A deathbed gift is more than a final gesture; it is a legal minefield where capacity and intention will determine whether a transfer of property stands or falls. This post unpacks how subtle shifts in capacity and conditional intention can mean the difference between a valid transfer and a void act.
Introduction
This third installment of our series explores the divergence between inter vivos gifts and donatio mortis causa (“DMC”), as it pertains to the mental states required for each. The focus will be on the requisite levels of understanding as well as the required intention of the donor. In particular, this post will examine how the law examines capacity as tied to the nature and effect of the transfer, while imposing a distinct, conditional intention requirement unique to DMC.
The Capacity Required for Inter Vivos Transfers
For lifetime gifts, the donor must possess the mental capacity to understand the nature of the transaction. Unless there is evidence to the contrary, individuals benefit from a presumption of capacity.[1]
According Poyser,[2] Ball v Mannin (1829)[3] is widely accepted as the seminal case in both England and Canada as the leading authority on capacity to make an inter vivos gift.[4] Pursuant to Ball v Mannin, and the subsequent jurisprudence applying and refining the test,[5] the degree of understanding required varies depending on the circumstances and nature of the transaction.[6]
For trivial gifts, meaning if the subject-matter and value of a gift are nominal in relation to the donor’s other assets, a low degree of understanding will be sufficient to effect the transfer.[7] Conversely, for substantial gifts, meaning the subject-matter and value would have the effect of pre-emptively devaluing their estate, then the degree of understanding required is as high as that required for a will.[8] Consequently, depending on the circumstances and value, a donee may have to satisfy the criteria as set forth in Banks v. Goodfellow (1870).[9]
The Intention Required for Inter Vivos Transfers
Without going too far into the weeds of presumptive resulting trusts, the intention necessary to effect an inter vivos gift depends on the circumstances that exist between the donor and donee. As noted by the Supreme Court of Canada in their decision of Pecore v Pecore, in the context of gratuitous transfer either the presumption of advancement or the presumption of resulting trust will apply.[10] The applicable presumption will only determine the result where there is insufficient evidence to rebut it on a balance of probabilities.[11]
Nonetheless the focus remains on whether the donor truly intended to gift the assets, and regardless of intention, where capacity is absent at the moment the gift is completed, the transfer is void.
The Capacity Required for DMC Transfers
Capacity in the context of DMC is uniquely nuanced because the gift is almost always made in the “shadow of death”. While transfers DMC blur the line between testamentary and inter vivos,[12] the conventional understanding is that the capacity to effect a valid transfer DMC is more closely aligned with the capacity required to complete inter vivos gifts. However, as we have just seen and articulated above, inter vivos capacity is wholly dependent on the circumstances of the transfer and may be required to satisfy the criteria testamentary capacity as per Banks v Goodfellow.
Turning to authorities outside of Canada, in their decision of Kenyon v. Curtis (2004),[13] the Court emphasized that while a donor must understand they are making a gift that will take effect upon death, they do not necessarily need to satisfy the exhaustive testamentary capacity requirements; such as being able to recall all potential “moral claimants” to their estate.
Additionally, because a DMC is usually made when the donor is physically frail or near death, the evidence regarding capacity is often scrutinized with greater rigor. If the donor’s illness has progressed to the point of delirium or extreme cognitive impairment, the “contemplation of death” requirement may be met, but the “requisite capacity” will fail, rendering the gift void.
The Intention Required for DMC Transfers
The intention required to effect a valid DMC is fundamentally distinct from that of an inter vivos gift, in that it must be expressly conditional upon the donor’s death. The donor must intend that the property pass only if death occurs, and that the gift remain revocable should they recover.
In Re Beaumont; Beaumont v. Ewbank, (1902),[14] the Court held that it is sufficient if the donor intended the transfer to be absolute upon death, even if not stated in explicit terms.[15] Similarly, in Re Craven’s Estate,[16] the Court emphasized that the conditional nature of the gift taking effect only upon death, must be made clear for the DMC to be valid. Taken together, these authorities underscore that intention in the DMC context must be both clear and conditional.
