Buried deep in the probate text books, but rarely seen in practice is the concept of Donatio Mortis Causa (DMC) – death bed gifts. In order for these to be valid they must be:

1. made in contemplation of death, although this does not have to be imminent.

2. conditional on death.

3. delivered to the donee or placed under their control.

4. capable of being a DMC.

If these criteria are satisfied the gift passes on death directly to the beneficiary donee and does not vest in the donor’s Personal Representatives. The High Court has recently determined a donatio mortis causa claim in Vallee v Birchwood . It upheld the determination that a DMC of a house made four months prior to the donor’s death was valid, even though the Donor had continued to live in the house during that period. It was not until 1991 that it was thought possible to give land by way of DMC, when it was then held that the Personal Representatives could hold this on Constructive trusts.

The daughter (who had been adopted) came over from France to see her father. He was in poor health at the time. When she explained that she was planning to visit him again at Christmas, he said that he did not expect to live very much longer and might not be alive by then. He indicated that he wanted her to have the house when he died and he gave her the deeds to the house and the key. He died four months later intestate. As the donee daughter had been adopted, she was not entitled under the Intestacy Rules; she therefore contended that the house passed to her by way of DMC . The Treasury Solicitors initially rejected her claim and advertised for claimants. Letters of Administration were subsequently taken out by a genealogist as attorney for the deceased’s brother, who had been traced, to the Ukraine. He also rejected her claim. The daughter therefore made an application for a declaration that the house passed to her by DMC, which was subsequently upheld by the High Court. There was a separate and independent appeal against the Judge’s order that the Administrator should pay the daughter’s costs. The Judge had stated that the Administrator could have taken legal advice and if he had, should have appreciated that he was at least at risk of being ordered to pay the costs on the usual basis that costs follow the event. He had also taken the view that the Administrator had put himself in the invidious position in the hope of financial gain and should incur the consequences of having done so. The appeal against the order for costs was dismissed. As the estate comprised very little apart from the house, which passed by DMC, this left the Administrator having to fund the bulk of the costs personally.

Whilst donatio mortis causa claims can be effective, if the opportunity allows, rather than relying on this, the position should be regularised by conveying or transferring the assets to the donee or including a bequest within a will or codicil. Very careful consideration needs to be given as to how the costs of any application in Court are to be funded, particularly as here, where the funds are limited.

For further information please speak to Richard Monkcom, Head of Druces LLP’s Private Client Team or Louise Harman, Senior Associate.

This note does not constitute legal advice. It is general guidance as to the law only and is based on the law as it is on 16 September 2013.

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