Experts and bar leaders tell Judiciary committee Vermont should modernize disclaimer law, remove rigid nine‑month rule

The Judiciary committee heard testimony April 1 on S179, the Uniform Disclaimer of Property Interest Act, with practitioners saying the draft will modernize state law on disclaimers and reduce avoidable probate and title disputes.

Mark Langon, head of the trust and estates department at the Deny Law Firm in Burlington and chair of the Vermont Bar Association’s probate and trust law section, said the bill’s central change is to remove the state-level constraint that kept disclaimers strictly to a nine‑month window. "The first and most important thing this thing does is say you're not confined to 9 months," Langon said, adding that federal tax rules still matter for IRS purposes but should not prevent a person from disclaiming a property interest under state law.

Langon reviewed key provisions in the draft, including a broadened scope that treats disclaimers of both property interests and powers (such as powers of appointment), allows partial or term-limited disclaimers, and clarifies who may disclaim (individuals, parents for minor children absent a conflict, trustees, appointees and charities). He also explained delivery and recording rules tailored to asset types: disclaimers for real estate must be recorded to protect title, beneficiary forms may be delivered to custodians, and electronic communications and signatures are recognized in the draft as valid means of writing and delivery.

Committee members probed practical issues. Langon and other witnesses flagged how existing timelines can start decades before an heir learns of an interest — for example, when a trust becomes irrevocable on a first spouse’s death — and gave trust examples showing heirs who learn late could be precluded from disclaiming under the old rule. Langon also discussed how enhanced life‑estate deeds and Medicaid planning interact with the timing of when an interest becomes irrevocable and therefore when disclaimers may be effective.

Practitioners said the bill was drafted to be largely consistent with the Uniform Law Commission model while allowing Vermont‑specific comments and limited changes. Langon said the draft would repeal the current statute and become effective on passage unless the Legislature specifies otherwise.

Matt Getty, a Rutland lawyer who chaired the VBA study committee on the bill, described practitioner experience that motivated the changes, including a client case in which an attorney filed an assetless probate solely to ensure state delivery requirements for a tax‑qualified disclaimer were satisfied. "This bill is revenue neutral for the state of Vermont," Getty said, noting that federal gift‑tax rules still control tax consequences but do not change the state law question of whether a disclaimer may be effective.

Bob Palini, speaking for the Vermont Bar Association, said the VBA supports the bill and noted that the Senate has already acted on a version of the measure.

Witnesses and members discussed implementation details for probate courts (notice and decree-of-distribution practices) and whether judges needed training; presenters said existing probate procedures would accommodate the changes and that notice requirements ensure courts see disclaimers before final distribution. No formal motion or committee vote occurred at the session; the committee recessed and planned to take up the next agenda item (S203) after a break.

The committee packet and witnesses’ red‑line comparisons to the uniform model remain available to members; proponents asked the committee to consider the bill as a tool to reduce title uncertainty and avoid unnecessary probate filings while preserving the federal tax regime that governs whether a disclaimer is tax‑qualified.