Hi, I hope someone might be able to help me regarding an incomplete gift query.
The deceased made substantial gifts 7 years prior to his death (circa £1,000,000). A week before he died, he wrote a cheque for £10,000 to a friend, however, the bank did not accept the signature on the cheque and the £10,000 remains in his account.
I have been told by a family member (who also confirmed that it was a gift) that the recipient of the gift is aware of his death but has not mentioned the cheque. I have not personally been in contact with the recipient and I am unaware of any special circumstances surrounding the gift or if the recipient may have relied on receiving the gift to their detriment.
I was wondering if anyone could advise on the status of the gift please or could point me in the right direction? Thank you
I was looking at this (in a slightly different slant - cheque cashed after death), but Re Beaumont is the case and there is a thread on here about gifts and cheques “uncashed cheques prior to death”
Until a cheque clears, it can be revoked. However, the bank may still go ahead and clear the cheque (which is usually what happens if the cheque is presented promptly, as the bank may not be notified in time).
If that cheque was a gift, the gift fails and the funds must be returned to the PRs. However, the beneficiaries of the estate (usually the residuary beneficiaries) could agree that the PRs should not demand the money back. If the relevant beneficiaries do not agree to this, then the PRs ought to recover the funds (unless doing so would clearly cost the estate more than the amount they are trying to recover).
If the cheque was issued for money/money’s worth, then potentially the funds could be kept by the recipient in settlement of whatever debt it is for (commonly a cheque written for gardening, housework and such like carried out by the payee of the cheque, although it could be for the repayment of money borrowed by the payer), but the position may be different in an insolvent estate scenario.
If the cheque did not clear at all (as is the case here), then not only did the gift fail, but the payee has not got the funds. For a gift not to fail, it would have to have been effected by deed - unlikely to be the case here.
Butterworths Wills Probate & Administration Service had a useful note about cheques. One useful case is Curnock (personal representative of Curnock, deceased) v IRC [2003] STC (SCD) 283).
Provided that the donor has done all they can to perfect the gift, the gift may be treated as “complete”.
Re Rose, Midland Bank Executor and Trustee Co. v. Rose [1949] Ch. 78 is often cited in support of this, as more recently has been Pennington v. Waine [2002] EWCA Civ. 227 (although the later relates to a gift of shares).
Both judgments could be worth a read.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals