Can a gift of land during the donor's lifetime defeat a claim against his or her estate after death? - follow up

Further to my post of 22 September 2020 (see: https://melbournepropertylaw.blogspot.com/2016/01/can-gift-of-land-during-donors-lifetime.html, Teri Konstantinou has written an article about a recent NSW Court of Appeal decision (Mentink v Olsen - [2020] NSWCA 182) in which the trial judge set aside a gift by a dying mother to her daughter. See https://www.linkedin.com/pulse/mentink-v-olsen-2020-nswca-182-elefteria-teri-konstantinou/?trackingId=ZhuaYDE6QPOJRPO5pBsdNw%3D%3D

The background was that the mother was terminally ill, aged 75 years, and she was survived by her husband and daughter of a previous marriage.

In the course of the deceased's life time, she gifted the sum of $2.2m to her daughter in. The widower sued his step daughter alleging that she procured this money from her mother by placing undue pressure and influence on the deceased and by contriving her mother's change of mind to gift that money to her. In so doing, the widower argued further that his step daughter had taken advantage of her mother's vulnerability in unconscionable circumstances.

The Trial judge agreed; so did the Court of Appeal.

The Court of Appeal found that the real issue was that the daughter could not be satisfied that her mother was capable of making the decision to gift this money to her without any accounting or legal advice. That advice was critical to ensure that the deceased understood whether or not it was her money to gift at all. It followed that the daughter could not be satisfied that her mother gave due and proper consideration to the question whether it was in her best interests to make the gift to her daughter.

Conclusion

As I noted in the previous post, it will most likely be necessary, for a gift to be effective, to have a medical report confirming that the gift maker is of sound mind, as well as to document the reasons for the gift.

It would also be useful to have the gift receiver not involved in the transaction. Instead, the gift should be documented by an independent lawyer, who is acquainted with the gift giver, or who at least meets with the giver and satisfies themselves about the circumstances of the gift, and the fact that the gift giver is not being unduly influenced by the donee, and provides the giver with legal advice about the legal effect of the gift.

Finally, it now appears that it would also be useful to have the gift giver obtain independent financial and accounting advice, as well as legal advice, prior to entering into the transaction, if it is to be saved from attack after the gift giver dies.

This post originally appeared on Melbourne Property Law Blog