Gifts Mortis Causa
A recent Ontario case provides a look at the legal rule Donatio Mortis Causa, which is an old and well established principle of the common law.
In Snitzler v. Snitzler (2015), an elderly woman lived in a home with her husband and her adult son William. The woman, Maria Snitzler, held title to the home in her name alone. Mrs. Snitzler was diagnosed with liver cancer. After her diagnosis and shortly prior to her death she transferred title to the home from her name to herself, her husband and her two children as joint tenants. Mrs. Snitzler died shortly after the transfer.
Following Mrs. Snitzler’s death, William brought a claim against his mother’s estate for support as a dependant. Despite being an adult child, William claimed that he was entitled to additional support from his mother’s estate. The mother’s will left her estate equally to her husband, William and William’s sister, Susie Snitzler.
Since title to the home was transferred prior to Mrs. Snitzler’s death, the home was not part of Mrs. Snitzler’s estate. In other words, the home or rather the proceeds from the sale of the home was not an asset that William could turn to for the payment of support in the event he was successful in his claim.
William brought a motion asking the court to find that the proceeds from the sale of the house were part of Mrs. Snitzler’s estate. William relied upon Section 72(1)(a) of the Succession Law Reform Act (“SLRA”) which provides that gifts “mortis causa” can be essentially clawed back into a deceased’s estate for the purpose of paying support to a dependant.
A gift “mortis causa” is a gift made in contemplation of death. Therefore in the event the transfer of the home was made “in contemplation of death” the total net proceeds could be used to pay William’s claim, if he was successful. In the event the transfer of the home was not a gift mortis causa, William would not be able to go after his father and sister’s share of the proceeds from the sale of the home.
The court reviewed the legal principle of Donatio Mortis Causa which has three essential components:
“First, the gift or donation must have been made in contemplation, though not necessarily in expectation of death; Secondly, there must have been delivery to the donee of the subject-matter of the gift; and Thirdly, the gift must be under such circumstances to show that the thing is to revert to the doner in case he should recover.”
In this case, the analysis turned on the third criteria—whether the gift was intended to revert back to the mother in the event she were to recover.
The court found that the gift was a completed gift and was not “conditional.” In other words, there was no evidence that the mother intended the house to revert back to her in the event of her recovery. In fact, there was no expectation at all of a recovery. Also, there was no ability on the mother after transfer to enforce a re-transfer of the house back to her name alone. In the words of the court,
“In order for a gift to be considered ‘donatio mortis causa’ the court must conclude that the transfer conferred only conditional rights upon the transferee. It follows that the gift is legally conditional at the time it is made in the sense that the donor retains enforceable legal rights in the property and the donee’s rights are subject to them.”
Ultimately therefore the son William lost the hearing. Despite not being successful, in my view, the claim by William was a creative way to go after money that would be used to pay his support.
The case provides an interesting review of an old legal principle that is not often invoked. Thanks for reading,