Gifts Mortis Causa

October 28, 2015 Suzana Popovic-Montag Estate & Trust Tags: , , 0 Comments

Gifts mortis causa (or deathbed giving) have a long and rich history that can be traced back well over 2000 years. As gifts mortis causa began to become more prevalent, concerns were raised that this doctrine could be easily used for fraudulent purposes.

As a result, the common law courts have always been reluctant to embrace it. In fact, the judiciary has not hesitated in providing that giving mortis causa should be strictly defined or abolished altogether.

The primary challenge with these types of gifts is that they lack all the protections and formalities that the law of wills provides. Without these protections, there is a greater risk of fraud and perjury. To combat this effect, the courts have refined the circumstances under which a gift mortis causa can be found to have been made.

In order for a gift mortis causa to be effective, it must meet the following criteria:

  1. The gift or donation must have been made in contemplation, though not necessarily in expectation, of death;
  1. There must have been delivery to the donee of the subject-matter of the gift; and
  1. The gift must be made under circumstances such that the thing is to revert to the donor in case he or she should recover. (Cain v Moon, [1896] 2 Q.B. 283 at 286.)

Furthermore, dependant’s relief legislation has stepped in to claw back any potential deathbed gifts in order to satisfy a dependant’s claim. The Succession Law Reform Act provides:

72.(1) Subject to section 71, for the purpose of this Part, the capital value of the following transactions effected by a deceased before his or her death, whether benefitting his or her dependant or any other person, shall be included as testamentary dispositions as of the date of the death of the deceased and shall be deemed to be part of his or her net estate for purposes of ascertaining the value of his or her estate, and being available to be charged for payment by an order under clause 63 (2) (f),

(a) gifts mortis causa; […]

Interestingly, while the Canadian common law courts continue to struggle with the challenge deathbed giving presents, the civil law in Quebec has taken the pre-emptive step of declaring gifts mortis causa null and void unless it appears in a marriage contract made in due form or can be upheld as a legacy. Article 1820 of the Civil Code of Quebec further provides that a gift made during the mortal illness of the donor will be deemed to be a gift mortis causa and as such, is invalid.

Legislation in common law Canada has been largely silent with respect to this issue. As a result, it has fallen to the courts to address the challenges deathbed giving presents. This has led to  much debate surrounding the Cain v Moon factors, including the meaning of “in contemplation of death,” and whether the person must be “in extremis” for the gift to be valid.

Thank you for reading.

Suzana Popovic-Montag

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