Introduced by Representatives Jewett of Ripton and Flory of Pittsford

BILL AS INTRODUCEDH.569

2004Page 1

H.569

Referred to Committee on

Date:

Subject:Property; joint tenancy; tax prorations; trusts and estates; witness requirements

Statement of purpose: This bill proposes to make the following changes or additions to real property statutes: to permit joint tenants to hold title with different percentage interests; to clarify the procedure for tax proration on the purchase and sale of real estate unless the parties agree otherwise; to clarify that a conveyance which designates a trust or estate as the grantee is effective to transfer property in the same manner as a conveyance which designates a trustee of a trust or a personal representative of an estate as the grantee; to establish a certificate of trust and an affidavit of trustee in real property transaction; and to eliminate the requirement that a deed or other conveyance of land be signed by a witness.

AN ACT RELATING TO REAL PROPERTY

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. 27 V.S.A. § 5 is added to read:

§ 5. JOINT TENANCY IN FEE SIMPLE WITH SURVIVORSHIP IN

EQUAL OR UNEQUAL SHARES

(a) A conveyance of real estate or any interest therein by deed or will or other instrument of conveyance to two or more persons in such form that the conveyance runs to the grantees or devisees as joint tenants in fee simple with right of survivorship, or which by virtue of the language of such conveyance has the effect of conveying to the grantees as joint tenants in fee simple with right of survivorship, may convey interests to the grantees in equal or unequal shares.

(b) Unless the instrument contains language indicating a contrary intent:

(1) A conveyance to joint tenants in fee simple with right of survivorship, or a conveyance which has the effect of conveying to joint tenants in fee simple with right of survivorship, shall be presumed to convey interests in equal shares.

(2) Upon the death of a tenant, the deceased tenant’s interest shall be divided among the surviving tenants in proportion to their respective interests at the time of the tenant’s death.

Sec. 2. 27 V.S.A. § 309(a) is amended to read:

(a) Unless otherwise expressly stated or agreed, in any offer of sale or purchase, or contract for the purchase and sale of real property, it shall be presumed that real property taxes assessed and payable during a municipality’s fiscal year in which the transfer occurs shall be prorated as follows so that as between the parties, but not otherwise:

(1) In municipalities where the municipal tax and the school tax fiscal periods are July 1 to June 30, the seller shall bear the burden of real estate taxes allocable to the period beginning with the first day July 1 of that fiscal year and ending on the day before closing. The buyer shall bear the burden of real estate taxes allocable to the period beginning with the day of closing and ending on the last day of that fiscal year June 30.

(2) In municipalities where the municipal tax fiscal period is other than July 1 to June 30, the seller shall bear the burden of real estate taxes allocable to municipal taxes for the period beginning on the first day of the municipality’s fiscal year and ending on the day before closing. The seller shall also bear the burden for real estate taxes allocable to school taxes for the period beginning July 1 of that fiscal year and ending on the day before closing. The buyer shall bear the burden of real estate taxes allocable to both school and municipal taxes for the period beginning with the day of closing and ending with the last day of the respective fiscal year.

Sec. 3. 27 V.S.A. § 351 is added to read:

§ 351. Estates and trusts; conveyances, satisfactions,

grants, and releases

(a) A conveyance or grant of an interest in real or personal property made to the estate of a decedent, to the estate of a ward or conservatee, to the ward’s or conservatee’s guardian or conservator, or to a trust, including a trust in the form of a pension or profit-sharing plan, that names the estate, the guardian, the conservator, or the trust as the grantee of the interest is a valid and effective conveyance or grant to the personal representative, to the ward or conservatee, or to the trustee of the trust, in like manner and effect as if the personal representative, ward, conservatee, or trustee had been named the grantee of the conveyance or grant.

(b) A discharge, mortgage discharge, release, conveyance, grant, or satisfaction of an interest in real or personal property that is made by an estate, a guardian, a conservator, or a trust described in subsection (a) of this section, that names the estate, the guardian, the conservator, or the trust as the holder or grantor of the interest, and that is executed by the personal representative, ward, conservatee, or trustee authorized to execute the instrument, is a valid and effective satisfaction, release, conveyance, or grant of the interest, in like manner and effect as if the personal representative, guardian, conservator, or trustee had been named the holder or the grantor in the satisfaction, release, conveyance, or grant.

