Definition
A deathbed gift (also known as gift in contemplation of death) is a transfer of personal property or assets made by a donor who anticipates their imminent death. The transfer is conditional on the donor’s death, meaning that if the donor survives the anticipated peril or recovers from the illness, the gift becomes void. It is typically used as an estate planning tool to manage and distribute a donor’s assets in a more controlled manner near the end of life.
Examples
- Jewelry Transfer: An individual who is terminally ill decides to bequeath a valuable piece of family jewelry to their granddaughter. The grandmother instructs that the jewelry should only be handed over upon her passing.
- Cash Gift: A dying person transfers a specific amount of cash to a trusted friend with the condition that the money should only be used for a charitable purpose after their death.
- Property Deed: A person in an advanced stage of a terminal illness signs over a deed to a property stipulating that the transfer is only effective once they have passed away.
Frequently Asked Questions
What are the legal requirements for a deathbed gift?
To be valid, a deathbed gift generally must meet several legal requirements:
- The donor must have a present and overriding fear of imminent death.
- The gift must be delivered or deeded to the recipient.
- There must be clear intention from the donor that the gift is only to take effect upon their death.
Can a deathbed gift be revoked?
Yes, if the donor survives the anticipated peril or illness that prompted the gift, they can revoke the deathbed gift. It becomes void in this situation.
How is a deathbed gift different from an inter vivos gift?
An inter vivos gift is one made during the lifetime of the donor without any conditions pertaining to death. In contrast, a deathbed gift is conditional on the donor’s death.
Are deathbed gifts subject to estate taxes?
Yes, deathbed gifts can be subject to estate taxes depending on the value of the gift and the jurisdiction’s tax laws surrounding estate and inheritance.
Related Terms
Estate Planning
The process of organizing the distribution of an individual’s assets after their death.
Inter Vivos Gift
A gift made from one living person to another without any conditions related to the donor’s death.
Testamentary Trust
A trust that is established upon the death of an individual and typically forms part of their will.
Donor
A person who makes a gift or bequeaths property.
Online Resources
- Investopedia on Estate Planning
- Legal Information Institute - Gift in Contemplation of Death
- Nolo on Estate Planning Basics
Suggested Books for Further Studies
- Estate Planning Basics by Denis Clifford
- Wills, Trusts, and Estates (Aspen Casebook Series) by Robert H. Sitkoff and Jesse Dukeminier
- The Complete Estate Planning Guide by Kathleen Adams and Bonnie Brown Hartley
Fundamentals of Deathbed Gift: Estate Planning Basics Quiz
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