Gift causa mortis is a term that refers to a gift of personal property given in the anticipation of impending death. This type of gift is distinct from an inheritance specified in a will or gifts given during the giver’s lifetime.
Key Takeaways
- A gift causa mortis is given because the donor expects to pass away soon.
- Unlike transfers via a will or inter vivos gifts, a gift causa mortis remains revocable until the donor’s death and may have different tax implications.
- The term stems from the Latin phrase causa mortis, meaning “contemplating death.”
Understanding Gift Causa Mortis
A gift causa mortis becomes effective only upon the donor’s death. This conditional gift is often referred to as a deathbed gift since it commonly occurs when the donor is nearing the end of their life.
A gift causa mortis can be made when anticipating the death of the grantor, in contrast to inter vivos gifts made during the grantor’s lifetime. Under federal estate tax laws, a gift causa mortis is treated similarly to a gift bequeathed by a will. A will is the legal document for distributing an estate to specified beneficiaries after the testator’s death.
Contrast: Gift Causa Mortis and Gift Inter Vivos
The main distinctions between an inter vivos gift and a gift causa mortis are:
- Revocability: Gifts causa mortis can be revoked by the donor until their death, whereas inter vivos gifts cannot be undone once given.
- Conditionality and Security: A gift causa mortis, though delivered and accepted, assures the beneficiary’s right to the gift only after the donor dies. If the donor survives, the gift is automatically revoked.
- Tax Implications: Gifts causa mortis are taxed as part of the federal estate, similarly to bequests by will. However, even inter vivos gifts made within three years of the donor’s death are subject to federal estate tax.
In essence, a gift causa mortis can be revoked by the donor for any reason as long as they are alive. Moreover, these gifts are conditional on the beneficiary outliving the donor. If this condition isn’t met, the gift is reversed, and the beneficiary’s estate inherits no interest in the property.
Thus, gift causa mortis stands out due to its unique conditional and revocable nature, as well as its specific tax treatments under estate tax laws.
Related Terms: inheritance, wills, estate tax, gift inter vivos, grantor, beneficiary.
References
Get ready to put your knowledge to the test with this intriguing quiz!
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## What is a "Gift Causa Mortis"?
- [x] A gift given by someone who anticipates their imminent death
- [ ] A gift given during holidays
- [ ] A gift exchanged in a business transaction
- [ ] A gift given to celebrate a wedding
## Under which condition a "Gift Causa Mortis" can be revoked?
- [ ] It cannot be revoked once given
- [x] If the donor recovers from the anticipated peril
- [ ] If the recipient refuses the gift
- [ ] After a period of four years
## Which of the following is a key feature of a "Gift Causa Mortis"?
- [ ] It is intended for public benefit
- [ ] It is irrevocable once delivered
- [x] It is given in contemplation of impending death
- [ ] It includes a formal contract
## When does a "Gift Causa Mortis" become legally effective?
- [x] Upon the donor's death
- [ ] Once a contract is signed
- [ ] Upon verbal agreement
- [ ] As soon as the gift is handed over
## Which of these is necessary to validate a "Gift Causa Mortis"?
- [ ] Approval from a legal advisor
- [x] The donor believes they may not survive a current peril
- [ ] Agreement by a witness
- [ ] A written document signed by both parties
## Can real estate be transferred as a "Gift Causa Mortis"?
- [ ] Yes, under all circumstances
- [ ] No, real estate cannot be gifted in this manner
- [x] Yes, but it requires additional legal scrutiny
- [ ] Only if the deed is changed beforehand
## How does a "Gift Causa Mortis" differ from a regular gift?
- [ ] It cannot be over a certain amount
- [x] It is conditional upon the donor’s death
- [ ] It must be accompanied by a will
- [ ] It does not need any documentation
## If the donor of a "Gift Causa Mortis" executes a will after the gift, which prevails?
- [ ] The "Gift Causa Mortis" always prevails over a will
- [ ] Neither; they cancel each other out
- [x] The will can prevail if it explicitly revokes the gift
- [ ] Both are equally valid without any hierarchy
## Who can claim a "Gift Causa Mortis" after the donor’s death?
- [ ] Any family member
- [x] The recipient to whom it was given
- [ ] The executor of the estate
- [ ] A predetermined charity
## In which scenario a "Gift Causa Mortis" might not be legally upheld?
- [ ] If given with a handwritten note
- [ ] If witnessed by multiple people
- [x] If the donor dies from an unrelated cause than anticipated
- [ ] If transferred to a blood relative
