The 12 Most Common
Vermont Estate Planning Mistakes
(And How to Avoid Every One of Them)
Introduction
Estate planning is not a one-time event — it is an ongoing process that must evolve with your life, your family, and the law. Vermont attorneys who handle estates and probate repeatedly see the same preventable mistakes derail even the best of intentions. These errors range from a complete failure to plan, to technical drafting flaws, to the fatally common mistake of creating a trust and then never funding it.
Each mistake on this pageis described with: (1) what the mistake is and why it matters under Vermont law, (2) the specific legal consequence that flows from it with statute citations, and (3) the concrete fix. The governing authorities are Title 14 V.S.A. (Decedents' Estates and Fiduciary Relations) for wills and probate, and Title 14A V.S.A. (the Vermont Trust Code) for trusts.
The 12 Mistakes This Guide Covers
1. Mistake #1: Having no estate plan at all
2. Mistake #2: A will that does not meet Vermont's formal requirements
3. Mistake #3: Failing to update your plan after major life changes
4. Mistake #4: Outdated or missing beneficiary designations
5. Mistake #5: Creating a trust but never funding it
6. Mistake #6: No durable power of attorney or healthcare directive
7. Mistake #7: Ignoring the surviving spouse's elective share
8. Mistake #8: Choosing the wrong executor or trustee
9. Mistake #9: Failing to plan for incapacity
10. Mistake #10: No plan for digital assets
11. Mistake #11: Waiting too long for Medicaid planning
12. Mistake #12: Not reviewing the plan regularly
MISTAKE #1: Having No Estate Plan At All
This is the most common—and most consequential—estate-planning mistake in Vermont. More than half of American adults lack wills, trusts, or estate-planning documents. When a Vermont resident dies without any plan, the state steps in and makes every decision for them through its intestate succession laws.
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⚠ THE MISTAKE If you die without a valid will in Vermont, you are said to have died ‘intestate.' Vermont's intestacy statutes determine who inherits your assets, in what shares, and who administers your estate — regardless of your actual wishes, your relationships, or your promises to loved ones. |
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⚖ STATUTE: 14 V.S.A. § 301 — Intestate Estate Any part of a decedent's estate not effectively disposed of by will passes by intestate succession to the decedent's heirs as set forth in §§ 301–338. The distribution follows legal relationships only — not emotional ones. |
What Vermont's Intestacy Law Does with Your Estate
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Your Situation at Death |
Who Vermont Law Gives Your Estate To |
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Married, no children |
Spouse inherits everything (§ 311(1)) |
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Married, children with spouse |
Spouse inherits everything (§ 311(1)) |
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Married, children from prior relationship |
Spouse and those children split 50/50 (§ 311(2)) |
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Single with children |
Children inherit everything equally |
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Single, no children |
Parents inherit everything |
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Domestic partner (unmarried) |
Partner inherits nothing — zero, regardless of relationship length |
See 14 V.S.A. § 314 for a complete list of intestate succession.
Intestacy law cannot: (1) name a guardian for your minor children; (2) leave assets to a domestic partner, stepchild, or close friend; (3) create a trust for a child with disabilities; (4) express your charitable wishes; or (5) specify your funeral preferences. Only a valid estate plan can do these things.
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✔ THE FIX Execute at minimum a will, durable power of attorney, and healthcare directive. For estates with real estate or other substantial assets, consider a revocable living trust. These documents can be prepared by a Vermont estate planning attorney and should be done well before they are needed. |
MISTAKE #2: A Will That Does Not Meet Vermont's Formal Requirements
A handwritten note, an email, a voice memo, or a downloaded template that does not meet Vermont's execution requirements is not a valid will. Vermont courts have refused to probate documents that clearly expressed the decedent's wishes but failed the technical requirements of the statute.
