Bill > S0003

This bill amends Vermont's trust law to provide specific protections for property held in tenants by the entirety trusts, which are special trusts designed for married couples. The bill clarifies that property transferred from a tenancy by the entirety (a form of property ownership that protects assets from individual creditors) to a jointly or separately held revocable or irrevocable trust can maintain its creditor protection, provided certain conditions are met. These conditions include the spouses being married to each other, the property remaining in the trust or being held as tenants by the entirety, and both spouses being current beneficiaries of the trust(s). The bill specifies that such property will have the same immunity from separate creditors as it would if held outside the trust, and will be treated as tenants by the entirety property for all legal purposes, including bankruptcy. The creditor protection ceases if the marriage is dissolved by a court. Importantly, these provisions apply retroactively to all trusts and property transfers, regardless of when they were created, and will apply to all judicial proceedings concerning trusts commenced on or after the effective date. The act takes effect immediately upon passage.

Budget and Finance, Justice

https://legislature.vermont.gov/bill/status/2026/S.3