Senate amends uniform disclaimer bill to remove nine‑month deadline; senators seek tax analysis

The Vermont Senate on Friday took up S179, a committee‑recommended rewrite of the state’s uniform disclaimer of property interests act that would modernize how beneficiaries and trustees can disclaim inherited property.

Sen. Matoss, reporting for the Judiciary Committee, told the chamber the bill removes the current nine‑month deadline that beneficiaries must meet to disclaim an interest and would instead allow an indefinite period to assess tax consequences before deciding. The committee also recommends allowing trustees and institutional entities to disclaim, permitting advance disclaimers, enabling partial disclaimers of some interests, and clarifying that a disclaimer does not create a property transfer tax because title was never taken.

Why it matters: Under current statute, a beneficiary generally must disclaim within nine months of the interest arising. The bill’s sponsors say that requirement can create harsh tax consequences for high‑value estates or for individuals who need more time to evaluate retirement accounts and other nonreal‑property assets; the committee said modern federal gift and estate thresholds motivated the update.

Tax and timing questions: A senator from Addison pressed the committee reporter on whether the committee heard testimony about revenue impacts or whether the change could create a tax‑avoidance loophole. The reporter said finance had been asked to review the matter but the committee did not receive a definitive answer and offered to return with more detail at third reading. Senators suggested the committee consider a fixed extension (for example, two years) rather than an indefinite period; reporters and sponsors said they would revisit the timing language before third reading.

Floor action: The Senate adopted the Judiciary Committee’s recommendation to amend the bill and ordered S179 to third reading. The committee reported its internal vote as "on a vote of 4‑0‑1." Sponsors said the bill would become effective upon passage and that committee witnesses included representatives from legislative counsel, the Vermont Bar Association, probate practitioners and a practicing attorney in the field.

Next steps: Committee sponsors will provide additional information at third reading addressing the precise statutory location of the nine‑month removal and any recommended timing language or fiscal analysis.