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⚖ STATUTE: 14 V.S.A. § 5 — Formal Execution Requirements A valid Vermont will must be: (1) in writing; (2) signed by the testator or by someone else at the testator's direction and in their presence; and (3) attested and subscribed by two or more credible witnesses in the presence of the testator and each other. 14 V.S.A. § 1 additionally requires the testator to be at least 18 years old and of sound mind at the time of execution. |
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⚠ THE MISTAKE Vermont does NOT recognize holographic (handwritten, unwitnessed) wills unless they were executed in a jurisdiction that recognizes them (14 V.S.A. § 112). Vermont does NOT allow oral or electronic wills. A handwritten document expressing your wishes, no matter how clear, is not a valid Vermont will without two witnesses. |
Additionally, under 14 V.S.A. § 319, if you marry after making a will and your spouse is not provided for in the will, your surviving spouse retains the right to their statutory share.
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✔ THE FIX Have your will drafted or reviewed by a licensed Vermont attorney, then sign it in the presence of two credible witnesses who also sign in your presence and in each other's presence. |
MISTAKE #3: Failing to Update Your Estate Plan After Major Life Changes
A will or trust created 15 years ago reflects who you were 15 years ago. Vermont law automatically addresses some life changes — but not all of them — and the gaps can produce results the testator never intended.
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⚖ STATUTE: 14 V.S.A. § 320 — Effect of Divorce on a Will A final divorce or dissolution order from any state nullifies a gift by will to a former spouse and any nomination of the former spouse as executor, trustee, guardian, or other fiduciary named in the will — unless the will specifically states to the contrary. Vermont law handles the ex-spouse problem for wills, but not necessarily for beneficiary designations on retirement accounts, life insurance, or trusts. |
Life Events That Require an Estate Plan Update
• Marriage or civil union — your new spouse has statutory rights that may conflict with an existing will
• Divorce or separation — while § 320 revokes testamentary gifts to an ex-spouse, beneficiary designations are NOT automatically changed
• Birth or adoption of a child
• Death of a named beneficiary, executor, or trustee
• Significant change in assets (purchase/sale of real estate, inheritance, business interest)
• A beneficiary develops a disability — a direct inheritance may disqualify them from Medicaid or SSI
• Relocation from or to Vermont — different states have different rules
• Change in relationship with a named guardian, executor, or trustee
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⚠ THE MISTAKE The automatic divorce revocation under § 320 applies only to the will — NOT to beneficiary designations on life insurance, IRAs, 401(k)s, or payable-on-death bank accounts. An ex-spouse who is still named as beneficiary on a life insurance policy will receive those proceeds regardless of what your will says. |
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✔ THE FIX Review your entire estate plan — will, trust, beneficiary designations, powers of attorney, and healthcare directives — after every major life event and at least every three to five years. Treat beneficiary designations as part of your estate plan: they are often the most valuable documents you own. |
MISTAKE #4: Outdated or Missing Beneficiary Designations
Beneficiary designations on life insurance, IRAs, 401(k)s, 403(b)s, and payable-on-death (POD) bank accounts are among the most powerful documents in any estate plan — and among the most neglected. These designations pass assets directly to named individuals at death, completely outside of probate and coy will or trust.
Because they are non-probate transfers, beneficiary designations are not governed by your will or Vermont's intestacy statutes. They are governed by the terms of the account agreement and federal law (for IRAs and qualified retirement plans). The result: a 20-year-old beneficiary designation on a $400,000 IRA will control, even if your will says otherwise.
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⚠ THE MISTAKE Common disasters caused by outdated beneficiary designations: • An ex-spouse receives the entire life insurance payout because the divorce decree did not also change the policy designation. • A deceased beneficiary's share of a retirement plan passes to the account's contingent beneficiary — or, if none exists, directly into your probate estate where it loses all tax-deferred treatment. • A person with special needs receives a direct inheritance, disqualifying them from Medicaid and SSI. • A minor child receives a large sum directly, requiring the Probate Division to appoint a guardian of property under 14 V.S.A. Ch. 111. |
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✔ THE FIX Inventory every account, insurance policy, and retirement plan you own. Verify the named primary AND contingent beneficiaries. Update them to align with your current wishes and estate plan. If leaving assets to a minor or a person with disabilities, name a trust as beneficiary rather than the individual directly. Review these designations whenever you review your will. |
MISTAKE #5: Creating a Trust but Never Funding It
This is the single most common trust mistake Vermont attorneys encounter. A couple spends hours with an attorney, pays to have a beautiful revocable living trust drafted, signs it at the closing, and then never transfers a single asset into it. The trust sits in a drawer, an empty legal shell that does nothing.
