Imperfectly Made Gifts

• Published date: 27 November 2023
• Subject Matter: Family and Matrimonial, Wills/ Intestacy/ Estate Planning
• Law Firm: RHTLaw Asia LLP
• Author: Ms Amita Dutt

"The best gifts come from the heart, not the store."
Sarah Dessen

A properly made gift is one that the law will uphold as valid when challenged.

Unlike real estate, most movable (objects) do not have a title deed. Any intended change in ownership requires a purposeful, clear and complete act. Increasingly, executors look to the High Court in Singapore to decide if a gift had been made by the deceased testator. A gift made imperfectly will not go to the donee. It will form part of the deceased's estate and will be distributed by the executor.

The heartfelt gift fails.

A few months ago, an article of mine highlighted the High Court case Teo Song Kheng v Teo Poh Hoon [2020] SGHC 47 where a gift of jewelry in a mother's safe deposit box was held to have been imperfectly made. Click here for a read.

In March 2022 and, on appeal, in February 2023, the General Division of the High Court (Family Division) and the Appellate Division of the High Court, respectively, decided that a gift of US$1.5 million from a mother to a daughter was imperfectly made; WDS v WDT [2022] SGHCF 12 and WDT v WDS [2023] SGHC (A) 7. In wanting to make a gift of money, a mother turned to her lawyer to draft the document and guide her in the process. In the meantime, while waiting for the lawyer to revert, the mother signed a letter drafted by a friend ("the letter") which contained instructions to both her lawyers and bankers to execute all necessary fund transfers "now" for the gift of the money to the donee. The letter was then handed to the same friend, who kept it right up to the time the mother passed away. After which she handed the letter to the donee.

Incidentally, the day after the letter had been signed by the mother, the mother's lawyer sent a draft deed of gift for the mother's approval. Unfortunately, the mother passed away before this deed was executed. Because there was a high chance that the deed would be challenged by the other children, the lawyer advised, and the mother accepted that she had to undergo a mental capacity assessment before the deed was executed. This was a process the mother was familiar with because it was the second time she was making a gift of money to the donee. Before the assessment was done, the mother passed away.

The executor of the mother's estate sought the Court's determination of the alleged gift.

The Law

Previously, in Teo's case, the Judge listed 3 elements to be fulfilled for a valid gift to be made during a donor's lifetime:

• The...