“Estate” is the legal term for an individual’s personal property, financial property, and real estate. Estate planning is the process of ensuring that an individual’s property is distributed according to their wishes upon their passing. Comprehensive estate planning should establish heirs and determine who gets what, minimize taxes, and result in as few delays as possible along the way. 

State and federal taxation of a decedent’s estate is a complex and constantly-evolving process. If you wish to avoid lengthy delays and the payment of excess taxes, it is in your best interest to work with an experienced estate planning lawyer. 

To create a thorough estate plan that aligns with your unique needs and objectives, a Vermont estate planning attorney will thoroughly review your personal and family circumstances, financial picture, and overall goals, and determine your wishes for how the estate should be distributed upon your passing. This part of the process will likely involve the creation of a last will and testament, and possibly a trust. 

Your estate plan should also detail your wishes should you become incapacitated before death. A will determines how assets are distributed after you’ve passed away, but a health care directive and power of attorney ensure that medical and financial decisions are made in accordance with your wishes while you are still alive, if disability or incapacitation renders you unable to do so. This part of the estate planning process is crucial even for individuals with extremely small estates. Don’t leave decisions about your health and finances up to chance, or in the hands of someone who doesn’t know your wishes.

The documents required for your estate plan will depend on your individual circumstances, but some of the most common estate planning documents include: 

A last will and testament outlines your wishes about how your estate will be distributed upon your passing. In order for a will to be considered valid, it must be completed and executed in a certain manner, in the presence of witnesses, and you must have the requisite capacity and understanding to make the will. If you die in Vermont without a will (called dying intestate), distribution of assets is determined by statute. 

Upon your passing, the individual who has been named executor of the will must first ensure that any taxes and outstanding debts are paid before distributing assets to the named beneficiaries. 

Your will can also include clauses for the guardianship of any minor children, in the event that you die before the children turn 18. 

A power of attorney is a document that gives authority to one or more individuals to represent your interests with regard to financial and personal decisions and transactions. This authority can be extremely broad, or it can be limited to only certain transactions. A power of attorney only remains in effect during your lifetime, and you can revoke it at any time. 

Having a power of attorney in place is one of the most critical aspects of a comprehensive estate plan. If you become incapacitated or develop a disability that renders you unable to make health care and financial decisions on your own, having a power of attorney will prevent lengthy court proceedings, and the possibility of decisions being made against your wishes. 

In Vermont, your health care directives are an Advance Directive and a DNR/COLST (Do Not Resuscitate/Clinical Orders for Life Saving Treatment). In the event that you are unable to make health care decisions on your own, you can assign authority to another person to make these very important decisions on your behalf. You can choose to accept or refuse life saving measures, or any type of medical care, and these wishes should be thoroughly discussed with your chosen representative(s) to ensure that decisions are made in your best interest. We regularly assist clients with these documents, but they are also available to anyone for free on the Vermont Health website and Advance Directive Registry. (Insert hyperlink: https://www.healthvermont.gov/systems/advance-directives )

By the enactment of the Enhanced Life Estate Deed Act (27 V.S.A. §651 et seq.), Vermonters have available to them an additional estate planning tool for their homestead property that provides the same protections of a revocable living trust plus the added benefit of effective Medicaid planning. Through an Enhanced Life Estate Deed (ELE Deed), you have the ability to transfer your homestead property to family members (typically the homeowners’ grown children) by way of a contingent remainder interest with a reserved life estate for you (and your spouse/partner) to continue to reside on and have full use, enjoyment and control of the property for the remainder of your natural lives. Effectively a transfer-on-death disposition, the grantees (e.g. your children) will not officially own the property until the contingency occurs upon your death, so they have no control or liability associated with the property during your lifetime. An ELE Deed will avoid probate and protect your homestead from Medicaid in the event you require long-term care in your later years. Our team of attorneys have extensive experience in ELE Deed planning and can help you protect your home.

Trusts are not reserved for the rich. A trust is used to hold assets for the benefit of another person, essentially transferring ownership from one person to another. The beneficiary can also be a charity or a bank. You may wish to create a trust for an adult child with special needs, or a grandchild, until they are old enough to handle the funds responsibly. 

You may also use a trust to reduce the size of your estate, thus reducing estate taxes, and you may serve as both grantor and trustee. In these situations, you will name a successor trustee, who will take control of the trust if you become incapacitated, or upon your passing. 

There are myriad reasons for creating a trust, and many different types of trusts. Revocable trusts are easy to setup and manage, while irrevocable trusts offer greater protection against creditors and lawsuits. An experienced estate planning lawyer can help you determine if a trust will benefit you and your family. 

If you have estate planning needs, the legal team at Darby Kolter & Roberts, LLP can help. Whether you wish to create a will or trust, update a living will, or need help with Medicaid planning, our estate planning attorneys have the knowledge and experience to guide you through the process. Contact us today for a confidential consultation about your case.