Introduced by Representative Obuchowski of Rockingham
Subject: Property; vulnerable adults; improvident transfers
Statement of purpose: This bill proposes to create a civil action for the improvident transfer of property by a vulnerable adult.
AN ACT RELATING TO IMPROVIDENT TRANSFERS OF PROPERTY BY A VULNERABLE ADULT
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 12 V.S.A. chapter 24 is added to read:
Chapter 24. Improvident Transfer of
Property by a Vulnerable Adult
§ 601. DEFINITIONS
As used in this chapter:
(1) “Court” means the superior court in the county in which a vulnerable adult resides.
(2) “Independent counsel” means an attorney retained by a vulnerable adult or his or her guardian to represent only that person’s interests in the transfer.
(3) “Less than full consideration,” with respect to a transfer of property, means the transferee pays less than fair market value for the property, or the transfer is supported by past consideration.
(4) “Major transfer of personal property or money” means a transfer of money or items of personal property which represent ten percent or more of the vulnerable adult’s personal estate. A transfer does not include testamentary transfers, which are outside the scope of this chapter.
(5) “Vulnerable adult” means the same as defined in subdivision 1375(8) of Title 13.
§ 602. UNDUE INFLUENCE
(a) In any transfer of real estate or major transfer of personal property or money for less than full consideration or execution of a guaranty by a vulnerable adult to a person with whom the vulnerable adult has a confidential or fiduciary relationship, it is presumed that the transfer or execution was the result of undue influence, unless the vulnerable adult was represented in the transfer or execution by independent counsel. When the vulnerable adult raises successfully the presumption of undue influence by a preponderance of the evidence and when the transferee or person who benefits from the execution of a guaranty fails to rebut the presumption, the vulnerable adult is entitled to void the transfer or execution and entitled to the relief set forth in section 603 of this title.
(b) For the purpose of this section, the transfer of property or execution of a guaranty is deemed to have been made in the context of a confidential or fiduciary relationship if the transferee or person who benefits from the execution of a guaranty had a close relationship with the vulnerable adult prior to the transfer or execution. Confidential or fiduciary relationships include the following:
(1) A family relationship between the vulnerable adult and the
transferee or person who benefits from the execution of a guaranty, including relationships by marriage and adoption;
(2) A fiduciary relationship between the vulnerable adult and the transferee or person who benefits from the execution of a guaranty, such as with a guardian, conservator, trustee, accountant, broker, or financial advisor;
(3) A relationship between a vulnerable adult and a physician, nurse, or
other medical or health care provider;
(4) A relationship between the vulnerable adult and a
psychologist, social worker, or counselor;
(5) A relationship between the vulnerable adult and an attorney;
(6) A relationship between the vulnerable adult and religious clergy or other spiritual advisor;
(7) A relationship between the vulnerable adult and a person who provides care or services to that person whether or not the vulnerable adult pays for the care or services;
(8) A relationship between a vulnerable adult and a friend or neighbor; or
(9) A relationship between a vulnerable adult and a person sharing the
same living quarters.
(c) When any of these relationships exist and if a transfer or execution is made to a corporation or organization primarily on account of the membership, ownership or employment interest or for the benefit of the fiduciary or confidant, a fiduciary or confidential relationship with the corporation or organization is deemed to exist.
§ 603. CIVIL ACTION; RELIEF AVAILABLE
(a) A civil action may be brought to obtain relief under this chapter by a vulnerable adult, that person’s legal representative, or the personal representative of the estate of the vulnerable adult.
(b) When the court finds that a transfer of property or execution of a guaranty was the result of undue influence, it shall grant appropriate relief enabling the vulnerable adult to void the transfer or execution, including the rescission or reformation of a deed or other instrument, the imposition of a constructive trust on property or an order enjoining use of or entry on property or commanding the return of property. When the court finds that undue influence is a good and valid defense to a transferee’s suit on a contract to transfer the property or a suit of a person who benefits from the execution of a guaranty on that guaranty, the court shall refuse to enforce the transfer or guaranty.
(c) No relief obtained or granted under this section shall in any way affect or limit the right, title, and interest of good faith purchasers, mortgagees, holders of security interests or other third parties who obtain an interest in the transferred property for value after its transfer from the vulnerable adult. No relief obtained or granted under this section may affect any mortgage deed to the extent of value that the mortgagee may give.
(d) The limitations on civil actions imposed by section 511 of this title shall apply to all actions brought under this chapter.
§ 604. OTHER COMMON LAW AND STATUTORY CAUSES OF
ACTION AND RELIEF STILL AVAILABLE
Nothing in this chapter shall be construed to abrogate any other causes of action or relief at law or equity to which a vulnerable adult is entitled under other laws of this state or at common law.
§ 605. TITLE PRACTICES
This chapter does not require that language showing compliance with this chapter be included in a deed and does not require that evidence of compliance with this chapter be recorded in the registry of deeds. Any attempt to record such evidence is void and has no effect on title.
The Vermont General Assembly
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