Final Remarks
Ultimately, it remains arguable whether the law draws a distinction as it pertains to capacity required to effect a valid transfer under inter vivos and DMC, as both are tied to the circumstances and nature of the subject matter being transferred.
In regard to intention, there is a clear distinction as inter vivos gifts must reflect a present and unequivocal divestment, whereas transfers DMC must be expressly conditional upon death and revocable until that point.
—
[1] Pursuant to section 2 of the Substitute Decisions Act, 1992, S.O. 1992, c. 30
and section 4(2) of the Health Care Consent Act, 1996, S.O. 1996, c. 2, Sched. A.
[2] John E.S. Poyser, Capacity and Undue Influence (Toronto: Carswell, 2014), at p. 373.
[3] Ball v. Mannin (1829), 4 E.R. 1241(H.L.).
[4] Palichuk v. Palichuk, 2021 ONSC 7393 (CanLII), at para 156.
[5] Re Beaney (Deceased), [1978] 2 All E.R. 595.
[6] Ibid., at p. 601.
[7] Ibid.
[8] Ibid.
[9] Banks v. Goodfellow (1870), LR 5 QB 549 (“Banks v Goodfellow”).
[10] Pecore v. Pecore, 2007 SCC 17 (CanLII), at paras 23‑24, 27, 43‑44 (“Pecore”).
[11] Ibid.
[12] As discussed at length in our previous entry – Found Here.
[13] Kenyon v. Curtis (2004), EWHC 774 (Ch).
[14] Re Beaumont; Beaumont v. Ewbank, [1902] 1 Ch. 889, [1900-3] All E.R. Rep. 273, 71 L.J. Ch. 478 (Ch. D.).
[15] Ibid., at pp. 892-93; See also Saulnier v. Anderson, 1987 CanLII 5283 (NB QB), at para 30
[16] Re Craven’s Estate 1937 (1 Ch 423).
Written by: Grant Swedak
Posted on: May 1, 2026
Categories: Commentary, Donatio Mortis Causa Series
A deathbed gift is more than a final gesture; it is a legal minefield where capacity and intention will determine whether a transfer of property stands or falls. This post unpacks how subtle shifts in capacity and conditional intention can mean the difference between a valid transfer and a void act.
Introduction
This third installment of our series explores the divergence between inter vivos gifts and donatio mortis causa (“DMC”), as it pertains to the mental states required for each. The focus will be on the requisite levels of understanding as well as the required intention of the donor. In particular, this post will examine how the law examines capacity as tied to the nature and effect of the transfer, while imposing a distinct, conditional intention requirement unique to DMC.
The Capacity Required for Inter Vivos Transfers
For lifetime gifts, the donor must possess the mental capacity to understand the nature of the transaction. Unless there is evidence to the contrary, individuals benefit from a presumption of capacity.[1]
According Poyser,[2] Ball v Mannin (1829)[3] is widely accepted as the seminal case in both England and Canada as the leading authority on capacity to make an inter vivos gift.[4] Pursuant to Ball v Mannin, and the subsequent jurisprudence applying and refining the test,[5] the degree of understanding required varies depending on the circumstances and nature of the transaction.[6]
For trivial gifts, meaning if the subject-matter and value of a gift are nominal in relation to the donor’s other assets, a low degree of understanding will be sufficient to effect the transfer.[7] Conversely, for substantial gifts, meaning the subject-matter and value would have the effect of pre-emptively devaluing their estate, then the degree of understanding required is as high as that required for a will.[8] Consequently, depending on the circumstances and value, a donee may have to satisfy the criteria as set forth in Banks v. Goodfellow (1870).[9]
The Intention Required for Inter Vivos Transfers
Without going too far into the weeds of presumptive resulting trusts, the intention necessary to effect an inter vivos gift depends on the circumstances that exist between the donor and donee. As noted by the Supreme Court of Canada in their decision of Pecore v Pecore, in the context of gratuitous transfer either the presumption of advancement or the presumption of resulting trust will apply.[10] The applicable presumption will only determine the result where there is insufficient evidence to rebut it on a balance of probabilities.[11]
Nonetheless the focus remains on whether the donor truly intended to gift the assets, and regardless of intention, where capacity is absent at the moment the gift is completed, the transfer is void.
