Senate Judiciary reviews bill to modernize Vermont's "disclaimer" rules, removing 9-month state deadline

Senate Judiciary convened Feb. 10 to hear testimony on S.179, a proposed update to Vermont's disclaimer statute that would untether state law from a nine-month timing requirement tied to federal tax treatment and add detailed procedures for disclaimers of jointly held property, trusts and other interests.

The hearing opened with the chair noting the committee had the bill in front of it but lacked a legislative council walkthrough and was missing the packet's last three pages. The committee called as its first witness Matt Geddy, an attorney in Rutland who said he chaired the Vermont Bar Association study committee that reviewed the Uniform Disclaimer Act and adapted it for Vermont.

Geddy told the committee the core change in S.179 is to remove the state-level requirement that disclaimers be made within nine months of a decedent's death. "For someone who is looking to make a tax qualified disclaimer, those folks should be looking to the tax law for guidance on how to do that," Geddy said. He added the draft is intended to be revenue neutral and to avoid conflicts between state and federal timing rules.

Geddy walked the committee through the bill section by section. The draft adds a definition for "personal representative," expands the statutory meaning of "signed" to accommodate physical limitations, and sets out clear delivery and recording rules for different asset classes. It requires that disclaimers of real-property interests be recorded to preserve land records and provides detailed rules for disclaimers by trustees, appointees and holders of powers of appointment.

On one substantive change, Geddy said the Uniform Act language adopted in the draft omits a current Vermont limitation that barred disclaimers to the extent of a lien on the property. "The uniform act didn't have any such limitation," he said, and noted that the Vermont Bankers Association had not expressed concerns when circulating the draft to the trust community, though he and the association would double-check the lien point.

Kristelia, introduced herself as president of the Vermont Bankers Association, told the committee the trust community had reviewed the draft "and responded back with no concerns about the bill." She said she would confirm the lien detail and report back to the committee.

Geddy also said that while the bill removes the state's nine-month deadline prospectively, it does not revive a previously expired right to disclaim if that nine-month period has already passed. He noted that a disclaimer that is effective for federal tax purposes will also be effective for state purposes under the draft.

The committee did not take formal action on S.179 at the hearing. Members requested a formal walkthrough from legislative council and asked staff to circulate the study committee's comments and the Uniform Law Commission materials. The chair scheduled additional witnesses, including Katie McClint at 11:30 a.m., to broaden the committee's perspective.

The hearing record contains minor transcription inconsistencies (the chair referred to the witness as "Matt Getty" while the witness stated his name as "Matt Geddy"). The committee noted those issues and the missing pages in the printed packet and said staff would provide a legislative council review and the complete bill text before further action.