Bill > H0023

This bill addresses the legal treatment of property owned by married spouses when transferred into a trust, specifically focusing on property held as "tenants by the entirety" (a special form of joint ownership that provides certain protections for married couples). The bill ensures that when such property is transferred into a jointly or separately held revocable or irrevocable trust, it maintains the same creditor protection it would have had if it remained directly owned by the spouses. To qualify for this protection, certain conditions must be met: the spouses must remain married, the property must be held in a trust that can be revoked by either spouse but amended only by both, and the spouses must be current beneficiaries of the trust. The bill specifies that the property will be treated as tenants by the entirety property for all legal purposes, including bankruptcy proceedings. However, this creditor immunity will cease if the spouses' marriage is dissolved by a court. Importantly, the bill applies retroactively to all trusts created before, on, or after its effective date, and to all related judicial proceedings commenced on or after the effective date.

Justice

https://legislature.vermont.gov/bill/status/2026/H.23