How to Create a Living Trust in Vermont

Contrary to popular belief, living trusts aren’t just for the wealthy. In Vermont, anyone who owns property and has an estate valued over $10,000 may benefit from creating a living trust. This can help heirs avoid the probate process, which can take six to 18 months even without litigation. Before you create a living trust, however, it’s important to understand how living trusts work in Vermont and whether one is right for your situation. If you have a larger estate or want personalized guidance, working with a financial advisor can help you navigate the complexities of estate planning and make the most of your assets.

How to Create a Living Trust in Vermont

Setting up a living trust, sometimes called a family trust, is largely the same regardless of where you live in the U.S. Here are the basic six steps:

Determine what will go into the trust: Some assets can’t, such as pensions, 401(k) plans and IRAs. Other things like bank and brokerage accounts can but don’t need to, as long as you designate your beneficiaries on the accounts or policies so that they are payable or transferred on death. Most likely, it’s your home and other real property that you want to protect with a living trust. (But as long as you are setting up the trust, you may decide to put everything you can in it.)
Select the appropriate type of living trust: You probably want it to be revocable (as opposed to irrevocable). This means you maintain control of the assets and have the flexibility to modify or cancel the trust. If you are married (and all of your children are with this spouse), you may want to bind each other to a plan by creating a joint living trust. If you’re in a later marriage with children from previous relationships, you probably want to go with two single trusts, which offer more flexibility.
Name the trustee who will manage the trust: With revocable trusts, it can be you, or in the case of a joint trust, you and your spouse can be co-trustees. If you appoint yourself, you’ll also need to name a successor trustee for when you die. With irrevocable trusts, the trustee must be someone other than you.
Create a trust agreement: To make sure you do this correctly, you should hire an attorney. But if you want to do this cheaply, you can use an online program.
Sign the trust document: You must do this before a notary public.
Transfer assets to the trust: This can be done by retitling them or deeding them to the trust. This is called funding the trust. In Vermont, you can wait until death to make the transfers, which leaves your trust “dry” or “unfunded” until then. For things that can’t be titled, like jewelry or antiques, it’s enough just to list them in the trust agreement. Again, you can do the paperwork yourself, though using a lawyer will ensure that your transfers are done properly.

If you’re not sure if a living trust is right for you and your needs, consider speaking with a financial advisor.

What Is a Living Trust?

A living trust is a legal document that assigns where property is to go when the owner – or trust grantor – dies. Unlike a will, a living trust is also an entity that holds the property while the grantor is alive. The most common goal of a living trust is to skip probate, a court process that takes time and costs money.

The person who manages the trust is the trustee. As stated earlier, the trustee can be the grantor if it’s a revocable trust. Or, it can be a grown child, other relative, lawyer… anyone you trust. When the grantor dies, the trustee or successor trustee will manage and distribute assets as the grantor instructed.

As explained earlier, there are revocable and irrevocable living trusts. The former is commonly preferred because the grantor does not give up ownership rights. On the other hand, grantors of irrevocable trusts do give up all claim to control and ownership. This means they’re off the hook for taxes.

How Much Does It Cost to Create a Living Trust in Vermont?

The cost of creating a living trust in Vermont can vary widely depending on the complexity of your estate and whether you hire professional assistance.

Attorney Fees

The most significant cost is typically the attorney’s fee. Hiring an estate planning attorney ensures your trust is properly structured and complies with Vermont law. Legal fees may range from $1,000 to $3,000 or more. This depends on your estate’s complexity and whether you’re establishing a single or joint trust. Some attorneys charge by the hour, while others offer flat-rate packages that include drafting the trust and related documents (like a pour-over will or power of attorney).

While it’s possible to create a living trust using DIY templates or online legal services, which might cost anywhere from free to several hundred dollars, this option carries more risk. Mistakes or omissions can lead to legal complications later, potentially undermining the purpose of the trust.

Additional Costs

Beyond legal fees, there are several administrative costs associated with transferring ownership of assets into your trust:

Deed preparation fees: If you’re transferring real estate, you’ll need to prepare a new deed naming the trust as the owner.
County recording fees: Vermont counties charge fees to record new property deeds, typically ranging from $10 to $15 per page.
Transfer taxes: Vermont does not impose a real estate transfer tax for property placed into a revocable living trust with the same beneficial owner. However, it’s wise to check with your local clerk or attorney for specific scenarios.