The Capacity Required for DMC Transfers
Capacity in the context of DMC is uniquely nuanced because the gift is almost always made in the “shadow of death”. While transfers DMC blur the line between testamentary and inter vivos,[12] the conventional understanding is that the capacity to effect a valid transfer DMC is more closely aligned with the capacity required to complete inter vivos gifts. However, as we have just seen and articulated above, inter vivos capacity is wholly dependent on the circumstances of the transfer and may be required to satisfy the criteria testamentary capacity as per Banks v Goodfellow.
Turning to authorities outside of Canada, in their decision of Kenyon v. Curtis (2004),[13] the Court emphasized that while a donor must understand they are making a gift that will take effect upon death, they do not necessarily need to satisfy the exhaustive testamentary capacity requirements; such as being able to recall all potential “moral claimants” to their estate.
Additionally, because a DMC is usually made when the donor is physically frail or near death, the evidence regarding capacity is often scrutinized with greater rigor. If the donor’s illness has progressed to the point of delirium or extreme cognitive impairment, the “contemplation of death” requirement may be met, but the “requisite capacity” will fail, rendering the gift void.
The Intention Required for DMC Transfers
The intention required to effect a valid DMC is fundamentally distinct from that of an inter vivos gift, in that it must be expressly conditional upon the donor’s death. The donor must intend that the property pass only if death occurs, and that the gift remain revocable should they recover.
In Re Beaumont; Beaumont v. Ewbank, (1902),[14] the Court held that it is sufficient if the donor intended the transfer to be absolute upon death, even if not stated in explicit terms.[15] Similarly, in Re Craven’s Estate,[16] the Court emphasized that the conditional nature of the gift taking effect only upon death, must be made clear for the DMC to be valid. Taken together, these authorities underscore that intention in the DMC context must be both clear and conditional.
Final Remarks
Ultimately, it remains arguable whether the law draws a distinction as it pertains to capacity required to effect a valid transfer under inter vivos and DMC, as both are tied to the circumstances and nature of the subject matter being transferred.
In regard to intention, there is a clear distinction as inter vivos gifts must reflect a present and unequivocal divestment, whereas transfers DMC must be expressly conditional upon death and revocable until that point.
—
[1] Pursuant to section 2 of the Substitute Decisions Act, 1992, S.O. 1992, c. 30
and section 4(2) of the Health Care Consent Act, 1996, S.O. 1996, c. 2, Sched. A.
[2] John E.S. Poyser, Capacity and Undue Influence (Toronto: Carswell, 2014), at p. 373.
[3] Ball v. Mannin (1829), 4 E.R. 1241(H.L.).
[4] Palichuk v. Palichuk, 2021 ONSC 7393 (CanLII), at para 156.
[5] Re Beaney (Deceased), [1978] 2 All E.R. 595.
[6] Ibid., at p. 601.
[7] Ibid.
[8] Ibid.
[9] Banks v. Goodfellow (1870), LR 5 QB 549 (“Banks v Goodfellow”).
[10] Pecore v. Pecore, 2007 SCC 17 (CanLII), at paras 23‑24, 27, 43‑44 (“Pecore”).
[11] Ibid.
[12] As discussed at length in our previous entry – Found Here.
[13] Kenyon v. Curtis (2004), EWHC 774 (Ch).
[14] Re Beaumont; Beaumont v. Ewbank, [1902] 1 Ch. 889, [1900-3] All E.R. Rep. 273, 71 L.J. Ch. 478 (Ch. D.).
[15] Ibid., at pp. 892-93; See also Saulnier v. Anderson, 1987 CanLII 5283 (NB QB), at para 30
[16] Re Craven’s Estate 1937 (1 Ch 423).
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