(c) This section applies to past and future conveyances, grants, mortgage discharges, satisfactions, and releases. However, if a notice of the pendency of an action or proceeding contesting the validity of such a document is recorded or filed before January 1, 2004 in the land records of the municipality in which the real property affected by the action or proceeding is located, this section does not affect such action or proceeding.

(d) This section is effective upon date of passage and applies to trust instruments whenever created or executed.

Sec. 4. 27 V.S.A. § 352 is added to read:

§ 352. Certificate of trust

(a) The settlor, grantor, or trustee of a trust, at any time after execution or creation of a trust, may execute a certificate of trust that sets forth less than all of the provisions of a trust instrument and any amendments to the instrument. The certificate of trust may be used for purposes of selling, conveying, pledging, mortgaging, leasing, or transferring title to any interest in real or personal property. The certificate of trust must be upon the representation of the settlors, grantors, or trustees that the statements contained in the certificate of trust are true and correct and that there are no other provisions in the trust instrument or amendments to it that limit the powers of the trustees to sell, convey, pledge, mortgage, lease, or transfer title to interests in real or personal property. The signature of the grantors or trustees must be under oath before a notary public or other official authorized to administer oaths. The certificate of trust must include:

(1) the name of the trust, if one is given;

(2) the date of the trust instrument;

(3) the name of each grantor;

(4) the name of each original trustee;

(5) the name and address of each trustee empowered to act under the trust instrument at the time of execution of the certificate;

(6) the following statement: “The trustees are authorized by the instrument to sell, convey, pledge, mortgage, lease, or transfer title to any interest in real or personal property, except as limited by the following: (if none, so indicate)”; and

(7) a statement as to whether the trust instrument has terminated or been revoked.

(b) A certificate of trust executed under subsection (a) of this section may be recorded in the land records of the municipality where the land described in the certificate of trust or any attachment to it is situated. When it is so recorded or filed, or in the case of personal property, when it is presented to a third party, the certificate of trust serves to document the existence of the trust, the identity of the trustees, the powers of the trustees and any limitations on those powers, and other matters the certificate of trust sets out, as though the full trust instrument had been recorded, filed, or presented. Until amended or revoked under subsection (c) of this section, or until the full trust instrument is recorded, filed, or presented, a certificate of trust is prima facie proof as to the matters contained in it and any party may rely upon the continued effectiveness of the certificate.

(c) Amendment or revocation of a certificate of trust may be made only by a written instrument executed by the settlor, grantor, or trustee of a trust. Amendment or revocation of a certificate of trust is not effective as to a party unless that party has actual notice of the amendment or revocation.

For purposes of this subsection, “actual notice” means that a written instrument of amendment or revocation has been received by the party or, in the case of real property, that either a written instrument of amendment or revocation has been received by the party or that a written instrument of amendment or revocation containing the legal description of the real property has been recorded in the municipal land records where the real property is situated.

(d) This section is effective upon the date of passage and applies to trust instruments whenever created or executed.

Sec. 5. 27 V.S.A. § 353 is added to read:

§ 353. Affidavit of trustee in real property transactions

(a) Form of affidavit for inter vivos trust. An affidavit of a trustee or of trustees of an inter vivos trust in support of a real property transaction may be substantially in the following form:

TRUSTEE AFFIDAVIT

The undersigned intend(s) to convey title to property identified as ______located in ______, Vermont. In order to facilitate that transfer, the undersigned make(s) the following representations under oath upon information and belief:

1. I am the sole Trustee or sole Successor Trustee OR (we are all of the Trustees or Successor Trustees) of the ______Trust dated ______, ______.

2. I am OR (we are) authorized to convey the herein described real estate pursuant to Article _____ of the Trust which provides in pertinent part as follows:

[quote language from Trust authorizing the conveyance].

3. Neither the authorizing provisions of the Trust agreement nor the Trust agreement itself has been revoked or amended to limit the power of a Trustee or Trustees to convey the real property. I OR (we) do not have actual knowledge of any facts indicating that the Trust is invalid.

4. There are no provisions in the Trust agreement which limit my OR (our) authority to freely convey title to the property referenced above.

5. The Trust is not supervised by any Court.

-OR-

5. The Trust is supervised by the ______Court of _____ County, State of ______. All necessary approval has been obtained from the court for the Trustee(s) to undertake the actions authorized in paragraph 2.

These representations are made this ______day of ______, ______.

