Vermont Estate Planning and Probate

Vermont Estate Planning and Probate

Estate planning is the thoughtful, strategic process of preparing for the management and distribution of your assets — both during your lifetime and after your death. At Nicole Peck McPhee, PC, we help Vermont individuals, families, and business owners create comprehensive estate plans that protect what matters most: your family, your wealth, your health care wishes, and your legacy.

A well-designed Vermont estate plan does far more than distribute property. It protects your loved ones from unnecessary probate proceedings, minimizes state and federal taxes, ensures the right people are empowered to make decisions if you cannot, and gives you lasting peace of mind.

Estate planning involves creating a coordinated set of legal documents — including wills, trusts, powers of attorney, and health care directives — that together form a complete plan for managing your affairs. It addresses three fundamental questions:

✦     What happens to my assets when I die or become incapacitated?

✦     Who will make financial and medical decisions for me if I cannot?

✦     How do I protect my family, my business, and my legacy?

Estate planning is not exclusively for the wealthy or the elderly. Vermont residents of all ages and income levels benefit from having a plan in place. In fact, as the real-life scenarios below illustrate, the consequences of failing to plan can be severe — and often irreversible.

Our Vermont estate planning practice offers a full range of services tailored to your individual goals and family circumstances. Every plan we create is custom-designed — not a one-size-fits-all template.

Wills (Last Will and Testament)

A Last Will and Testament is the foundation of most Vermont estate plans. Your will specifies how your property is distributed after death, names an executor to administer your estate, nominates guardians for minor children, and can fund testamentary trusts for beneficiaries who need ongoing management of their inheritance. Without a valid will, Vermont's intestacy laws determine who receives your assets — which may not reflect your wishes.

Revocable Living Trusts

A revocable living trust allows you to transfer assets into a trust during your lifetime while retaining full control as your own trustee. Upon death or incapacity, a successor trustee steps in seamlessly — without court involvement. Assets held in a living trust avoid Vermont probate, pass privately, and can include detailed instructions for managing inheritances for children, grandchildren, or beneficiaries with special circumstances.

Powers of Attorney

Durable Financial Power of Attorney — Authorizes a trusted person to manage your financial, legal, and property matters if you become incapacitated. Without this document in place, your family may be required to petition a Vermont court for guardianship — a time-consuming and expensive process.

Springing Power of Attorney — Becomes effective only upon a defined triggering event, such as a physician's certification of incapacity, giving you greater control over when the authority activates.

Health Care Directives

Vermont Advance Directive — Vermont's advance directive combines a health care power of attorney and living will into one document. It designates a health care agent to make medical decisions on your behalf and specifies your wishes regarding life-sustaining treatment, organ donation, and end-of-life care.

HIPAA Authorization — Ensures that your designated representatives can access your medical records and communicate with your health care providers.

Guardian Nominations for Minor Children

Naming a guardian for your minor children is one of the most important decisions in any Vermont estate plan. If you die without a valid guardian nomination, a Vermont court will decide who raises your children — potentially appointing someone you would not have chosen. Our estate plans include clear, legally sound guardian nominations that reflect your wishes.

Probate & Estate Administration in Vermont

When a Vermont resident dies, their estate may be required to pass through Vermont probate court before assets can be distributed to beneficiaries. Probate is a court-supervised process that validates the will, pays debts and taxes, and oversees the distribution of the estate. Nicole Peck McPhee, PC assists Vermont families with:

•       Filing and administering Vermont probate estates

•       Petitioning for appointment as executor or administrator

•       Probate of wills and intestate estates

•       Creditor claims and estate debt resolution

•       Distribution of estate assets to beneficiaries

•       Ancillary probate for Vermont real property owned by out-of-state decedents

•       Probate avoidance strategies through trusts and beneficiary designations

•       Contested estate matters and will disputes

For families who wish to avoid probate entirely, we design estate plans using revocable living trusts, joint ownership structures, and beneficiary designations to transfer assets outside of the probate process — saving time, cost, and protecting your family's privacy.

Estate & Gift Tax Planning

Vermont imposes its own state estate tax with a lower exemption threshold than the federal estate tax, meaning Vermont estates that fall below the federal exemption may still owe Vermont state estate tax. Our estate tax planning strategies include:

•       Credit Shelter Trusts (Bypass Trusts) to maximize both spouses' Vermont and federal exemptions

•       QTIP Trusts to provide for a surviving spouse while controlling ultimate distribution

•       Irrevocable Life Insurance Trusts (ILITs) to remove life insurance from the taxable estate

•       Spousal Limited Access Trusts (SLATs) for married couples seeking to reduce estate tax exposure

•       Grantor Retained Annuity Trusts (GRATs) and QPRTs for transferring appreciating assets tax-efficiently

•       Annual gifting strategies to reduce taxable estate over time

Special Needs & Disability Planning

A Special Needs Trust (Supplemental Needs Trust) is an essential planning tool for Vermont families with a loved one who has a disability. Properly structured, it provides financial support without disqualifying the beneficiary from Medicaid, SSI, or other critical government programs. We also draft ABLE account guidance and coordinate with Vermont's disability services to create integrated plans.

Business Succession Planning

Vermont business owners face unique estate planning challenges. Without a succession plan, the death or incapacity of a principal owner can threaten business continuity, trigger forced sales, or create conflict among family members and business partners. We help Vermont business owners structure buy-sell agreements, transfer ownership through trusts, and create plans that protect both the business and the owner's family.

Charitable Estate Planning

If supporting Vermont charities, educational institutions, or community organizations is part of your legacy, we incorporate charitable giving strategies — including Charitable Remainder Trusts, Charitable Lead Trusts, and direct bequests — that achieve your philanthropic goals while reducing estate and income taxes.