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⚖ STATUTE: 14A V.S.A. § 401 — Methods of Creating a Trust A trust is created by a transfer of property to another person as trustee, or by a self-declaration in which the owner of property declares themselves trustee. Without property being transferred into the trust, there is no funded trust — and therefore no probate avoidance, no incapacity protection, and no administration benefit. |
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⚠ THE MISTAKE An unfunded revocable living trust does not avoid probate. If your home, bank accounts, and investment accounts remain titled in your individual name at death, those assets go through Vermont's full probate process — even with a signed trust sitting in your filing cabinet. |
What “Funding” a Trust Requires
• Record a deed conveying the property from you individually into the trust.
• Re-title checking and savings accounts in the name of the trust, or designate the trust as the payable-on-death beneficiary.
• Transfer brokerage accounts into the trust's name through your financial institution.
• Name the trust as the beneficiary (consult a tax advisor for retirement plans, as there are specific rules).
• Vermont motor vehicles can be transferred, but are often left out for practical reasons.
Under 14A V.S.A. § 1013, a trustee may provide a Certification of Trust to financial institutions and title companies — a summary document that proves the trust's existence and the trustee's authority without disclosing the full trust instrument. This makes funding far less burdensome than many people expect.
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✔ THE FIX Work with your attorney and financial advisor immediately after signing your trust to complete a funding checklist. Do not leave the attorney's office without a clear action plan for transferring each major asset class. Any real estate should have a deed prepared and recorded as part of the trust signing process, not as a later afterthought. |
MISTAKE #6: No Durable Power of Attorney or Healthcare Directive
Most people think of estate planning as planning for death. But a complete Vermont estate plan also plans for incapacity — the period during which you are alive but unable to manage your own affairs. Without the right documents, your family faces a court-supervised guardianship process to make even basic financial and healthcare decisions.
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⚖ STATUTE: 14 V.S.A. Ch. 127 — Vermont Uniform Power of Attorney Act (eff. July 1, 2023) A durable power of attorney allows a principal to designate an agent to manage financial and legal affairs. Under § 4001, a power of attorney is ‘durable' if it contains language indicating it remains effective even if the principal becomes incapacitated. Without the word ‘durable,' a traditional power of attorney terminates automatically upon the principal's incapacity — exactly when it is needed most. Certain powers require express authorization in the POA document, including: creating or amending trusts (§ 4031(1)), making gifts (§ 4031), and exercising authority over digital assets (Ch. 125). A general grant of authority does not automatically include these powers. |
For healthcare decisions, Vermont law allows individuals to appoint a healthcare agent through an Advance Directive (formerly called a Durable Power of Attorney for Health Care under 14 V.S.A. Ch. 121). This document authorizes your agent to make medical decisions — including end-of-life decisions — when you cannot make them yourself. Without it, healthcare providers may be forced to follow default rules that may not reflect your wishes.
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⚠ THE MISTAKE If you become incapacitated without a valid durable power of attorney and/or a Vermont Advance Directive, a family member must petition the Vermont Probate Division to be appointed your guardian under 14 V.S.A. Ch. 111. This is a public court proceeding that can take months, cost thousands of dollars, and require ongoing court supervision — all of which can be avoided with a simple document signed while you have capacity. |
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✔ THE FIX Every Vermont adult over 18 should have: (1) a Vermont Durable Power of Attorney under 14 V.S.A. Ch. 127, specifying your agent and the scope of authority; and (2) a Vermont Advance Directive naming a healthcare agent and expressing your healthcare wishes. |
MISTAKE #7: Ignoring the Surviving Spouse's Elective Share
Vermont law protects surviving spouses from being disinherited. Many Vermonters — especially those in second marriages with children from prior relationships — create estate plans that attempt to leave everything to their children from a first marriage, not realizing that the surviving spouse has a statutory right to override the will.