______

Trustee

STATE OF VERMONT

______COUNTY, SS.

At ______in said County, ______and ______personally appeared and stated that the foregoing was his/her/their free act and deed and the information contained was true to his/her/their best knowledge and belief.

Before me, ______

Notary Public

Commission expires: ______

(b) Form of affidavit for testamentary trust. An affidavit of a trustee or of trustees of a testamentary trust in support of a real property transaction may be substantially in the following form:

TRUSTEE AFFIDAVIT

______being first duly sworn on oath says that:

1. The ______Trust was created by the Last Will and Testament of ______, Decedent, dated ______, ______. Decedent died on the ______day of ______. Affiant, as trustee of the Trust, acquired by instrument or decree dated ______, recorded OR (to be recorded) in the land records of the Town/City of ______an interest in real property in ______County, Vermont, legally described as follows:

(If more space is needed, continue on back or on an attachment.)

2. The name(s) of the trustee(s) empowered by the terms of decedent’s will to act at the time of the execution of this Affidavit are as follows:

______

3. The trustee(s) who will execute instruments relating to the real property described above:

(a) are empowered by the provisions of the trust under decedent’s will to sell, convey, pledge, mortgage, lease, or transfer title to any interest in real property held in trust; and

(b) are the requisite number of trustees required by the provisions of the will to execute and deliver such an instrument.

4. The Trust has not terminated and has not been revoked.

- OR -

4. The Trust has terminated (or has been revoked). The execution and delivery of the deed will be made pursuant to the provisions of the Trust.

5. There has been no amendment to the Trust which limits the powers of the trustee(s) to execute and deliver documents to accomplish the purposes described in paragraph 3(a).

6. The Trust is not supervised by any court.

- OR -

6. The Trust is supervised by the _____ Court of _____ County. ____. All necessary approval has been obtained from the court for the trustee(s) to execute and deliver instruments necessary to accomplish the purposes described in paragraph 3(a).

7. Affiant does not have actual knowledge of any facts indicating that the Trust is invalid.

______

Trustee

STATE OF VERMONT

______COUNTY, SS.

Before me, ______

Notary Public

Commission expires: ______

(c) Except as to a party dealing directly with the trustee or trustees who has actual knowledge of facts to the contrary, an affidavit by the trustee or trustees under subsection (a) or (b) of this section is conclusive proof that:

1. the trust described in the affidavit is a valid trust;

2. either the trust has not terminated or been revoked or, if the trust has terminated or been revoked, the conveyance described in the affidavit is made pursuant to the provisions of the trust;

3. the powers granted the trustee or trustees extend to the real property described in the affidavit or attachment to the affidavit;

4. no amendment to the trust has been made limiting the power of the trustee or trustees to sell, convey, pledge, mortgage, lease, or transfer title to the real property described in the affidavit or attachment to the affidavit, if any;

5. the requisite number of trustees have executed and delivered the instrument of conveyance described in the affidavit; and

6. any necessary court approval of the transaction has been obtained.

(d) An Affidavit of Trustee or Trustees created under subsection (a) and (b) of this section, or in the Certificate of Trust or Trust Instrument referred to in the affidavit may be recorded in the land records of the municipality where the land described in the affidavit is situated and may be recorded or filed as a separate document or combined with or attached to an original or certified copy of a Certificate of Trust or Trust Instrument, and recorded or filed as one document.

(e) This section is effective upon date of passage and applies to trust instruments whenever created or executed.

Sec. 6. 27 V.S.A. § 341(a) is amended to read:

§ 341. REQUIREMENTS GENERALLY; RECORDING

(a) Deeds and other conveyances of lands, or of an estate or interest therein, shall be signed by the party granting the same and signed by one or more witnesses and acknowledged by the grantor before a town clerk, notary public, master, county clerk, or judge or register of probate and recorded at length in the clerk’s office of the town in which such lands lie. Such acknowledgment before a notary public shall be valid without an official seal being affixed to his or her signature.

Sec. 7. EFFECTIVE DATE AND APPLICABILITY

(a) Sec. 6 of this act shall take effect upon passage.

(b) Sec. 6 of this act shall apply retroactively to all deeds or other conveyances of lands or of an estate or interest therein that were signed or executed, whether directly by the grantor or by virtue of a power of attorney, prior to the effective date of this act; provided that this section shall not be construed to apply to any such document the validity of which is being contested in a suit begun or pending before a court or which has been invalidated by a court for lack of a signature of a witness prior to the effective date of this act.