Medicaid & Long-Term Care Planning

Vermont's long-term care costs can devastate a lifetime of savings in a matter of months. Medicaid planning, using irrevocable Medicaid Qualifying Trusts and other strategies, can protect your home and assets while preserving your eligibility for Vermont Medicaid benefits. The earlier you plan, the more options are available.

Benefit	What It Means for Vermont Families
Control & Direction	Your assets go to exactly who you choose — not who Vermont law defaults to.
Probate Avoidance	A living trust keeps your estate out of Vermont probate court, saving time, cost, and protecting your family's privacy.
Tax Minimization	Strategic planning reduces or eliminates Vermont and federal estate taxes, keeping more wealth in your family.
Incapacity Protection	Powers of attorney and health care directives empower trusted people to act for you — without costly Vermont court proceedings.
Guardian Nomination	You designate who raises your minor children — not a Vermont judge who doesn't know your family.
Asset Protection	Trusts shield inheritances from beneficiaries' creditors, divorcing spouses, or poor financial decisions.
Family Harmony	Clear instructions prevent disputes among family members and reduce the risk of will contests.
Business Continuity	Succession plans protect Vermont family businesses from disruption, forced sales, or family conflict.
Medicaid Planning	Irrevocable trusts and strategic gifting protect assets from Vermont Medicaid spend-down requirements.
Charitable Legacy	Planned giving through trusts and bequests supports Vermont causes while delivering tax benefits.
Privacy	Trusts avoid the public probate record — your estate distribution stays confidential.
Peace of Mind	Knowing your family is protected and your wishes are legally documented — priceless.

The following scenarios illustrate what can go wrong — and what can be protected — with thoughtful estate planning. These are not hypothetical. Situations like these happen to Vermont families every day.

Scenario 1: Domestic Partners Without a Plan Roger and Kate had been domestic partners for 20 years. Kate relied on Roger for financial support. Roger never created a will or trust. When Roger died unexpectedly, his assets passed through probate and distributed under Vermont intestacy law to his blood relatives — not to Kate. Because they were not married, Kate was not considered next of kin and received nothing. Had Roger established a will or a fully funded living trust, Kate would have been protected exactly as he intended.

Scenario 2: Blended Families and Vermont Probate Michael, 45, died while residing in Vermont, survived by his wife and two children, ages 8 and 10, from a prior marriage. Without a plan, his estate entered Vermont probate. Under Vermont law, his wife received half and his children split the remainder — with full, unprotected distribution at age 18. A fully funded living trust would have bypassed probate entirely, protected his wife's interests, and allowed Michael's assets to continue in trust for his children well beyond age 18, available for their health, education, and support.

Scenario 3: Incapacity Without Documents Sarah, 65, suffered a stroke and could no longer make medical or financial decisions. Because she had no health care directive or power of attorney, her family was forced to petition a Vermont court for guardianship — a lengthy, expensive, and emotionally difficult process. A comprehensive Vermont advance directive and durable power of attorney would have authorized her family to act immediately, without any court involvement.

Scenario 4: Remarriage and Unintended Disinheritance Kim and Greg drafted reciprocal wills leaving everything to each other, then to their children Abby and Tom. After Greg died, Kim remarried. When Kim later died, her new husband claimed marital rights — receiving half her estate plus significant additional assets under Vermont law. Over half of Greg and Kim's original estate intended for their children passed instead to Kim's new spouse. Had Greg used a trust, those assets would have been protected for his children regardless of Kim's remarriage.

Scenario 5: No Guardian Nomination for Minor Children Larry, a single parent to Lily and Mark, died unexpectedly without a will or guardian nomination. Despite Larry's wish for his sister to raise his children, the Vermont court appointed a different guardian. Mark received his inheritance outright at 18 and quickly lost it. Lily used hers for college but lost the remainder in a divorce. A trust with a proper guardian nomination would have secured the right guardian, protected the children's inheritances from being squandered, and provided for their long-term stability.

Scenario 6: No Health Care Directive: The Terri Schiavo Case In 1990, 26-year-old Terri Schiavo suffered a cardiac arrest that left her with severe brain damage. For 15 years, her husband and parents battled in court — all the way to the U.S. Congress and the Florida Governor — over who had the authority to make her medical decisions. She died in March 2005 after her feeding tube was removed following a final court order. This entire 15-year legal and family battle would have been avoided had Terri executed a comprehensive health care directive expressing her own wishes.

Estate planning is not a one-time event. Your plan should be created as soon as possible — and reviewed whenever your life circumstances change. Common triggers for creating or updating a Vermont estate plan include:

✦     Getting married or divorced

✦     Having or adopting a child or grandchild

✦     Death of a spouse, beneficiary, executor, or trustee

✦     Significant changes in assets, income, or business ownership

✦     Purchasing Vermont real estate

✦     Retirement or approaching retirement

✦     Diagnosis of a serious illness — for you or a family member

✦     Changes in Vermont or federal estate tax law

✦     Moving to Vermont from another state

✦     Starting, selling, or transferring a Vermont business

Even if none of these have occurred, if you do not currently have an estate plan — or if yours is more than three to five years old — now is the right time to speak with an experienced Vermont estate planning attorney.

Schedule a Consultation with Attorney Nicole Peck McPhee

Whether for estate planning and wills or trusts, a real estate transaction, business formation or acquisition, or a private adoption matter, the first step is a focused one-on-one consultation. Nicole will learn about your situation, clearly explain your legal options, and outline exactly what is needed and at what cost. Consultations are available in person in Rutland or by secure Google Meet for clients anywhere in Vermont.

Contact us at 802-775-4845 or by email at [email protected] or contact Nicole Peck McPhee, PC.