Vermont

Individual Income Tax

Vermont has a state income tax, structured as a progressive tax on income.

Tax rates range from 3.35% - 8.75%.

Estate

Common Law State

Inheritance Tax

Vermont does not impose an inheritance tax.

Credit Estate Tax

In 2025, Vermont has an estate tax exemption amount of $5,000,000 and a tax rate of 16% on the estate above the exemption amount.

Generation Skipping Transfer Tax (GST Tax)

Vermont imposes a GST tax equal to the maximum credit permitted for paid GST tax under the federal code in effect on January 1, 2001.

Gift Tax

Vermont does not impose a gift tax.

Will Creation

The minimum age of a person competent to make a will is 18.

The number of witnesses necessary to execute a will is two.

Uniform Gifts to Minors Act (UGMA)

The original custodial gift may be a life insurance policy or annuity contract on (1) the minor's life if the minor's estate is the beneficiary, or (2) the life of any of the minor's parents, grandparents, siblings, aunts and uncles, including relationships by the whole blood, half blood, or adoption, provided the custodian is the designated beneficiary.

The statute does not specifically authorize the use of custodial property to purchase a new policy, but custodial property apparently may be used to pay premiums on an original policy transferred to the custodianship.

The custodial arrangement terminates when the minor turns age 18 (or upon the death of the minor).

Intestacy

For important general information about the following material, click here.

 Each state describes its own distribution pattern of how property passes to a decedent's spouse, children, parents and siblings. If no such individuals are living, state laws specify other takers among more distant ancestors before awarding property to the state through "escheat" provisions. We do not trace devolution of property beyond those noted above, but cite appropriate statutes for those interested in additional detail.

 Many states refer to their distribution regime by simply stating that the heirs of predeceased individuals take "by representation." We use only the statutory verbiage, but may cite other statutory guidance when it exists.

 States vary in the way they refer to descendants, using such terms as "issue" or simply children or grandchildren. We use the term "descendant," unless usage of different term adds clarity.

 Some states address situations where misconduct or abuse causes forfeiture of a right to receive a share of the estate. Those interested in this information should see the state statutes.

The estate goes to the surviving spouse, as follows:

 If there are no surviving descendants—100% of the estate

 If all surviving descendants are also descendants of the spouse—100% of the estate

 If one or more descendants are not descendants of the surviving spouse—50% of the estate

If there is no surviving spouse, or if a portion of the estate does not go to the spouse:

 100% to surviving descendants by right of representation (which is not defined in the statute)

If there is no surviving spouse or descendant:

 100% to surviving parent or parents equally

If there is no surviving spouse, descendant or parent:

 100% to siblings and the descendants of deceased siblings, by right of representation

If none of the above:

 Intestacy laws outline further distribution steps to the level of grandparents, next of kin and descendants. See 14 V.S.A. §314(b)(3), (4).

 If no legally described recipient can be found, intestate assets go to the state of Vermont.

Click here for more information on intestacy.

Asset Protection

Non-qualified Annuities: Annuities: $350 per month of total benefits are protected.

Life Insurance Cash Value: Beneficiary interest exempt from creditors of the insured or original owner.

Life Insurance Proceeds: Exempt from creditors of the insured or the owners. Also, the beneficiary's interest is exempt from creditors of the beneficiary that exist at the time proceeds or avails are made available.

Digital Assets: Vermont follows the Revised Uniform Fiduciary Access to Digital Assets Act to ensure that testators can retain control of their digital property and plan for its ultimate disposition.

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