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⚖ STATUTE: 14 V.S.A. § 319 — Elective Share of Surviving Spouse A surviving spouse may elect to waive the provisions of the decedent's will and instead take one-half of the balance of the probate estate, after payment of allowances, claims, and expenses. The election must be filed in writing within four months of the later of: (a) service of the notice of the surviving spouse's rights, or (b) appointment of the personal representative. Note: The court must serve the surviving spouse a notice of rights within 30 days of the filing of the initial estate inventory (§ 319(e)(1)). |
Vermont also prohibits deathbed transfers designed to defeat the elective share. Under 14 V.S.A. § 321, a voluntary transfer of property during marriage, made without adequate consideration and for the primary purpose of defeating the surviving spouse's elective or intestate share, is void — unless the spouse waived their rights under § 323.
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Planning Scenario |
Risk / Consequence |
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Will leaves everything to children, nothing to spouse |
Spouse can elect against the will and take 50% of net probate estate (§ 319) |
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Transferring assets to an irrevocable trust to cut out spouse |
Fraudulent-transfer rule under § 321 may void the transfer |
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Prenuptial agreement waiving elective share |
Valid only if executed under § 323 with proper formalities and consideration |
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Properly funded living trust for children |
Assets in trust may still be reachable if transfer was fraudulent under § 321 |
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✔ THE FIX If you are in a second marriage with children from a prior relationship, your estate plan must carefully balance the interests of your surviving spouse against those of your children. This often requires a qualified terminable interest property (QTIP) trust or other structured arrangement. Do not attempt this without an experienced Vermont estate planning attorney. |
MISTAKE #8: Choosing the Wrong Executor or Trustee
The executor (called the personal representative in Vermont) and trustee are the people who actually carry out your estate plan. Choosing the wrong person — out of family loyalty, obligation, or inertia — is one of the most common and most damaging estate planning mistakes.
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⚖ STATUTE: 14 V.S.A. § 903 — Priority of Administrator Appointment When no will exists, priority for appointment as administrator goes to: (1) surviving spouse; (2) next of kin; (3) creditors; (4) any other person in the court's discretion. When a will names an executor, that person has priority — but the court must still formally appoint them. |
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⚖ STATUTE: 14A V.S.A. § 706 — Removal of Trustee The Probate Division of the Superior Court may remove a trustee for: serious breach of trust; lack of cooperation among co-trustees that substantially impairs administration; unfitness or persistent failure to administer effectively; or where removal best serves the interests of the beneficiaries. |
Warning Signs You Have the Wrong Person
• They live far away and cannot travel easily to Vermont to handle practical matters
• They have a history of financial difficulty, addiction, or conflict with other beneficiaries
• They are the same age as you, creating risk of simultaneous incapacity
• They have never agreed to serve, or were named decades ago without re-confirmation
• Their relationship with the beneficiaries is contentious
• The estate is complex but the person has no financial, legal, or administrative background
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✔ THE FIX Choose your executor and trustee based on competence, character, and availability — not family hierarchy. Always name at least one alternate. For complex estates or family conflict situations, consider naming a professional fiduciary (a licensed trust company or bank trust department) as sole trustee or co-trustee. Discuss the role with your chosen person before naming them, and confirm their willingness every few years. |
MISTAKE #9: Failing to Plan for Incapacity
Estate planning is not just about what happens after you die — it is also about what happens if you become unable to manage your own affairs while still alive. Illness, accident, or cognitive decline can strike at any age. Without incapacity planning documents, your family faces a lengthy, expensive, and public court process.
Vermont's guardianship process under 14 V.S.A. Ch. 111 requires a court petition, medical evidence of incapacity, appointment of a guardian, and ongoing court supervision. The guardian must file reports with the Probate Division annually and obtain court approval for significant financial decisions. This process can cost thousands of dollars and takes months — during which your finances may be frozen and your family unable to pay your bills.
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⚠ THE MISTAKE A revocable living trust provides seamless incapacity protection: your successor trustee can step in immediately, without any court involvement, to manage trust assets. But the trust must be funded — see Mistake #5. Assets outside the trust (including any property left in your individual name) are still subject to the guardianship process if you become incapacitated. |
The Three Documents Every Vermont Adult Needs for Incapacity
1. Durable Power of Attorney (14 V.S.A. Ch. 127): Authorizes an agent to manage financial and legal matters if you cannot.
2. Vermont Advance Directive: Names a healthcare agent and expresses your healthcare wishes, including end-of-life decisions.
