Looking at Revocable Trusts in Vermont Versus Nevada
Discover the differences between revocable trusts in Vermont versus Nevada, focusing on tax context and drafting habits.
The differences between revocable trusts in Vermont versus Nevada hinge on two things. How each state treats trusts today, and how their rules evolved. The basics are similar—revocability, probate avoidance, privacy—but the tax backdrop and statutory history differ.
A Short History: Vermont
Vermont modernized its trust law in 2009 by enacting Title 14A (its version of the Uniform Trust Code). That framework clarifies when a trust is revocable and how trustees should inform beneficiaries. Under 14A V.S.A. § 602, a trust is revocable unless it expressly says it isn’t.
A Short History: Nevada
Nevada’s trust code lives in NRS Chapter 163 and has been updated for decades to encourage flexible, privacy-focused planning. The statute now says a trust is irrevocable unless the settlor expressly reserves a right to revoke—so drafters spell out revocability in the document. Nevada also eliminated its “pick-up” estate tax effective January 1, 2005, after the federal credit disappeared.
Revocable trusts in Vermont versus Nevada turns on tax context and drafting habits, not on whether trusts “work.” Both states let you keep control while living, avoid most probate, and maintain privacy. Vermont’s UTC-based framework and estate tax create one planning backdrop. Nevada’s NRS system and no state-level transfer taxes create another.
Revocability mechanics: Vermont presumes revocable unless the document says otherwise. Meanwhile, Nevada presumes the opposite unless revocation rights are reserved. Both approaches work the same in practice if you include clear revocation language in the trust.
Probate avoidance and privacy: in both states, properly funded revocable trusts can keep most assets out of probate and out of the public record. Funding requires retitling accounts and deeds.
Taxes during life: revocable trusts are “see-through” for income taxes; the creator reports income on a personal return. There’s no built-in income-tax break.
State tax landscape at passing: Vermont has no estate tax or inheritance tax, while Nevada has neither an estate nor inheritance tax. That difference doesn’t turn a revocable trust into a tax shelter. However, it shapes how families model future costs.
Revocable Trusts in Vermont Versus Nevada Examples
Example 1: The lake-house couple (Vermont).
Maya and Leo live in Burlington. Their key assets are a home, a camp on Lake Champlain, and savings. They create a revocable trust, move title to both properties, and add a pour-over will to catch anything missed. When one spouse passes, the survivor keeps control, and most transfers bypass probate. Because Vermont presumes revocability, their document reads cleanly. If their combined estate later exceeds Vermont’s estate-tax threshold, the trustee will still file any required state return.
Example 2: The Reno founder (Nevada).
Jordan launches a software company in Reno. A revocable trust holds brokerage accounts and later, sale proceeds. Nevada requires the trust to reserve the right to revoke, so Jordan’s lawyer includes that clause prominently. When Jordan relocates out of state, the trust remains revocable and portable. Nevada’s lack of estate and inheritance taxes doesn’t make the trust a tax shelter. However, it can reduce state-level costs for Nevada-based estates.