Disclaimer: This is general information, not legal advice. Consult a licensed Vermont attorney about your specific situation before acting.
Detailed Answer
When an estate has paid all taxes, valid creditor claims, and administration expenses, the remaining net assets belong to the estate’s beneficiaries. In Vermont, the process to distribute those remaining funds to the decedent’s children follows a set of practical and legal steps. The exact steps depend on whether the decedent left a valid will, whether administration is supervised by the court, and whether any beneficiaries are minors or disabled.
1) Identify who inherits
If there is a valid will, follow the will’s directions for gifts to children. If there is no will (intestate), Vermont’s statutes in Title 14 govern who inherits. The personal representative must determine each child’s share and whether a child predeceased the decedent. Vermont law distributes an intestate share to descendants (children and further issue) according to the statutes found in Title 14 (see Vermont Statutes, Title 14 — Estates and Trusts: https://legislature.vermont.gov/statutes/title/14).
2) Confirm the estate is ready for distribution
Before funds move to beneficiaries, the personal representative (executor or administrator) must ensure:
- All valid creditor claims are resolved or allowed to lapse under the applicable claims period.
- All federal and state income and estate tax returns are filed and any taxes due are paid or properly reserved.
- All administration expenses (attorney fees, funeral costs, appraisal fees, bond premiums, etc.) are paid or accounted for.
- If the estate is supervised, the court has approved final accounting and distribution; if unsupervised, the representative must still keep records and follow statutory notice procedures.
3) Final accounting and petition for distribution
The personal representative prepares a final accounting listing assets collected, receipts, disbursements, fees, taxes, and reserves. The representative then asks the probate court for approval (if supervised administration) or sends required notice (if unsupervised). In supervised matters the court will review and enter an order approving the accounting and directing distribution to beneficiaries.
4) Calculate each child’s share
Shares depend on the will or intestacy rules. Key concepts to apply:
- Per stirpes distribution: If a child predeceased the decedent but left descendants (grandchildren of the decedent), that branch typically receives the predeceased child’s share divided among that child’s descendants.
- Surviving spouse rights: A surviving spouse’s statutory rights (or elective share) may reduce the amount available to children. Confirm any spouse’s claim before distribution.
- Advancements and allowances: Any lifetime gifts declared as advances against a child’s inheritance reduce that child’s share if the will or statute requires such treatment.
5) Special situations — minors, incapacitated beneficiaries, and disclaimers
If a child is a minor or incapacitated, the representative should use a protective method for delivery, such as:
- Establishing a guardianship or conservatorship account for the child’s share (court-supervised).
- Transferring funds into a custodial account under the Vermont Uniform Transfers to Minors Act (UTMA) if appropriate.
- Placing assets in a trust for the child’s benefit, if authorized by the will or by court order.
A beneficiary may also formally disclaim (refuse) an inheritance. A valid disclaimer typically must meet statutory requirements and be timely. If a disclaimer occurs, the disclaimed portion usually passes as if the disclaiming beneficiary predeceased the decedent.
6) Make the distributions and obtain releases
After the court (if applicable) approves distribution and all conditions are met, the representative pays or transfers each child’s share. Best practices include obtaining signed receipts, releases, or a final order discharging the personal representative. Keeping thorough records helps the representative seek discharge and avoid future liability.
7) Final steps — close the estate
Once the estate distributes assets and closes bank accounts, the representative files any required closing documents with the probate court to be officially discharged. The court’s discharge shields the representative from future claims arising from proper administration.
For the governing statutes and probate rules, see Vermont Statutes, Title 14 (Estates and Trusts): https://legislature.vermont.gov/statutes/title/14. For information about Vermont probate courts and forms, see the Vermont Judiciary website: https://www.vermontjudiciary.org/.
Helpful Hints
- Start by locating the original will and filing it with the probate court as soon as possible.
- Obtain multiple certified copies of the death certificate; banks and agencies often require them.
- Keep a centralized folder of inventories, receipts, creditor communications, tax filings, and court papers.
- Don’t distribute assets until creditor claims and tax obligations are resolved or properly reserved.
- When minors are beneficiaries, consult the probate court about the safest transfer mechanism (UTMA, guardianship, or trust).
- If a beneficiary contests a distribution, seek counsel quickly — contests often have strict deadlines.
- Consider hiring an attorney when the estate is complex (real estate, business interests, out‑of‑state assets, contested claims, or tax issues).
- Document every distribution with signed receipts or a court order to limit future personal liability for the representative.
If you need help interpreting the will, determining intestate shares, or completing court filings in Vermont, contact a licensed Vermont probate attorney or the probate division of the Vermont Judiciary for guidance.