Living Trust vs Will in Vermont: Which One Do You Actually Need?

A Vermont attorney quotes you $900 for a revocable living trust package. Your neighbor says a simple will is fine. Your sister insists you need both. Everyone has an opinion, and none of them agree.

Here is what actually matters in Vermont: what happens to your assets when you die, how long your family waits, and how much they pay to get there.

What a Will Does in Vermont

A Last Will and Testament under 14 V.S.A. § 5 is the foundational document. It names your executor, distributes your property, and — critically — nominates guardians for minor children. No other document can do that last part.

The catch: every will must go through Vermont's probate process. The Probate Division of the Superior Court supervises the administration, which typically takes six to eighteen months. The process is public, meaning anyone can look up what you owned and who got it.

Vermont requires two credible, disinterested witnesses for a valid will. No electronic wills. No oral wills. A handwritten will only works if it meets the exact same witness requirements as a typed one.

What a Revocable Living Trust Does

A revocable living trust under the Vermont Trust Code (Title 14A) holds your assets during your lifetime. You serve as your own trustee, maintain full control, and name a successor trustee who takes over at death or incapacity — with zero court involvement.

Assets properly titled in the trust skip probate entirely. No six-month wait. No public inventory filing. No court supervision fees.

The problem: a trust only works for assets you actually transfer into it. This process, called "funding," requires deeding real property to the trust, retitling bank accounts, and updating beneficiary designations. An unfunded trust is an expensive piece of paper.

For real property, funding means drafting and recording a deed with the town clerk in the municipality where the property sits — Vermont has no county-level registry. Recording fees run about $15 per page plus a mandatory Property Transfer Tax Return.

When Vermont Families Don't Need a Trust

For most moderate estates in Vermont, a will paired with targeted non-probate transfers achieves the same practical result as a trust at a fraction of the cost:

• Enhanced Life Estate Deed (Lady Bird Deed): Transfers your home or family camp directly to your heirs at death, outside probate. You keep full control — sell, mortgage, or revoke at any time without your children's consent. Under current Department of Vermont Health Access rules, an ELED does not trigger a Medicaid lookback penalty.

• Payable on Death (POD) bank accounts: Name a beneficiary on your bank accounts. Funds transfer immediately at death, no probate.

• Transfer on Death (TOD) vehicle registrations: Designate a beneficiary on your vehicle title using DMV Form VT-007. The vehicle passes outside probate for a $35 title fee.

If your estate is under $5 million (Vermont's flat estate tax threshold), your home is your biggest asset, and your family situation is straightforward, this combination handles everything a trust would — for the cost of recording one deed.

When You Genuinely Need a Trust

A revocable living trust earns its cost in specific situations:

• Multiple real properties across municipalities. Each property needs its own deed recorded at a different town clerk's office. A trust consolidates everything under one instrument.
• Privacy concerns. Probate inventories are public records in Vermont. A trust keeps asset details private.
• Incapacity planning. A funded trust provides seamless management if you become incapacitated — no guardianship proceeding required.
• Estates near or above $5 million. A Credit Shelter Trust (also called a bypass trust) preserves both spouses' $5 million state estate tax exemptions. Vermont's exemption is not portable — if a spouse dies without using theirs, it's gone.

The Bottom Line

Most Vermont households with moderate assets don't need a $900 trust. A properly executed will under 14 V.S.A. § 5, combined with a Lady Bird Deed and beneficiary designations, provides probate avoidance and Medicaid protection at a fraction of the cost.

The Vermont Basic Estate Planning Kit walks you through both paths — helping you decide which combination fits your family and guiding you through every filing step.

See more Vermont guides →