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5 Estate Planning Strategies to Help Your Estate Avoid Probate in Vermont

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Probate, the legal process through which a court oversees the distribution of a decedent’s assets, can be a time-consuming and costly process which makes avoiding probate a common estate planning goal. While probate ensures that debts are paid and assets are distributed according to the decedent’s wishes, probate can delay the transfer of assets to heirs and expose the estate to unnecessary costs. With that in mind, an Essex Junction attorney at Unsworth LaPlante, PLLC explains five estate planning strategies that can help your estate avoid probate in Vermont.

  1. Establish a Revocable Living Trust: A revocable living trust is one of the most powerful tools for avoiding probate. When you create a revocable living trust, you transfer ownership of your assets into the trust, but you retain control over them during your lifetime if you appoint yourself to be the Trustee. Upon your death, the successor Trustee you name in the trust takes over and distributes the assets according to the terms you set forth in the trust agreement without the need for court involvement.
  2. Designate Beneficiaries on Accounts: Many types of financial accounts and insurance policies allow you to name a beneficiary. By designating beneficiaries, you ensure that these assets pass directly to the named individuals upon your death, without the need for probate. In Vermont, assets such as life insurance proceeds, retirement accounts (like IRAs or 401(k)s), and certain bank accounts can pass to beneficiaries without court supervision if you have completed the appropriate beneficiary designations. Additionally, Vermont law allows for the use of “Payable on Death” (POD) or “Transfer on Death” (TOD) designations for bank accounts, securities, and other financial instruments. A POD or TOD designation allows the assets to automatically pass to the named beneficiary upon your death; however, unlike joint ownership, the beneficiary of a POD or TOD account has no ownership interest in the asset while you are alive.
  3. Joint Ownership: Joint ownership of property with a right of survivorship can also help avoid probate. In Vermont, property owned jointly with another person, such as a spouse, will automatically transfer to the surviving co-owner upon your death, bypassing probate. This form of ownership is most commonly used for real estate, bank accounts, and investment accounts. Keep in mind, however, that while joint ownership allows the surviving owner to avoid probate, it also gives them equal control of the asset during your lifetime. You should carefully consider whether joint ownership is the right strategy, particularly if the other person is not a spouse or if you wish to maintain sole control over the asset while you are alive.
  4. Give Gifts During Your Lifetime: Another effective way to reduce the size of your probate estate is to give assets away during your lifetime. By transferring ownership of certain assets to loved ones while you are alive, you can ensure that those assets will not be subject to probate when you die. Using the yearly exclusion, you can make gifts valued at up to $18,000 (as of 2024) to an unlimited number of beneficiaries tax-free each year. Giving gifts can also help reduce the value of your estate for estate tax purposes, although Vermont has a state-level estate tax that may apply to larger estates.
  5. Use Small Estate Procedures for Modest Estates: For estates with a relatively low value, Vermont provides a simplified probate process known as the “Small Estate Procedure.” If the total value of the estate is below a certain threshold ($45,000 as of 2024) and includes only personal property, beneficiaries can use an affidavit to claim assets without going through the full probate process. While this option does not technically avoid probate, it offers a much simpler and less expensive alternative to traditional probate for smaller estates.

Can We Help Your Estate Avoid Probate in Vermont?

For more information, please attend one of our upcoming FREE webinars. If you would like assistance with estate planning strategies that can help your estate avoid probate in Vermont, contact an experienced Essex Junction estate planning attorney at Unsworth LaPlante, PLLC by calling 802-879-7133 to schedule your appointment today.

Stephen Unsworth
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