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  • Writer's pictureMiGem

“Deathbed Gifts” – Can we rely on them?

The recent case of Davey v Bailey [2021]1 has highlighted the risks of relying on deathbed gifts instead of making sure that a will is up to date and accurately reflects the wishes of the donor. In this case a married couple who were wealthy but had no children, had made simple mirror wills leaving everything to each other with no provision for what should happen thereafter. Shortly before their deaths, they made three substantial gifts to the wife’s family, but unfortunately it has been held that these gifts did not meet the tests for deathbed gifts and hence, as the husband died second, the entirety of their combined estates passed to the husband’s family and the wife’s family received nothing. For deathbed gifts to be valid, they must satisfy a three-stage test:

  1. Firstly, the gift must be made by a donor in contemplation of death. Whilst they don’t need to be on their deathbed, this is a subjective test and death should be in their contemplation for the near future for a specific reason;

  2. Secondly, the gift must take effect only if and when the death occurs, and must be revocable until that time; and

  3. Thirdly, the donor must deliver ‘dominion’, or control and possession of the gift to the done

In this case, the court considered 3 ‘deathbed gifts’ purportedly made by Mr & Mrs Bailey. All 3 giftswere made after Mrs Bailey had been diagnosed with terminal cancer, during which time the couplecompleted a Macmillan Cancer Support checklist form which set out their wishes. They intended fortheir nephew on Mrs Bailey’s side to receive Mr Bailey’s butchers’ shop, for the rest of Mrs Bailey’sfamily to receive an equivalent share of her estate, and then for any remaining estate to be dividedequally between the two families. Mrs Bailey died shortly thereafter, and whilst sorting through herpaperwork with her niece, Mr Bailey gave the niece the deeds to their marital home and told herthat Mrs Bailey had wanted her to have the house and so did he. He died of a heart attack a coupleof months later. The 3 ‘gifts’ in question were therefore the gift of the equivalent value of thebutchers shop by Mrs Bailey, the gift of 50% of the combined estate, and the gift of the maritalhome by Mr Bailey. With regard to the first gift, it was accepted that this had been made by Mrs Bailey in contemplationof her death in the near future from cancer, so the first element of the test was made out. However, it was not clear that the gift was to take effect ‘if and when’ Mrs Bailey died and the Macmillan form did not meet the ‘dominion’ test so neither of the other elements of the test were met. The second gift was to take effect only on Mr Bailey’s death, and so could be understood as a joint gift by the couple or a gift by Mr Bailey alone, however, it could not be shown that, prior to his wife’s death, Mr Bailey was contemplating his own impending death for a specific reason. In reality, the couple’s intention was to record wishes on the Macmillan form that Mr Bailey would in due course incorporate into a fresh Will.

As to the third gift, again there was a dispute over whether Mr Bailey was contemplating his own impending death for a specific reason when he gave the deeds to his niece. The evidence from Mrs Bailey’s family was that Mr Bailey had been suffering severe chest pains, and that after his wife’sdeath he seemed to have given up the will to live, however on the other hand, he had just bought a new car and had held meetings with his financial adviser to make future plans, so the court concluded that the first element of the test was not made out. Thus, all three gifts failed.

This case confirms that the courts will follow this test stringently and although the judge expressed sympathy to the wife’s family as they received nothing contrary, it seems, to the wishes of the deceased couple, it is a stark reminder to those involved in estate planning to make sure that a new will or codicil is prepared to make sure the donor’s wishes are accurately reflected.

Source - Libby Holding - Legal Services Director - APS Legal & Associates 1 Davey and another v Bailey and others [2021] EWHC 445 (Ch)

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