Forgiveness of debt in contemplation of death not valid, appeals court
Gifts in contemplation of death can be valid without a will, but they
must be properly delivered. In this case, the “delivery”
requirement defeated the gift of debt forgiveness.
By org jforward wisbar Joe Forward, Legal Writer,
State Bar of Wisconsin
Jan. 26, 2012 – A dying man's wish to forgive several debts
cannot be granted, a state appeals court has ruled.
Eighty-eight year old Roger Hansen was in the process of making a will,
but died shortly before signing the last draft, leaving various heirs as
takers under intestate succession laws. During his life, Hansen made
several mortgage loans totaling $278,000 to three nieces and a
The mortgage notes were included in Hansen’s estate. However, the
debtors argued that Hansen forgave the debts prior to his death as
evidenced by early drafts of his will and a letter to his attorney. A
great niece, the daughter of another sibling (deceased), disagreed.
The Dane County Circuit Court ruled that affidavits evidencing
Hansen’s intention to forgive the mortgage loan debts were
sufficient to establish a gift in contemplation of death (gift causa mortis), and allowed removal of the
debts from the estate.
But in Meegan v. Netzer, 2011AP325 (Jan. 26, 2012), the District IV
Wisconsin Court of Appeals reversed, concluding the requirements to
establish a gift causa mortis were
“We recognize that on this record it is undisputed that Hansen
intended that, upon his death, the debts owed him by [his
brother’s] daughters and grandson would be forgiven,” wrote
appeals court Judge Margaret Vergeront.
“It is unfortunate for the debtors that he died before his will to
this effect was validly executed.”
The appeals court explained that a gift in contemplation of death is an
exception to the rule that testamentary dispositions must comply with
statutory requirements establishing a will.
Gifts in contemplation of death are valid, the court explained,
when a donor intends to make a gift effective at death, the donor is
contemplating death from an ailment and later dies from that ailment,
and the gift is “delivered.” Here, the gift was
forgiveness of debt.
The debtors claimed “delivery” occurred when Hansen made
notations on a draft will and sent a letter to his attorney, stating
that the debts should be cleared and forgiven at death.
However, the appeals court ruled that “delivery” did not
occur because Hansen had not instructed the attorney to deliver the
writings to the debtors.
“Hansen’s purpose for giving his attorney these writings
was so that his attorney could include provisions to this effect in his
will. There is no factual basis for asserting that Hansen’s
attorney held these writings in trust for the debtors,” Judge
“Thus, the delivery to the attorney, with no instruction for
delivery to any debtors, does not constitute delivery to any debtors.”