Transfer-on-Death Deed

TRANSFER-ON-DEATH DEED — VERMONT

!! IMPORTANT: TOD DEEDS FOR REAL PROPERTY ARE NOT AUTHORIZED IN VERMONT !!

TABLE OF CONTENTS

1. Notice Regarding TOD Deed Unavailability
2. Current Vermont Law
3. Vermont Enhanced Life Estate Deed (Lady Bird Deed)
4. Other Available Alternatives
5. Comparison of Alternatives
6. Recommended Next Steps
7. Sources and References

1. NOTICE REGARDING TOD DEED UNAVAILABILITY {#1-notice}

However, Vermont enacted the Enhanced Life Estate Deed Act (27 V.S.A. Chapter 6) effective July 13, 2020, which provides a similar nonprobate transfer mechanism through an enhanced life estate deed (commonly known as a "Lady Bird deed").

2. CURRENT VERMONT LAW {#2-current-law}

2.1 Enhanced Life Estate Deed Act

Vermont's Enhanced Life Estate Deed (ELED) Act, codified at 27 V.S.A. Chapter 6, provides the closest statutory equivalent to a TOD deed. The ELED allows property owners to:

• Retain a life estate with full control over the property during their lifetime
• Name a remainder beneficiary who receives the property at the owner's death
• Retain the power to revoke, revise, sell, mortgage, or otherwise dispose of the property without the remainderman's consent

2.2 TOD Designations for Securities Only

Vermont permits TOD designations for securities and financial accounts under 9 V.S.A. Chapter 134 (Uniform TOD Security Registration Act). This statute does not apply to real property.

3. VERMONT ENHANCED LIFE ESTATE DEED (LADY BIRD DEED) {#3-eled}

3.1 Key Features

• ☐ Grantor retains a life estate with enhanced powers (right to sell, mortgage, lease, revoke)
• ☐ Remainder interest passes to the named remainderman at the grantor's death
• ☐ Property transfers without probate
• ☐ Grantor retains full control during lifetime — no consent from remainderman needed
• ☐ Revocable — grantor may revoke or revise the deed at any time
• ☐ A mortgage by the life tenant does not revoke the deed
• ☐ Must be executed, acknowledged, and recorded in the town land records

3.2 Statutory Basis

• 27 V.S.A. § 651 — Definitions
• 27 V.S.A. § 652 — Creation of enhanced life estate deed
• 27 V.S.A. § 653 — Powers retained by grantor
• 27 V.S.A. § 654 — Revocation and revision
• 27 V.S.A. § 655 — Effect of mortgage
• 27 V.S.A. § 656 — Optional statutory form

3.3 How It Differs from a TOD Deed

3.4 Important Considerations

• ☐ Property transfer tax may apply at the time of recording
• ☐ The deed must comply with Vermont recording requirements
• ☐ Consult an attorney regarding Medicaid implications — Vermont may seek estate recovery
• ☐ The remainderman receives a stepped-up basis at the grantor's death

4. OTHER AVAILABLE ALTERNATIVES {#4-alternatives}

Alternative A: Revocable Living Trust

Key Features:

• ☐ Property is deeded to the trust during the grantor's lifetime
• ☐ Grantor serves as trustee and retains full control
• ☐ Trust terms dictate distribution at death without probate
• ☐ Fully revocable and amendable
• ☐ Provides privacy (trusts are not public record)

Alternative B: Joint Tenancy with Right of Survivorship

Key Features:

• ☐ Property passes automatically to the surviving joint tenant at death
• ☐ No probate required
• ☐ Co-owner acquires a present interest immediately
• ☐ Cannot be revoked unilaterally
• ☐ Potential gift tax and creditor exposure consequences

Alternative C: Traditional Life Estate Deed

Key Features:

• ☐ Grantor retains a life estate (right to use and occupy)
• ☐ Remainder interest vests at creation
• ☐ Generally irrevocable — unlike the Enhanced Life Estate Deed
• ☐ Remainderman's consent needed to sell or mortgage
• ☐ Not recommended when the grantor wants to retain full control

Alternative D: Transfer via Will (Probate)

Key Features:

• ☐ Property passes per the terms of the will through probate
• ☐ Subject to probate court supervision and costs
• ☐ Vermont has simplified probate procedures for smaller estates
• ☐ Will is a public document once admitted to probate

5. COMPARISON OF ALTERNATIVES {#5-comparison}

*Requires consent of co-owner or remainderman to modify.

6. RECOMMENDED NEXT STEPS {#6-next-steps}

If you are a Vermont property owner seeking to transfer real property outside of probate:

☐ Consult with a licensed Vermont estate planning attorney
☐ Consider the Enhanced Life Estate Deed as the closest alternative to a TOD deed
☐ Evaluate the property transfer tax implications of each option
☐ Review the impact on Medicaid eligibility and Vermont's estate recovery program
☐ Ensure any deed or trust instrument is properly drafted, executed, acknowledged, and recorded

7. SOURCES AND REFERENCES {#7-sources}

• 27 V.S.A. Chapter 6, §§ 651-656 (Enhanced Life Estate Deed Act)
• 9 V.S.A. Chapter 134 (Uniform TOD Security Registration Act — securities only)
• 32 V.S.A. Chapter 231 (Property Transfer Tax)
• Uniform Real Property Transfer on Death Act (not adopted in Vermont)

This template is provided for informational purposes only and does not constitute legal advice. Vermont does not authorize transfer-on-death deeds for real property. The Enhanced Life Estate Deed (Lady Bird deed) is the closest statutory alternative. Consult a licensed Vermont attorney for guidance.