As we get older, it’s only natural to start thinking about what happens after we’re gone. We spend a lifetime building wealth—not just for our own retirement, but to provide comfort for those we leave behind. A well-drafted Will and a thoughtful estate plan are often seen as the final expression of our intentions. But what happens when you try to give a gift before you pass away—and don’t quite finish the job?
That’s exactly what happened in a recent case our firm was involved in. It centered around a potential $400,000 gift that never quite made it into the hands of the recipient—and the legal fallout that followed.
Two Ways to Give: Inter Vivos vs Testamentary Gifts
When it comes to giving money or property to loved ones, there are two legal avenues:
- Testamentary gifts are made through a Will and take effect after death.
- Inter vivos gifts (Latin for “between the living”) are made during a person’s lifetime.
While testamentary gifts follow the formalities laid out in estate law, inter vivos gifts are governed by a different—and often stricter—set of rules. One of the most important? The legal presumption that people don’t just give away money or assets.
At first glance, that might seem like a harsh stance, especially in a country known for its generosity. But this rule isn’t about cynicism; it’s about protection. It acts as a safeguard for the elderly and vulnerable, helping to prevent coercion, manipulation, or misunderstanding. It also gives the Courts a structured way to return misappropriated funds when a so-called “gift” can’t be properly proven.
In short: if you’re going to give a gift during your lifetime, the law expects you to make it crystal clear, and to follow through properly.
The Case of the $400,000 That Was (Almost) Given
In late 2022, Mr. Poole began contemplating a significant inter vivos gift: $400,000 to his daughter, Sandra—who also happened to be named as Mr. Poole’s Estate Trustee. He met with his financial advisor and later with his lawyer, who prepared a gift letter.
But here’s where things began to unravel.
- The financial advisor’s meeting notes made no mention of a specific gift or its amount.
- The gift letter, signed November 30, 2022, was vague. It referenced a potential gift “while I am alive” but included no amount or firm commitment.
- A follow-up meeting to clarify the instructions never happened, and Mr. Poole passed away on December 26, 2022.
Soon after Mr. Poole’s passing, Sandra received the $400,000 from the investment firm, after signing a Full and Final Release, and transferred it into her personal account. But another beneficiary wasn’t convinced the gift was valid. She brought a court application to set it aside.
The Legal Test for a Valid Inter Vivos Gift
To prove a valid inter vivos gift, three elements must be present:
- Intent – The donor must have a clear intention to make the gift.
- Delivery – The donor must actually give up control of the gift.
- Acceptance – The recipient must accept the gift.
The burden of proof lies with the person receiving the gift. If the recipient can not prove all three of these elements were present at the time the alleged gift was made, the law presumes that they were given the assets to hold in trust for the giver, to be returned upon the giver’s request. In this case, the evidence just didn’t hold up.
- The financial advisor’s notes were inconclusive.
- The gift letter expressed only a possibility of a gift—not a certainty.
- Sandra, during cross-examination, admitted she didn’t truly know what her father’s intentions were.
Further, Mr. Poole had not transferred the funds before his death, meaning he hadn’t relinquished control, an essential part of the second criteria for gift giving, delivery. When Sandra became the Estate Trustee, it was too late to “perfect” an incomplete gift unless there was clear and compelling evidence that Mr. Poole had intended it to be completed. The Court found there wasn’t.
The Result: Gift Denied, Estate Preserved
The Court sided with our client and ruled that the gift was invalid. The $400,000 was returned to Mr. Poole’s Estate, where it could be properly distributed according to his Will to the named beneficiaries.
Why This Matters for You
This case is a perfect example of why inter vivos gifts can be tricky, and why good intentions aren’t enough. Even when there’s no question of mental capacity or undue influence, a gift can still fail if:
- The intention isn’t clearly documented;
- The gift isn’t actually delivered; or
- The recipient cannot prove all three legal elements.
If you’re considering giving a gift during your lifetime, or if you’re an executor or beneficiary navigating a similar situation, don’t go it alone. A lawyer can help ensure intentions are clear and legally binding.
Planning a gift or managing an estate?
Not only are our experienced estate lawyers able to help you plan with clarity and confidence, but our skilled litigation team is also ready to support you if you believe a loved one’s assets were wrongfully taken. Whether you’re planning ahead or facing a dispute, we’re here to protect your interests every step of the way. Contact us today to schedule a consultation and protect your legacy.