Norman Dacy's 1965 popular book entitled "How to Avoid Probate" has created the popular belief that Probate Court is an evil leading to taxes and unnecessary cost. (Not necessarily true.) It stimulated parents to deed real estate to a child in joint ownership with a right of survivorship. People do the same with bank accounts. Good idea?

In 1984 mother deeded her real estate to a daughter as joint owners with rights of survivorship. Daughter paid no money for the deed. When mother went into an assisted living facility in 2005 she wanted to sell the property so she could live comfortably in her new arrangement. Daughter refused to agree to the sale claiming she was a one half owner and should get one half of the money. (The same issue can come up in divorce cases - is the jointly owning spouse's interest in the parent's property "marital property" to be divided?) Litigation followed. The Superior Court agreed with daughter, ruling that the deed was an absolute gift which conveyed daughter a one half interest in the property. It refused to hear mother's testimony that she never intended to give daughter a present interest in the land, but only a survivorship interest if she died first. Mother appealed.

The Vermont Supreme Court, over the dissent of Justice Dooley, ruled that the court should hear mother's side of the story, because if she didn't intend to make an immediate gift of one half the value of the property, the mere fact that she deeded the property that way to her daughter was not conclusive. The Court was required to have a factual hearing as to mother's intent some 20 years ago, and if it found for mother, deny daughter anything.

Justice Dooley argued that the majority rule, that a deed given for "estate planning", that is to avoid probate does not give automatic title, "Is a bad rule, and one we should categorically reject." The rule, he wrote, makes it impossible to rely on record title, creates fictitious ownership of land, and encourages evasion of probate rules designed to protect other beneficiaries, creditors, and the public treasury.

Families beware; an "Indian Gift" may not avoid probate and instead be a deed to uncertainty, family strife and expensive litigation. Brousseau v. Brousseau 2006 Vt. 32 (filed 5/29/2007)