Requirements for a Valid Gift - Mental Capacity
3 important questions on Requirements for a Valid Gift - Mental Capacity
What must the donor understand for him to be classed as having adequate mental capacity?
The donor must understand the nature of the transaction and its consequences.
If the donor is gifting a gift of small value, are they required to have a high degree of understanding?
No, required to have a low degree of understanding.
What level of understanding is required from a donor that if gifting a gift of higher value? What is the authority for this?
The higher the value of the gift, the higher the threshold for sufficient capacity. In Re Beaney, a mother suffering from senile dementia lacked capacity so she could not make a valid gift of her home (which was her only substantial asset) to one daughter.
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