What Is Gift Causa Mortis?
A gift causa mortis is a transfer of personal property made by a person who anticipates impending death. This concept falls under Estate Planning, addressing how assets can be distributed outside of a formal will but still in contemplation of one's demise. Unlike an ordinary gift, a gift causa mortis is conditional and becomes irrevocable only upon the donor's death from the anticipated peril or illness47. If the donor recovers or the anticipated event does not occur, the gift is automatically revoked, and the property reverts to the donor46. The term "causa mortis" is Latin for "because of death" or "contemplating death"44, 45.
History and Origin
The principle of donatio mortis causa, the Latin term for gift causa mortis, has deep roots in Roman law42, 43. This ancient legal doctrine recognized that individuals might wish to make specific provisions for the disposition of their property when facing imminent death, distinct from formal testamentary instruments like wills41. Over centuries, this concept was adopted and evolved within various legal systems, including common law jurisdictions40. Early Roman legal scholars, such as Julianus, identified different forms, primarily focusing on gifts made in immediate danger or those contingent upon the giver's death39. The defining characteristic has always been its conditional nature, taking effect only if death ensues and being revocable if the donor survives38.
Key Takeaways
- A gift causa mortis is a transfer of personal property made in anticipation of imminent death.
- The gift is conditional and revocable by the donor if they recover or the anticipated peril passes37.
- It becomes irrevocable only upon the donor's death from the specific peril or illness contemplated when the gift was made36.
- For a gift causa mortis to be valid, there must be intent to give, delivery of the property, and acceptance by the donee34, 35.
- Unlike gifts made through a will, gifts causa mortis do not require the formalities of a legal document like witness signatures33.
Interpreting the Gift Causa Mortis
Interpreting a gift causa mortis involves assessing the donor's intent, the nature of the delivery, and the circumstances surrounding the impending death. For such a conditional gift to be legally valid, the donor must make the gift with a clear contemplation of death, not merely a general acknowledgment of mortality30, 31, 32. The delivery of the property to the donee is crucial; it must be a transfer of control, even if not necessarily full legal ownership at that moment29. If the donor recovers from the illness or escapes the peril that prompted the gift causa mortis, the gift is automatically voided. The interpretation often hinges on whether the donor's actions and words clearly indicate that the gift was contingent on death and was not intended as an immediate, unconditional transfer.
Hypothetical Example
Consider Maria, a 75-year-old woman scheduled for a high-risk surgery. Before entering the operating room, she calls her niece, Sofia, to her bedside. Maria hands Sofia her antique diamond necklace, a cherished family heirloom, and says, "Sofia, I want you to have this necklace if I don't make it through this surgery. You've always loved it." Sofia accepts the necklace. This scenario illustrates a gift causa mortis. Maria, the donor, has delivered the personal property (the necklace) to Sofia, the donee, with the explicit intention that the transfer only becomes permanent if Maria dies from the surgery. If Maria survives the operation and recovers, the gift is automatically revoked, and she retains ownership of the necklace. If she passes away due to complications from the surgery, the gift becomes irrevocable, and Sofia becomes the rightful owner, bypassing the typical probate process for that specific item.
Practical Applications
While less common than planned transfers via wills, the gift causa mortis provides a mechanism for asset transfer in specific, urgent circumstances. It is primarily applicable to tangible personal property and sometimes to intangible assets represented by physical documents, like share certificates or bank passbooks27, 28. For instance, an individual facing an immediate, life-threatening situation, such as a dangerous medical procedure or deployment to a high-risk area, might make a gift causa mortis to ensure a specific item goes to a chosen beneficiary without waiting for probate.
It is important to note the tax implications. Generally, a gift causa mortis is treated for federal tax purposes as if it were part of the deceased's estate tax rather than an inter vivos gift (a gift made between living persons)26. This means it may be included in the deceased's gross estate for estate tax calculation, even if it bypasses probate. The Internal Revenue Service (IRS) provides detailed guidance on gift tax rules, noting various exclusions and lifetime exemptions that apply to transfers of wealth25. For current information on gift tax rules, refer to the Internal Revenue Service FAQs.
Limitations and Criticisms
Despite its utility in certain situations, the gift causa mortis comes with significant limitations and is often subject to legal scrutiny due to its informal nature24. A key limitation is that it generally applies only to personal property, not real estate21, 22, 23. Courts tend to be cautious with these gifts because they lack the formalities and witness requirements of a traditional will, making them susceptible to disputes and potential fraud19, 20. Proving the donor's true intent and the circumstances of the impending death can be challenging after the donor has passed away. Furthermore, if the donor recovers from the specific peril that prompted the gift, the gift causa mortis is automatically revoked, regardless of the donor's later wishes18. This can lead to complications if the donor intended the gift to be permanent. For additional insights into the risks and challenges, the academic article "Donatio mortis causa: the gift that keeps on giving" explores some of these complexities17.
Gift Causa Mortis vs. Gift Inter Vivos
The primary distinction between a gift causa mortis and a gift inter vivos lies in their revocability and the circumstances surrounding their creation. A gift inter vivos (Latin for "between the living") is an ordinary, unconditional gift made during the donor's lifetime. Once a gift inter vivos is delivered and accepted, it is generally irrevocable; the donor relinquishes all legal ownership and cannot take it back15, 16.
In contrast, a gift causa mortis is always made in contemplation of impending death and is inherently conditional13, 14. It remains revocable by the donor until their death from the anticipated peril12. If the donor survives the contemplated danger, the gift causa mortis is automatically voided11. While both involve a transfer of property, the inter vivos gift is a completed and permanent transaction at the time of delivery and acceptance, whereas the causa mortis gift is contingent on the donor's death.
FAQs
What kind of property can be given as a gift causa mortis?
Generally, a gift causa mortis applies only to personal property, which includes tangible items like jewelry, cash, or vehicles, and certain intangible assets represented by documents such as stock certificates or bank books8, 9, 10. It typically does not apply to real estate.
Does a gift causa mortis need to be in writing?
No, a gift causa mortis does not typically need to be in writing or comply with the formal requirements of a will7. The key requirements are the donor's intent, the delivery of the property, and the donee's acceptance, all made in contemplation of impending death5, 6.
Can a gift causa mortis be revoked?
Yes, a gift causa mortis is fully revocable by the donor at any time before their death, for any reason4. It is also automatically revoked if the donor recovers from the specific illness or peril that prompted the gift3. This characteristic makes it a conditional gift.
How is a gift causa mortis taxed?
For federal tax purposes, a gift causa mortis is generally treated as if it were part of the deceased's estate2. This means it may be subject to estate tax rather than the gift tax rules that apply to transfers made between living individuals1.