Retitling Other Assets

If you’re transferring other assets like bank accounts, investment accounts or vehicles into your trust, your financial institutions may have forms or minor fees for retitling. While these costs are usually minimal, the process can be time-consuming and may require coordination across multiple institutions.

Living Trusts vs. Wills

Since it’s hard to get absolutely everything you own into a trust, wills are highly recommended. With a will, you can also leave instructions such as:

Naming an executor (as opposed to having the court name someone who wouldn’t be your top choice)
Stating your preference for guardians of children who are minors
Forgiving loans you’ve made, say, to a sibling

This chart shows what you can and can’t do through living trusts and wills:

Living Trusts vs. Wills

Task	Living Trusts	Wills
Names a property beneficiary	Yes	Yes
Allows revisions to be made	Depends on type	Yes
Avoids probate court	Yes	No
Requires a notary	Yes	No
Names guardians for children	No	Yes
Names an executor	No	Yes
Requires witnesses	No	Yes

Living Trusts and Taxes in Vermont

A living trust will not reduce Vermont’s estate tax, which kicks in for estates valued at $5 million and more. It may cut your federal estate tax liability if your estate is in the eight figures. For 2024, the federal estate tax exemption amount was $13.61 million for individuals, and $27.22 million for couples. For tax year 2025, it was raised to $13.99 million for individuals and $27.98 million for couples. But if you’re considering a living trust to lower your estate tax, you should consult an attorney about your options.

Vermont has no inheritance tax.

Why Get a Living Trust in Vermont?

The main reason for creating a living trust in Vermont – or anywhere – is to avoid probate, the court process for enacting a will. Though the state has not adopted the Uniform Probate Code, probate in Vermont is not considered excessively long or expensive. If no litigation is involved, it generally takes six to 18 months, according to some estimates. (Creditors must be given at least four months to submit any claims on the estate.)

Still, bank accounts are frozen during probate, which can cause problems if heirs are unable to cover bills related to the estate. And if litigation is involved – maybe someone contests the will – lawyer and court fees will add up.

A living trust, then, would enable your heirs to avoid these delays and costs (which can be even more if you own property in other states). Another benefit of trusts is that you can use them to provide for minors and for disabled heirs. Trusts also allow for the distribution of assets to be postponed till, say, grandchildren get married (with wills, this happens once probate closes).

Who Should Get a Living Trust in Vermont?

You don’t need a living trust if your estate is worth less than $45,000 and you don’t own any real estate. If that’s your situation, your heirs can follow what’s called “small estate procedures,” which do not involve probate.

You may also not need a living trust if your estate is free of debt and there will be no disputes. As noted earlier, probate in Vermont can be relatively simple and inexpensive.

People who may want to set up a living trust are owners of property in multiple states. Or they want their beneficiaries to receive their inheritance immediately. You may also want one if it’s likely your will to be contested. For example, perhaps you’re leaving more to one child than another. Other reasons for getting a living trust include providing for a disabled individual or wanting to postpone disbursement of your assets until a child reaches a certain age.

As for irrevocable trusts, these only make sense for very wealthy people looking to minimize estate taxes.

Bottom Line

A map of the United States, with the state of Vermont highlighted.

The primary reason for getting a living trust in Vermont is that your estate is worth more than $10,000 and want your beneficiaries to receive it straight away. A living trust may also make sense if you want to provide for a disabled individual or if you want to divvy up your estate in an unequal way. You likely don’t need a living trust if your heirs can wait out probate. In Vermont, the process isn’t excessively long, though the state has not adopted the Uniform Probate Code.

Estate Planning Tips

There’s a reason professionals specialize in estate planning: It can be complicated. A financial advisor can help you with tax planning and wealth transfers as well as investing assets to provide income. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Designate your beneficiaries. As tedious as filling out the forms and keeping them updated can be, it is well worth the trouble. Life insurance policies, retirement accounts and brokerage accounts can be transferred or payable on death if you name your beneficiaries.