3. Funded Revocable Living Trust (14A V.S.A. § 602): Allows your successor trustee to manage trust assets immediately upon your incapacity, without court involvement.
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✔ THE FIX Do not wait until you are sick to execute incapacity documents. Vermont law requires capacity at the time of signing — if you wait too long, you may lose the legal ability to execute these documents at all. Once you lack capacity, only a guardianship petition can give another person authority to act for you. |
MISTAKE #10: Failing to Plan for Digital Assets
Modern estate planning must account for digital assets: email accounts, social media profiles, online financial accounts, cryptocurrency, digital photographs, subscription services, and more. Without explicit planning, your executor and trustee may be legally unable to access these accounts, even with the best of intentions.
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⚖ STATUTE: 14 V.S.A. Ch. 125 — Vermont Revised Uniform Fiduciary Access to Digital Assets Act Vermont enacted this Act to give fiduciaries (executors, trustees, and agents under a power of attorney) access to a decedent's or incapacitated person's digital assets. However, access is not automatic: the user must have expressly authorized disclosure during their lifetime, either through an online tool provided by the custodian or through a will, trust, or power of attorney. |
Under 14 V.S.A. § 3554, a user may use an online tool (such as Google's Inactive Account Manager or Facebook's Legacy Contact) to direct what happens to their digital assets. If no online tool direction exists, the user may authorize disclosure in a will, trust, or power of attorney. Critically, a direction using an online tool overrides a contrary direction in a will or trust — so the online tool settings take precedence.
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⚠ THE MISTAKE Without explicit authorization, your executor may be legally prohibited from accessing your email, managing your online accounts, or liquidating cryptocurrency — even if you die with a detailed will and funded trust. Federal privacy laws (including the Electronic Communications Privacy Act, 18 U.S.C. § 2701) limit access regardless of what your will says, unless you authorized disclosure during your lifetime. |
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✔ THE FIX Create a digital asset inventory: list all online accounts, usernames, and where your passwords are securely stored (use a password manager). Expressly authorize your executor, trustee, and agent under your power of attorney to access digital assets (cite Ch. 125 in each document). Set up legacy contact or inactive account settings on major platforms. For cryptocurrency, document wallet addresses and private key access procedures. |
MISTAKE #11: Waiting Too Long for Medicaid / Long-Term Care Planning
Vermont's Medicaid program will pay for nursing home care only after you have spent down most of your assets to very low levels. Without proactive planning, a spouse's life savings — accumulated over decades — can be consumed by nursing home costs before Medicaid coverage begins. The time to plan is years before you need care, not the week of admission.
The core challenge is Medicaid's 60-month (5-year) look-back period for institutional (nursing home) care. Any assets transferred for less than fair market value within the five years before a Medicaid application trigger a penalty period during which Medicaid will not pay for care. The penalty is calculated by dividing the total improper transfer amount by Vermont's average daily nursing home cost.
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⚠ THE MISTAKE A revocable living trust provides zero Medicaid protection. Because you retain the right to revoke the trust, all trust assets are counted as available resources for Medicaid. Only a properly structured irrevocable trust, created more than five years before applying for Medicaid, can provide meaningful protection. Vermont Medicaid is governed by federal law (42 U.S.C. § 1396p) and Vermont Agency of Human Services regulations — not by the Vermont Trust Code. The rules are complex and change frequently. Always work with both a trust attorney and a Medicaid planning specialist. |
Medicaid Planning Tools Under Vermont Law
• Must be funded more than 5 years before applying for benefits; properly structured.
• Vermont Medicaid allows the community spouse to retain a ‘community spouse resource allowance' and a minimum monthly maintenance needs allowance.
• A deed authorized under 27 V.S.A. Ch. 6; allows real property to pass at death without triggering the look-back period in most cases.
• Federal Medicaid rules allow a transfer of the home to an adult child who lived there and provided care for at least 2 years.
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✔ THE FIX If you or a loved one is in their 60s or has a family history of cognitive decline, begin Medicaid planning now — not when nursing home placement is imminent. A five-year head start can protect the majority of your assets. Work with an elder law attorney who specializes in Vermont Medicaid planning. |
MISTAKE #12: Not Reviewing Your Plan Regularly
Even a perfectly drafted estate plan becomes outdated. Laws change, relationships change, assets change, and tax thresholds change. A will drafted in 2010 reflects the law, your assets, and your family as they were in 2010 — not as they are in 2026. The failure to review and update is itself an estate planning mistake.
