Vermont inheritance laws set out who receives a person’s property after death, what the surviving spouse is entitled to regardless of the will, and when the estate owes tax to the state. Vermont does not impose an inheritance tax on people who receive property. It does levy an estate tax on estates worth more than $5 million, and it runs every probate case through the Probate Division of the Superior Court in the county where the deceased lived.
Who Inherits When There Is No Will
When someone dies without a valid will, Vermont’s intestate succession statute controls the distribution. The surviving spouse’s share depends on whether the deceased had children and who the other parent of those children is.1Vermont General Assembly. Vermont Code 14 V.S.A. 311 – Share of Surviving Spouse
- Spouse and no descendants: the spouse inherits everything.
- Spouse and children who are also the spouse’s children: the spouse still inherits everything.
- Spouse and children from another relationship: the spouse gets half, and the deceased’s descendants split the other half.
Without a surviving spouse, the estate passes to the deceased’s descendants. If there are no descendants, it goes to the deceased’s parents in equal shares, or to the surviving parent alone.2Vermont General Assembly. Vermont Code 14 V.S.A. 314 – Share of Heirs Other Than Surviving Spouse From there the chain moves to siblings and their descendants, then to more distant relatives. If no qualifying relative can be found, the estate goes to the state.
The court applies this order rigidly. A judge has no authority to redirect assets based on what seems fair or what the deceased is said to have wanted. Anyone who wants property to reach a friend, a charity, or a relative who ranks low in the statute needs a valid will.
What Makes a Vermont Will Valid
A person making a will in Vermont must be at least 18 years old (or emancipated by court order) and of sound mind.3Vermont General Assembly. Vermont Code 14 V.S.A. 1 – Persons Competent to Make The will has to be in writing, signed by the person making it, and signed by at least two credible witnesses. Vermont does not recognize handwritten wills that lack witnesses.
Children Left Out By Accident
If a child is omitted from a will by mistake, Vermont treats the omission as an error. The omitted child (or the descendants of a deceased child) receives the same share they would have gotten under the intestate rules, effectively overriding the will as to that child.4Vermont General Assembly. Vermont Code 14 V.S.A. 333 – Share of Omitted Child This applies only when the omission was accidental. To disinherit a child intentionally, name the child in the will and state that the omission is deliberate. Silence invites a challenge.
Contesting a Will
Only people with standing can contest a Vermont will. That means people named in the will, people named in a prior will, and heirs who would inherit under intestate succession. The recognized grounds are narrow: lack of mental capacity when signing, improper execution such as a missing signature or witness, or undue influence that overrode the person’s free will. Objections must be filed in writing before the probate hearing.5Vermont General Assembly. Vermont Code 14 – Probate and Procedure for Construction of Wills
What a Surviving Spouse Is Entitled To
Vermont gives surviving spouses several protections that apply regardless of what the will says. They work independently, so claiming one does not forfeit the others.
Elective Share
A surviving spouse can reject the will and instead take one-half of the probate estate after allowances, debts, and administrative expenses are paid.6Vermont General Assembly. Vermont Code 14 V.S.A. 319 – Elective Share of Surviving Spouse The election must be filed in writing with the probate court within four months of the later of two dates: when the spouse receives formal notice of their rights, or when the estate inventory is served on them. Missing the deadline forfeits the right.
Homestead Exemption
Vermont’s homestead law protects up to $125,000 in value of the family home. On the owner’s death, the homestead passes to the surviving spouse free from the deceased’s unsecured debts, provided those debts were not legally secured against the property during the owner’s lifetime. The probate court formally sets out the homestead to the spouse. No election or filing by the spouse is required.
Family Allowance
The probate court can order the estate to pay reasonable support for the surviving spouse and minor children while the estate is being settled. The allowance covers the period from the date of death until distribution, or up to eight months in an insolvent estate.7Vermont General Assembly. Vermont Code 14 – Descent and Survivors’ Rights The court has discretion to prioritize this allowance ahead of estate debts. A separate allowance for minor children of the deceased covers their necessary support and maintenance until they turn 18.
What Property Skips Probate
Not everything a person owned goes through probate. Only assets titled solely in the deceased’s name at death require court involvement. Individually owned bank accounts, solely owned real estate, and personal property like vehicles or furniture are the common examples.
