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Enhanced Life Estate Deed | ELED
In Vermont a Lady Bird Deed is also known as an Enhanced Life Estate Deed [ELED]. Vermont’s common law at Title 27 of the Vermont Statutes describes the Vermont Enhanced Life Estate Deed Act enacted July 13, 2020.
Although there are variations of the Lady Bird Deed exist in other states, Vermont has been just one of six states that recognize an Enhanced Life Insurance Deed. (The 5 other states include Texas, Florida, Michigan, North Carolina, and West Virginia.)
With the common law life estate remaining intact, the main purpose of a Lady Bird Deed is to clarify some of the rights and reservations of the property owner (Grantor), settling title questions raised by Courts, lenders, and title insurance companies.
The State of Vermont has Published additional details for the Proof of Basis: If the property was acquired at the death of the donor of an Enhanced Life Estate, Lady Bird Deed, Revocable Trust, or through a non-probated estate, submit 1) an appraisal or Lister Card and 2) information verifying date of death of the donor (usually a death certificate).
The following outline recaps the highlights of previously existing Enhanced Life Estate Deed:
Lady Bird Deed
- Grantor conveys a property interest to a Grantee that takes effect upon the death of the Grantor
- Grantee acquires immediate title to property upon death of Grantor, without probate
- There is no Gift Tax return requirement, as there is no present gift
- The property receives a step-up in tax basis (for capital gains) upon the death of the Grantor
- If used as a primary residence, the property is an exempt asset for Medicaid purposes (with an equity limit of $668,000 for 2023 if no spouse resides there) AND there is no transfer penalty
- As an improvement upon existing common law, the Lady Bird Act adds the following clarifications:
- Grantor may revoke or revise the deed without consent of Grantee
- Granting of mortgage does not revoke the Lady Bird Deed
- If a sole Grantee, or a “tenant-in-common” Grantee predeceases the Grantor, that interest will pass to that Grantee’s heirs or beneficiaries in Probate
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