Legal Definitions - gift in contemplation of death

A gift in contemplation of death, also known by its Latin term gift causa mortis, is a special type of gift made by an individual who believes they are facing imminent death. This differs significantly from an ordinary gift (an inter vivos gift), which is typically final and irrevocable once accepted.

For a gift to be considered a gift in contemplation of death, it must meet several specific conditions:

• It must be made in anticipation of the donor's impending death from a specific peril or illness.
• The gift is conditional; it only becomes final and irrevocable upon the donor's actual death from that anticipated cause.
• The donor retains the right to revoke the gift at any time before their death. If the donor recovers from the anticipated danger or illness, or if they die from a different cause, the gift is automatically revoked, and the property must be returned.
• These gifts typically apply only to personal property (such as jewelry, cash, or vehicles), not real estate.
• For tax purposes, a gift in contemplation of death is usually treated as part of the donor's estate rather than as a completed gift during their lifetime.

This type of gift often serves as a way for someone to quickly distribute personal belongings when they are unable to update their will due to a sudden, life-threatening situation.

Here are some examples to illustrate this concept:

• Example 1: High-Risk Surgery

  Before undergoing a complex and high-risk heart surgery, Mr. Chen hands his antique pocket watch, a cherished family heirloom, to his daughter, Lisa. He tells her, "If I don't make it through this operation, I want you to have this. It's always been special to me."

  Explanation: This is a gift in contemplation of death because Mr. Chen is facing an imminent, life-threatening event (the surgery). The gift of the watch is conditional on his death from this specific peril. If he survives the surgery, he has the legal right to ask for the watch back, and it would no longer be Lisa's. If he unfortunately passes away during or due to the surgery, the gift becomes final, and the watch legally belongs to Lisa.

• Example 2: Dangerous Expedition

  An experienced mountaineer, Dr. Anya Sharma, is about to embark on a solo expedition to a notoriously dangerous peak. Before leaving, she gives her valuable collection of rare first-edition books to her research assistant, Mark, stating, "If I don't return from this climb, these books are yours. Please ensure they're cared for."

  Explanation: Dr. Sharma's gift of the book collection is made in contemplation of death because she is facing a clear and present danger to her life from the expedition. The gift is conditional on her death during the climb. If she returns safely, she can revoke the gift and reclaim her books. If she tragically perishes during the expedition, the book collection legally belongs to Mark.

• Example 3: Terminal Illness

  Mrs. Rodriguez, who has been diagnosed with a rapidly progressing terminal illness and given only a few weeks to live, gives her expensive diamond necklace to her niece, Sofia, telling her, "I won't be needing this much longer. I want you to have it now, as a reminder of our bond."

  Explanation: This situation illustrates a gift in contemplation of death because Mrs. Rodriguez is facing an imminent and certain death due to her illness. The gift of the necklace is made with the expectation of her impending demise. Should she miraculously recover (which is legally possible, though medically unlikely in this scenario), she would have the right to revoke the gift. Upon her death, the transfer of the necklace to Sofia becomes final.