Vermont Attorneys Title Corporation

• Vermont Title Standards Index ›

  • 1.1 The Role of the Examining Attorney
  • 1.2 The Examining Attorney's Attitude
  • 1.3 Definition of Marketable Title
  • 1.4 Reference to Title Standards in Real Estate Sales Contract
  • 2.1 Period of Search
  • 2.2 The Concept of the Chain of Title and its Relationship of the Rule of Record Notice and the Scope of the Title Searcher's Obligation
  • 2.3 Effect of Recording Instruments Claiming an Interest in Real Estate
  • 2.4 Wild Instruments: Instruments by Strangers to the Record Chain of Title
  • 2.4A After Acquired Property
  • 2.5 Priority of Conveyances
  • 2.6 Time When a Conveyance is Considered as Properly "Recorded"
  • 2.7 Record of Expired Leases or Expired Interests
  • 4.1 Limitation on the Use by Grantor of Corrective Deeds
  • 6.1 Grantors
  • 6.2 Majority
  • 6.3 Mental Capacity
  • 6.4 Marital Interests
  • 6.5 Powers of Attorney
  • 7.1 Grantees
  • 8.1 Name Variances
  • 9.1 Execution, Witnessing and Acknowledgement
  • 11.1 Delivery
  • 13.1 Conveyance by Heirs' Deed
  • 13.2 Conveyance by Devisees in Lieu of Probate Administration
  • 13.3 Omitted Real Estate or Faulty Description of Closed Estate
  • 13.4 Conveyance by Trustee of a Non-Probate Trust
  • 14.1 Conveyance to Two or More Persons
  • 15.1 Deeds Retaining Life Estates With Reserved Powers
  • 18.1 Federal Special Gift Tax Lien
  • 18.2 Irregularities and Discrepancies in Discharges of Mortgage and other Documents
  • 18.3 Discharges of Corrected, Re-Recorded, or Modified Mortgages
  • 18.4 Effect of Failure to Discharge Assignments of Leases and/or Rent, Riders or Financing Statements
  • 18.5 Discharges Involving Mortgage Electronic Registration System (MERS)
  • 19.1 Tax Collector's Deed
  • 20.1 Presumptions Applicable to Corporate Conveyances
  • 22.1 Limited Liability Companies
  • 23.1 Federal General Tax Lien
  • 24.1 Federal Special Estate Tax Lien
  • 25.1 Federal Gift Tax Lien
  • 27.1 Vermont Estate Tax Lien
  • 28.1 Establishing Marketable Title To Interests In Real Property Owned By Failed Financial Institutions
  • 28.2 Title of the Receiver of a Failed Financial Institution to the Assets of That Institution
  • 28.3 Title of the Immediate Transferee of the Receiver of a Failed Financial Institution
  • 28.4 Marketability of Title In a Real Estate Interest of a Failed Financial Institution for Which No Conveyance, Transfer or Assignment Appears of Record Prior to the Dissolution of the Bridge Institution Which Had Continued The Business of the Failed Institution
  • 28.5 Discharges, Partial Releases, Assignments and Foreclosure of Mortgages of a Failed Institution By a Transferee of the Receiver For Such Failed Institution

CHAPTER XV

 DEEDS RETAINING LIFE ESTATES WITH RESERVED POWERS

Standard 15.1

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 A life estate with reserved powers is created when the record title holder (the “Grantor”) conveys title to one or more persons (the “Remainderman”), and reserves a life estate together with an additional right  to sell, mortgage, lease, gift, or otherwise convey with or without consideration fee title or any lesser interest. A title examiner may presume a subsequent conveyance (including a conveyance of the fee, a mortgage, a lease, or the conveyance of some interest less than the entire fee) by the Grantor, without joinder by the Remainderman, is a valid transfer of the specified interest as long as the right to convey such interest was granted to or retained by the Grantor.

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NOTE:  This Standard is not intended to address the efficacy of these deeds for Medicaid Planning purposes, or their compliance with Medicaid regulations.

Comment 1.  Without reserved powers, creation of a life estate results in two vested estates, an interest for life and a remainder interest. The holder of a life estate without reserved powers cannot convey, alter, revoke or otherwise affect the remainder interest nor convey a greater estate.  
 
Deeds creating an enhanced life estate with reserved powers have been variously known as – “Ladybird Johnson” deeds, “Granai” deeds, “Medicaid” deeds or “Barre” deeds.  See, Aiken v. Clark, 117 Vt. 391 (1952), for a general discussion of the principles applicable to life estate. See, Weed v. Weed, 2008 VT 121, 185 Vt. 83,  968 A.2d 210 (2008) for a general discussion of the principles related to exercising power to convey under a reserved power where the transfer is a gift and not a sale.

Comment 2. No statutory language or universally accepted language exists to create a life estate with reserved powers.

Comment 3.  The use of the word “title” in this standard is not intended to define the extent of the holder's interest.

Comment 4.  Title examiners should be aware of the consequences of the holding in Brousseau v. Brousseau, 182 Vt. 533, 927 A.2d 773 (2007)), and in particular the Court's adoption of the principle that an off record intention, expressed after the date of the conveyance that the conveyance was not intended to create a present vesting of an interest in the property conveyed is sufficient to overcome any presumption of donative intent. Thus, during the lifetime of the grantor of the deed, it is possible for the grantor to assert that there was no intent to make a present gift of an interest in the property conveyed and thus any transfer of interest apparent in the deed was ineffective.

History

September 24, 2010  This standard was added.