What is Donatio Mortis Causa?

Donatio Mortis Causa (DMC), commonly known as a "deathbed gift," is a gift made by a person in contemplation of their imminent death. It shares some characteristics with a legacy in a Will because it is conditional on the death of the gift-giver (also known as the donor) and can be revoked by the gift-giver any time before death.

In NSW, the concept of DMC is recognized under common law. However, due to its informal nature, such gifts are subject to strict scrutiny by the Court and are often a source of legal disputes.

Legal requirements of DMC

A leading authority on the issue of DMC is the English case of Sen v Headley [1991] C 425. In that case, the donor, diagnosed with terminal cancer, told the gift receiver (known as the donee) that he would give his house to the donee. The donor also told the donee that the deed to the house was kept in a steel lockbox to which the donee had the keys. The donor soon passed away, and the donee brought an action against the donor’s estate, claiming that she was entitled to the house as the donor’s acts amount to DMC.

The Court set out three elements of a valid deathbed gift (DMC) as follows:

1. The gift is made in contemplation of the donor’s death and occurring within a reasonable time.
2. The gift is conditional on the donor’s death and is revocable right up until the donor’s death.
3. There must be an actual delivery of the gift or a delivery of the essential indicia of title of the gift to the donee.

The third element is the one most contested in Court, as it requires evidence of the donor’s intention to gift the donee. Case law suggests that for a gift of tangible personal property, such as a diamond ring, an actual delivery of the specific gift is required. For intangible property, such as money in a bank account, delivery of essential indicia of title is required.

A question regarding the third element was raised in Tawil v Public Trustee of New South Wales [1998] NSWSC 520. In this case, the deceased handed the claimant his bank statements in a taxi on the way to the hospital. The Court found that bank statements were not sufficient indicia of the title to the money in the bank as they do not provide access to the funds in the bank accounts. A valid DMC in this case would require a delivery of bank passbooks or similar items.

In relation to gifts of real property, two cases are frequently cited. In Sen v Headley, the Court held that the deed of the real property is an essential indicium of title, and the donor’s intention to transfer ownership of the property is shown by the handover of the deed. Therefore, the elements of a valid DMC were met. In contrast, in Hobbes v NSW Trustee & Guardian [2014] NSWSC 570, the NSW Supreme Court held that the delivery of the keys and a council notice relating to the property had nothing to do with transferring the legal title to the land. The deceased’s act was symbolic, which is not sufficient delivery required for a valid DMC.

Although irrelevant to the decisions in the case, Justice White in Hobbes v NSW Trustee & Guardian noted that courts in the UK and Australia have different positions regarding DMC of real property. Where the certificate of title of land is handed over without a duly executed transfer, English case law suggests that a valid DMC may be found, but Australian courts are yet to reach the same decision. In an earlier case of Watts v Public Trustee (1949) 50 SR (NSW) 130, Chief Justice Roper held that the doctrine of DMC applied only to personal property and not to land, and his decision was followed by Justice Needham in Bayliss v Public Trustee (1988) 12 NSWLR 540. While case law is evolving over time, Justice White indicated that until a superior court makes a different finding, Australian case law to date suggests that DMC does not apply to real property in Australia.

DMC or Will

• DMC does not have the protections afforded by the formality of a valid Will, such as the acknowledgment of witnesses. Therefore, it would be harder to prove the absence of undue influence or unconscionable dealings regarding the gift, or the legal capacity of the gift-giver.
• DMC requires the delivery of the gift or its essential indicia of title to the donee, which is not always practical. The unsettled position in Australia regarding DMC of land has also made DMC a less favourable option to dispose of your estate.
• A property given as DMC would be transferred to the donee before the donor’s Will takes effect. For example, if a person made a Will leaving her jewellery to child A, and later made a deathbed gift of the jewellery to child B, child B will get the jewellery and the relevant gift in the Will fails. Therefore, DMC can have a significant impact on the estate of the donor. To avoid conflicts created by inconsistent wishes, it is prudent to give effect to all your wishes through a duly executed Will.

Determining whether a gift in contemplation of death is valid is complicated and depends on the case. Our highly experienced Wills and Estate lawyers are happy to assist you in this regard. Contact us for a free thirty-minute consultation in our offices in Lindfield or over the phone.

Any information on this website is general in nature and should not be taken as personal legal advice. We recommend that you speak to a lawyer about your personal circumstances.

Photo by bczsjt 

Any information on this website is general in nature and should not be taken as personal legal advice. We recommend that you speak to a lawyer about your personal circumstances.