Deed Transferring Real Property into Living Trust - Vermont

This instrument prepared by:
[____________________________________]
[____________________________________]
[____________________________________]

After recording return to:
[____________________________________]
[____________________________________]
[____________________________________]

Send subsequent tax bills to:
[____________________________________]
[____________________________________]

Town / SPAN Parcel No.: [____________]

SPACE ABOVE THIS LINE RESERVED FOR TOWN CLERK RECORDING STAMP

WARRANTY DEED — TRANSFER TO REVOCABLE LIVING TRUST

State of Vermont

1. GRANTOR

[GRANTOR FULL LEGAL NAME], [a single person / [GRANTOR FULL LEGAL NAME] and [SPOUSE FULL LEGAL NAME], [spouses / husband and wife], as tenants by the entirety], of [TOWN], [____________] County, Vermont, whose mailing address is [____________________________________] ("Grantor").

2. GRANTEE / VESTING IN TRUSTEE

[GRANTOR FULL LEGAL NAME], as Trustee of the [TRUST NAME] dated [__/__/____], and any successor trustee then serving under that trust instrument and any amendments to it (collectively, "Grantee" or the "Trustee"), whose mailing address is [____________________________________].

The Property is conveyed to the Trustee to hold, manage, and distribute according to the terms of the [TRUST NAME] dated [__/__/____] (the "Trust"). Title vests in the Trustee, in trust, and in any successor trustee without the necessity of any further conveyance, subject to the powers and authority granted to the Trustee under the Trust and under the Vermont Trust Code, 14A V.S.A. § 101 et seq.

3. CONSIDERATION

This conveyance is made for estate-planning purposes only, with no change in beneficial ownership of the Property and without consideration. The Grantor is the settlor and a beneficiary of the Trust during the Grantor's lifetime. No sale, purchase, or exchange has occurred. A nominal recital of One and No/100 Dollars ($1.00) is stated solely to satisfy the form of a deed.

4. GRANTING CLAUSE

KNOW ALL PERSONS BY THESE PRESENTS, that the Grantor, in consideration of the matters stated above, by these presents does GIVE, GRANT, BARGAIN, SELL, CONVEY, and CONFIRM unto the Grantee, as Trustee as aforesaid, and to the Grantee's successors in trust and assigns, the following described real property situated in the Town of [____________], County of [____________], State of Vermont (the "Property"):

Property commonly known as: [STREET ADDRESS, TOWN, VERMONT, ZIP]

Legal Description: See Exhibit A attached hereto and incorporated by reference.

TO HAVE AND TO HOLD the Property, with all the privileges and appurtenances thereof, unto the Grantee, as Trustee, and the Grantee's successors in trust and assigns, to their own use and behoof forever. And the Grantor, for the Grantor and the Grantor's heirs, executors, and administrators, does COVENANT with the Grantee that until the delivery of these presents the Grantor is the lawful owner of the Property and has good right and title to convey it; that it is free from every encumbrance except as stated in Section 5; and that the Grantor and the Grantor's heirs will WARRANT AND DEFEND the Property against all lawful claims whatsoever, subject to Section 5.

5. SUBJECT TO

This conveyance is made subject to:

(a) Municipal property taxes and assessments for the current and subsequent years, not yet due and payable;
(b) Easements, covenants, conditions, restrictions, reservations, and rights-of-way of record;
(c) Applicable zoning, subdivision, Act 250 (10 V.S.A. ch. 151), current-use enrollment (32 V.S.A. ch. 124), and environmental laws and regulations; and
(d) Any mortgage or other lien of record, which the Trustee takes subject to but does not assume except as separately agreed in writing.

6. PURPOSE; CURRENT-USE AND TITLE-INSURANCE CONTINUITY

6.1 Estate-planning purpose. The sole purpose of this conveyance is to fund the Grantor's revocable living trust so that the Property may pass on the Grantor's death under the terms of the Trust without probate administration and may be managed during any incapacity of the Grantor. The Grantor reserves all rights to amend or revoke the Trust and to direct the Trustee to reconvey the Property to the Grantor at any time.

6.2 Current use / homestead declaration continuity. The parties intend that any current-use (Use Value Appraisal) enrollment, homestead declaration (filed annually with the Vermont Department of Taxes), or other tax classification applicable to the Property continue uninterrupted following this conveyance. The Grantor should confirm with the Department of Taxes and the town Lister that current-use and homestead treatment are preserved after re-titling and re-file any required declaration. The Property Transfer Tax Return (Form PTT-172) requires a current-use / Act 250 disclosure (see Section 10).

6.3 Title insurance. Re-titling into a trust can affect an existing owner's title-insurance policy. The Grantor should request an endorsement naming the Trustee as an insured, or confirm coverage continuity, with the title insurer before recording.

7. PROPERTY TRANSFER TAX EXEMPTION AND GARN-ST GERMAIN (DUE-ON-SALE) RECITALS

7.1 Vermont Property Transfer Tax — exemption (32 V.S.A. §§ 9602, 9603). Vermont imposes a Property Transfer Tax on the transfer by deed of title to real property (32 V.S.A. § 9602). This conveyance into the Grantor's own revocable living trust is made without consideration and effects no change in beneficial ownership; it is therefore EXEMPT under 32 V.S.A. § 9603(5) (transfers in trust to the extent of the benefit to the donor) and/or § 9603(6) (a transfer to effectuate a mere change of identity or form of ownership where there is no change in beneficial ownership). The applicable exemption code is stated on the Property Transfer Tax Return (Form PTT-172).

