid and will override any gifts made by a donor’s Will. This was seen in the recent case of Rahman v Hassan and others in which the Deceased made a gift in contemplation of his death which went against the terms of his earlier Will. Here, the Deceased and his pre-deceased wife made Wills, leaving their estate to each other and then the Defendants. The Claimant was a distant relative of the Deceased and the only relative living in England with the Deceased, with the Defendants living outside of England. The Claimant also provided care for the Deceased and he and his wife resided with him.
Prior to the Deceased’s death, the Deceased instructed a Solicitor to prepare a new Will. The Deceased provided instructions that the Claimant would inherit his estate but before signing, the Solicitor sought confirmation of capacity from the Deceased’s GP. There was some delay in obtaining confirmation from the GP and during this wait the Deceased sought to deal with his affairs. The Deceased therefore took it upon himself to gift his estate to the Claimant and explained this gift would overrule the Will he was about to make. The Deceased died a few days later before his Will could be executed.
The Court was largely reliant on witness evidence when considering the validity of the gifts. This included evidence from the Solicitor instructed to draft the Will who confirmed the Deceased intended for his estate to pass to the Claimant. The Court noted that when making the gift the Deceased provided the Claimant with the necessary access details to gifts, such as the pin codes for his banking accounts and the deeds for the properties. Given the circumstances, the Court held the gifts by way of Donatio Mortis Causa were valid, as on the balance of probabilities it was declared the Deceased wished to make the gifts in contemplation of his death and had the capacity to do so.
Comment
This case demonstrates the application of Donatio Mortis Causa and the importance of each case based on its specific facts.
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