Assets with a built-in transfer mechanism bypass probate entirely. Life insurance pays directly to the named beneficiary. Retirement accounts pass to whoever is listed on the beneficiary form. Property held in a living trust transfers under the trust terms.8Vermont Judiciary. Probate Division Real estate owned as joint tenants with right of survivorship belongs to the surviving co-owner automatically at the moment of death. None of these assets are affected by the will or by the intestate statute, and an outdated beneficiary form naming an ex-spouse will control over any conflicting language in the will.
Vermont Estate Tax
Vermont imposes an estate tax on estates valued above $5 million. There is no state inheritance tax, so recipients are not taxed on what they receive. For estates above the threshold, the rate is a flat 16% on the amount over $5 million.9Vermont General Assembly. Vermont Code 32 V.S.A. 7442a – Imposition of a Vermont Estate Tax and Rate of Tax An estate worth $5.5 million would owe 16% on the $500,000 excess, or $80,000.
The estate tax return is filed with the Vermont Department of Taxes within nine months of the date of death. Executors can request a six-month extension before the original deadline expires.10Vermont General Assembly. Vermont Code 32 V.S.A. 7446 – Filing of Return Vermont’s $5 million threshold is well below the federal exemption, so many estates that owe no federal estate tax still owe Vermont estate tax.11Internal Revenue Service. What’s New – Estate and Gift Tax
Opening a Probate Estate
Probate is filed with the Probate Division of the Superior Court in the county where the deceased lived.12Vermont Judiciary. Estates and Wills The initial filing requires:
- A certified copy of the death certificate.
- The original will and any codicils, if one exists.
- The Petition to Open Decedent’s Estate (Form 700-00001), which asks for the estimated value of real estate and personal property and names the person proposed to manage the estate.13Vermont Judiciary. Petition to Open Decedent’s Estate
- A list of interested persons with names and addresses of heirs, beneficiaries, and other stakeholders.
- A filing fee that scales with total estate value.
If the will names an executor, the court generally appoints that person. Without a will, the court picks an administrator following a statutory priority list that favors the surviving spouse and close family. Once the paperwork is approved, the court issues Letters Testamentary (with a will) or Letters of Administration (without one).5Vermont General Assembly. Vermont Code 14 – Probate and Procedure for Construction of Wills These letters are the legal proof of authority to act for the estate, including accessing accounts, selling property, and making distributions.
The Small Estate Shortcut
Vermont offers a streamlined process for smaller estates. If the deceased owned no real estate (other than a timeshare) and the total estate value is under $45,000, the small estate procedure is available instead of full probate.12Vermont Judiciary. Estates and Wills The filing still runs through the Probate Division and still requires a certified death certificate, the original will (if any), and a copy of a paid funeral bill. The main form is the Petition to Open Small Estate (Form 700-00001SM). The filer also submits an inventory, a bond without surety unless the judge orders otherwise, and an affidavit of funeral expenses and outstanding debts. A proposed executor or administrator who lives outside Vermont must appoint a Vermont resident agent.
After the court approves, the fiduciary pays known debts and funeral expenses from estate funds, then distributes the remainder according to the will or intestate rules. To close, the fiduciary files a final report with receipts from each person who received a distribution.
Creditor Claims and How Debts Get Paid
After appointment, the executor or administrator must publish a “Notice to Creditors” in a local newspaper. Creditors whose debts existed before the death then have four months from the date of first publication to file a claim. If notice is never published, creditors have a full year from the date of death. Medicaid claims from the State of Vermont follow the four-month deadline from publication regardless of when the estate was opened.14Vermont General Assembly. Vermont Code 14 V.S.A. 1203 – Limitations on Presentation of Claims These deadlines do not affect secured debts like mortgages, claims covered by liability insurance up to the policy limits, or tax obligations, which run on their own timelines.
When an estate cannot pay everyone, debts are paid in this order:15Vermont General Assembly. Vermont Code 14 – Settlement of Claims
- Administrative costs, including court fees and attorney fees.
- Reasonable funeral, burial, and headstone costs (capped at $3,800 excluding government payments) and medical expenses from the final illness.
- Employee wages earned in the three months before death, up to $300 per claimant.
- All other claims, including any wages above the $300 priority cap, sharing equally in what remains.
Beneficiaries receive nothing until valid creditor claims in these tiers are satisfied. An executor who distributes to heirs before addressing debts properly can be held personally liable for the unpaid claims.