Vermont estate planning law has changed significantly in recent years. The Vermont Trust Code (14A V.S.A.) was enacted in 2009. The Vermont Uniform Power of Attorney Act (14 V.S.A. Ch. 127) became effective July 1, 2023. The Uniform Directed Trust Act (14A V.S.A. Ch. 13) became effective May 13, 2024. The Vermont Revised Uniform Fiduciary Access to Digital Assets Act (14 V.S.A. Ch. 125) was enacted in 2017. Plans predating these laws may miss important protections and opportunities.
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Review Trigger |
Priority Level |
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Marriage, divorce, or new civil union |
Immediate — update now |
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Birth or adoption of a child or grandchild |
Immediate — update now |
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Death of a named executor, trustee, or beneficiary |
Immediate — update now |
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Major change in assets (real estate, retirement) |
Within 90 days |
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A beneficiary develops a serious disability |
Within 90 days — may need special needs trust |
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Move to or from Vermont |
Within 90 days — state laws vary significantly |
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Routine review — no triggering event |
Every 3–5 years minimum |
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Major change in federal or Vermont estate tax law |
Consult attorney immediately |
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✔ THE FIX Set a recurring calendar reminder every three years to schedule an estate plan review with your attorney. Treat your estate plan like a tax return: something that must be actively maintained, not just filed and forgotten. The cost of a review is a fraction of the cost of fixing a problem after death. |
Quick Reference: 12 Mistakes and Their Governing Statutes
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Mistake |
Core Risk |
Key Vermont Statute(s) |
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#1: No estate plan |
Intestate distribution, no guardian named |
14 V.S.A. §§ 301–338 |
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#2: Invalid will |
Will rejected by Probate Division |
14 V.S.A. §§ 1, 5, 108 |
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#3: Outdated plan |
Divorced spouse provisions, omitted children |
14 V.S.A. §§ 320, 555 |
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#4: Bad beneficiary designations |
Ex-spouse or wrong person receives assets |
Non-probate law; coordinate with estate plan |
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#5: Unfunded trust |
Trust does not avoid probate |
14A V.S.A. §§ 401, 1013 |
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#6: No POA or healthcare directive |
Court guardianship, frozen finances |
14 V.S.A. Ch. 127; 14 V.S.A. Ch. 121 |
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#7: Elective share ignored |
Spouse overrides will and takes 50% |
14 V.S.A. §§ 319, 321 |
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#8: Wrong executor/trustee |
Mismanagement, breach of duty, litigation |
14 V.S.A. § 903; 14A V.S.A. § 706 |
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#9: No incapacity plan |
Guardianship proceedings, frozen assets |
14 V.S.A. Ch. 111; 14A V.S.A. § 602 |
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#10: No digital asset plan |
Executor cannot access accounts, crypto lost |
14 V.S.A. Ch. 125 (§§ 3551–3568) |
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#11: Late Medicaid planning |
5-year look-back destroys asset protection |
42 U.S.C. § 1396p; VT AHS regulations |
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#12: No regular review |
Outdated plan fails to reflect law or life |
All of the above |
For personalized advice on estate planning, including strategies to minimize or avoid probate, contact Will and Trust Planning today. Our experienced estate planning attorneys can answer your questions, help you understand your options, draft essential documents, and create a plan that protects your assets and achieves your goals.
About This Guide
This page was prepared to help Vermont residents identify and understand the most common estate planning mistakes, with direct references to Vermont statutes. It is current as of March 28, 2026, reflecting statutes through the 2025 session of the Vermont General Assembly.
Primary authorities: Title 14 V.S.A. (Decedents' Estates and Fiduciary Relations) and Title 14A V.S.A. (Vermont Trust Code). Available at: legislature.vermont.gov/statutes/title/14 and /title/14A
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⚠ DISCLAIMER This page is for general informational and educational purposes only. It does not constitute legal advice and does not create an attorney-client relationship. Laws change — always verify statute citations before relying on them. Consult a licensed Vermont attorney for advice specific to your situation. |
