Latin and Death Bed Gifts are alive and well!

The Courts will always be vigilant in scrutinising evidence advanced to support of a DMC. Whilst there is clearly scope for the unscrupulous to cheat and lie their way to a gift, it must be pointed out that the DMC can be established solely upon the evidence of the recipient if their evidence is deemed trustworthy.

Finally, when taking advice upon defending or challenging a DMC, careful consideration of the Donors mental capacity and the question of undue influence must be undertaken. Capacity has an effective “sliding scale”. A modest gift, requires only a modest degree of understanding by the Donor. If however the gift is substantial, making any Will effectively worthless, the level of capacity will be the same that would be required to make a will as laid down in the leading case of Banks v Goodfellow [1870]. More problematic is the burden of proof required if an allegation of undue influence is raised. Straight forward lifetime gifts can see the Courts raising a presumption of undue influence depending upon the relationship between Donor and recipient (requiring the recipient to prove that they had not unduly influenced the Donor). However, in the case of Wills, the burden is reversed. A disappointed beneficiary must prove that there was undue influence – the recipient has to prove nothing. The “million dollar“ question however is whether the DMC is counted as a lifetime transaction (i.e lifetime gift) or a testamentary act (i.e. effectively a Will gift)? At present there is no decided case law!

Conclusion

Whilst this doctrine continues to present on a regular basis to Lawyers, it cannot be emphasised that for the protection of both the recipient of the intended gift and for the general financial wellbeing of the remainder of the Estate, the uncertainty of these gifts could be removed completely by the writing and or updating of an individual’s Will. In this way, it is clear that the gift is to be made, the extent and context of the gift can be established and the effect of the gift upon the overall financial position of he Donor can be accurately assessed. To proceed in any other way, will only cause unnecessary heartache, uncertainty and costs!