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Vermont Living Trust Forms – Irrevocable & Revocable

The Vermont living trust is an written agreement created by someone in order to protect their assets while they’re living, or mentally incapacitated, and to avoid probate after death. The probate process in Vermont is not as complicated as some states, as it does not follow the Uniform Probate Code, but bypassing probate can still save money and time. The Grantor (creator of the agreement) appoints a Trustee (usually themselves) to control their assets in the trust for their continued use until the Grantor passes away. Property, funds, and other assets in the trust can be altered or reclaimed at any point unless the Grantor has set up an irrevocable living trust. After death, the appointed Successor Trustee will distribute the assets to the Beneficiaries outside of probate court.

LawsTitle 14A (Trusts)

Will (Last Will and Testament) – The contents of a will, unlike a living trust, are made public record once the executor dies and will be distributed accordingly in probate. Assets not included in a living trust should be included in a will to state where or to whom those assets are to be distributed.

Types

Irrevocable – Once created, an irrevocable living trust cannot be edited and all property within the trust are no longer under the Grantor’s ownership. This can be beneficial as the value of assets within the trust are not included when calculating a Grantor’s estate at the time of death.

Revocable – The benefits of a revocable trust is they can be amended at any point during the Grantor’s lifetime and the Grantor maintains ownership. On the other hand, this means the assets aren’t protected from creditors and claimants and will be included in the total value of property once the Grantor dies.

Individual Roles

Grantor (or Settlor)- Person who creates the agreement and appoints individual roles within the trust.

TrusteePerson in charge of managing the trust. Usually the Grantor is also the Trustee, although this is not possible with an irrevocable trust.

Successor Trustee – Person who takes control over the trust once the Grantor dies or if they become mentally incompetent (if the Grantor and Trustee are one in the same.)

Beneficiaries – Persons benefiting from assets within the trust (Grantor can name themselves a beneficiary, but not the sole beneficiary) once the Grantor dies.

How to Make a Living Trust in Vermont

In accordance with 14A V.S.A. § 402, a Grantor must be mentally competent when creating a living trust. The trust must have a Trustee to manage, invest, and distribute assets within the trust and Beneficiaries to which the assets within the trust will be distributed upon death of the Grantor. It is recommended that the Grantor sign the trust agreement in front of a notary public in Vermont. Once the document is signed, the transferring of assets into the trust can take place.

Real Estate – It will behoove the Grantor to place all property in their living trust. To do so, ownership must be transferred from the Grantor to the trust using either a Vermont General Warranty Deed or a Vermont Quit Claim Deed.

Stocks and Bonds – In some cases, specific instructions or forms for transferring stocks and bonds into a trust will be provided by the issuer of the financial instrument. Part of the transferring process will include creating new stock certificates in the name of the trust and establishing a brokerage account as a depository for publicly-held stock.

Motor Vehicles – Transferring ownership of a vehicle to a living trust will require a Vermont Bill of Sale Form.

Do I Need a Living Trust in Vermont?

The main purpose of a living trust is to protect one’s assets, and this can be accomplished with an irrevocable trust. All assets transferred into an irrevocable trust will no longer be owned by the Grantor, but will be protected from estate taxes and from creditors and lawsuits. Both types of living trusts allow for the Trustee, or Successor Trustee, to distribute assets to the Beneficiaries outside of probate. In addition, the process remains private and out of the public record.

A living trust might not be necessary for everyone, and avoiding probate isn’t always a better option. For young couples or those with small estates, a living trust can end up costing more than probate in the long run. The Small Estate law in Vermont allows heirs to inherit property without probate, or at the very least more quickly and at a lower cost, if the property is valued at $10,000 or less. A Vermont Small Estate Affidavit Form should be completed for a judge’s approval.

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