IMPORTANT — A TRANSFER RETURN IS STILL REQUIRED. Even though this transfer is exempt from the tax, a Property Transfer Tax Return (Form PTT-172) MUST be completed and filed with the town clerk for this deed. Under 32 V.S.A. §§ 9606 and 9608, the town clerk may not record the deed without an accompanying transfer return. Vermont now files the return electronically through myVTax; the town clerk records the return with the deed. Confirm the exemption code and complete the return before presenting the deed for recording. See Section 10.

7.2 No due-on-sale acceleration (Garn-St Germain Act). If the Property is encumbered by a mortgage containing a due-on-sale clause, 12 U.S.C. § 1701j-3(d)(8) bars a lender from exercising that clause upon "a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property," for the residential property described in subsection (d). If every federal condition is met, the lender may not accelerate solely because of this transfer; the transfer does not otherwise modify the loan, and the Grantor remains personally liable on any existing note.

8. EXECUTION

IN WITNESS WHEREOF, the Grantor has executed this deed on [__/__/____].

GRANTOR:

____________________________________
[GRANTOR FULL LEGAL NAME]

____________________________________
[SPOUSE FULL LEGAL NAME] (if the Property is held by both spouses or to release any marital/homestead interest)

9. NOTARY ACKNOWLEDGMENT (Vermont)

STATE OF VERMONT )
) ss.
COUNTY OF [____________] )

At [TOWN], in said County, on this ____ day of ______________, 20____, [GRANTOR FULL LEGAL NAME] [and [SPOUSE FULL LEGAL NAME]] personally appeared and acknowledged the foregoing instrument, by him/her/them signed and sealed, to be his/her/their free act and deed, before me.

____________________________________
Notary Public, State of Vermont
Printed name: ______________________
Commission No.: ____________________
My commission expires: ______________

(Affix notarial seal)

10. RECORDING AND PROPERTY-TRANSFER-TAX-RETURN INSTRUCTIONS

1. Where to record. Record the original, signed, and acknowledged deed in the office of the Town Clerk of the Town of [____________], Vermont — the town in which the Property is located (27 V.S.A. §§ 342, 348). Vermont records by TOWN, not by county.
2. Property Transfer Tax Return (Form PTT-172) — MANDATORY (32 V.S.A. §§ 9606, 9608). Complete and file a Property Transfer Tax Return with the deed, even though the transfer is exempt. File electronically through myVTax (paper PTT-172 is permitted only for filers submitting fewer than five returns per year). On the return: (a) report the property value; (b) enter the exemption code citing 32 V.S.A. § 9603(5) and/or § 9603(6); and (c) complete the Act 250 disclosure and the current-use (Use Value Appraisal) disclosure. The town clerk may not record the deed without the return.
3. Tax payment. No Property Transfer Tax is due on an exempt transfer; if any tax were due, it is payable within 30 days of closing (Form PTT-173 payment voucher).
4. No witness required. A notarial acknowledgment is sufficient; subscribing witnesses are optional.
5. Update collateral records. After recording, (a) obtain written instructions from the property/casualty insurer on how the owner, Trustee, Trust, and lender should appear on the policy; (b) confirm homestead declaration and current-use enrollment with the Department of Taxes and town Lister; (c) provide a recorded copy and a Certification of Trust (14A V.S.A. § 1013) to the title company; and (d) record this deed before, not after, any closing on a sale or refinance.

EXHIBIT A — LEGAL DESCRIPTION

[INSERT THE COMPLETE LEGAL DESCRIPTION EXACTLY AS IT APPEARS ON THE GRANTOR'S CURRENT VESTING DEED — Vermont deeds customarily describe the property by reference to the prior deed (grantor, book, and page in the town land records) and by metes-and-bounds or lot/parcel. Include the SPAN/parcel number. Recite the source-of-title (being the same land conveyed to the Grantor by deed of [GRANTOR] dated [__/__/____], recorded in Book [____], Page [____] of the [TOWN] Land Records). Attach surveys or additional pages as needed.]

____________________________________

____________________________________

____________________________________

Sources and References

• 27 V.S.A. § 341 — conveyances of land must be in writing, signed, and acknowledged.
• 27 V.S.A. §§ 342, 348 — recording of deeds in the town clerk's office; effect as notice.
• 32 V.S.A. § 9602 — Vermont Property Transfer Tax on transfers by deed of title to real property.
• 32 V.S.A. § 9603 — exemptions; subd. (5) transfers in trust to the extent of the benefit to the donor; subd. (6) mere change of identity or form of ownership with no change in beneficial ownership.
• 32 V.S.A. § 9606 — Property Transfer Tax Return (Form PTT-172) required for transfers by deed.
• 32 V.S.A. § 9608 — town clerk may not record a deed without an accompanying transfer return.
• 10 V.S.A. ch. 151 (Act 250); 32 V.S.A. ch. 124 (current use / Use Value Appraisal) — Act 250 and current-use disclosures on the transfer return.
• 14A V.S.A. § 101 et seq. — Vermont Trust Code; § 1013 (certification of trust).
• 12 U.S.C. § 1701j-3(d)(8) — limited due-on-sale protection when every residential-property, continuing-beneficiary, and occupancy-right condition is met.
• Vermont Department of Taxes — Property Transfer Tax and Form PTT-172 (tax.vermont.gov/property/property-transfer-tax); filing via myVTax.

This document is provided for informational purposes only and does not constitute legal advice. A Property Transfer Tax Return (Form PTT-172) must be filed with the town clerk even when the transfer is exempt. Consult a licensed Vermont attorney before executing or recording this deed.