Detailed answer — step-by-step under Vermont law

The following explains the common procedures a personal representative (executor/administrator) and interested persons use in Vermont when distribution of cash from an estate is disputed. This is a practical guide, not legal advice.

1. Confirm who has authority to act

Only the person appointed by the Vermont Probate Division as the personal representative has the legal authority to collect, manage, and distribute estate assets. If no appointment exists, one must petition the Probate Division for appointment before taking distribution actions. See Title 14 (Probate and Estates) for the probate process: Title 14, Vermont Statutes.

2. Do not distribute contested funds without court approval or agreement

If distribution is contested, an unauthorized distribution can expose the personal representative to personal liability for any loss. The usual safe options are:

• Request court instructions (a petition for instructions) about how to proceed.
• Seek an interim or final order authorizing distribution on proposed terms (often after notice to interested persons).
• Deposit the disputed funds with the Probate Division or file an interpleader so the court holds the money while claims are resolved.

3. Petition the Probate Division for instructions or authorization

The personal representative may file a petition (sometimes called a petition for instructions, for authority to make interim distribution, or for court approval of a settlement). The petition should describe the dispute, list interested persons and heirs, explain the representative’s proposed action, and request a specific court order. The court will usually require notice to all interested persons and give them an opportunity to respond. The Probate Division handles petitions about administration and distribution; see the Probate Division’s guidance and forms: Vermont Probate Division.

4. Consider depositing funds with the court (interpleader / registry deposit)

If multiple parties claim the same funds, the personal representative can ask the court to accept the funds into its registry or bring an interpleader-style motion. Depositing money with the court relieves the personal representative of the risk of paying the wrong party. The Probate Division’s local rules and procedures govern registry deposits and holding funds pending resolution.

5. Provide required notice and file accountings

Vermont law requires notice to heirs, devisees, beneficiaries, and known creditors in many common probate steps. The court will expect the personal representative to provide proper notice before approving distributions. Additionally, periodic accountings may be required so the court and interested persons can review receipts, payments, and proposed distributions. See Title 14 for statutory duties and procedural requirements: https://legislature.vermont.gov/statutes/title/14.

6. Use mediation and settlement where possible

Mediation or settlement negotiations among heirs and claimants often resolve disputes faster and at lower cost than formal litigation. If the parties reach an agreement, they can present a proposed stipulation or settlement to the Probate Division and ask the court to enter an order approving the distribution.

7. If contested, expect a hearing and possible litigation

If interested persons oppose the petition, the court will schedule a hearing. At the hearing, the court may:

• Issue instructions to the personal representative.
• Order the funds placed in the court registry pending final resolution.
• Approve (or deny) interim distributions if the court finds them reasonable and in the estate’s best interest.

8. Practical documents and evidence to prepare

Whether you are the personal representative or an interested person, gather:

• The will (if any) and probate appointment papers.
• Bank statements showing the disputed funds.
• An accounting of receipts and payments to date.
• Communications with other beneficiaries or claimants (offers, settlement drafts).
• Any contracts, beneficiary designations, or documents supporting a claim to the funds.

9. Timeline and costs

Time depends on whether parties agree. Simple petitions or agreed interim distributions can be resolved in weeks to a few months. Contested matters that require hearings or litigation can take many months and increase estate administration costs. Attorneys’ fees, court costs, and possible bonds are practical considerations.

10. When to hire an attorney

Consider hiring a probate attorney if claims are contested, the estate is large or complex, or you face potential personal liability as the personal representative. An attorney can prepare petitions, advise on bonding, and represent you at hearings.

Helpful hints

• Act promptly. If you are the personal representative, do not distribute money you know is contested—seek court guidance or deposit the funds with the court.
• Give full notice. Proper notice to all interested persons is often required before the court will approve a distribution.
• Use forms and local procedures. Check the Vermont Probate Division pages for local forms and filing instructions: Vermont Probate Division.
• Consider mediation. A mediated settlement can save time and money and is usually quicker than a contested hearing.
• Keep detailed records. Accurate accounting protects the personal representative from claims of mismanagement.
• Ask about bonds. In some situations the court may require a bond to protect the estate if the administrator’s handling of funds is disputed.
• If in doubt, consult a lawyer. A Vermont probate attorney can explain options under Title 14 and represent your interests at the Probate Division. See Title 14 for statutory framework: Title 14, Vermont Statutes.