How Inheriting a Vehicle Through an Estate in Vermont

In Vermont, the process for transferring a vehicle title from a deceased owner to an heir depends on several factors, including the type of ownership designation, whether the estate undergoes probate proceedings, and whether the deceased established a Transfer on Death designation. The Vermont Department of Motor Vehicles administers vehicle titles and registrations and recognizes multiple pathways for title transfer upon death.

Understanding Vermont Vehicle Inheritance Laws

Vermont law establishes a comprehensive framework for vehicle inheritance that accommodates traditional probate procedures alongside streamlined alternatives designed to reduce administrative complexity. The legal foundation for vehicle title transfer upon death is established in 23 V.S.A. § 2023, which governs the transfer of ownership interests in vehicles and establishes special provisions for transfer on death designations, surviving spouse transfers, and probate-based transfers.

When the Estate Requires Probate

If the deceased owner's estate is subject to probate court proceedings, the probate court appoints an executor or administrator who receives letters of administration or letters testamentary. These court-issued letters grant the executor or administrator legal authority to manage estate assets and conduct vehicle title transfers on behalf of the deceased's estate. The probate process ensures judicial oversight of all asset transfers and verifies that creditors' claims and outstanding debts have been properly addressed.

To transfer a vehicle title through probate, the executor or administrator must provide the Vermont Department of Motor Vehicles with a letter from the Probate Court documenting the appointment. The original vehicle title must be assigned, and the Release of Liens section must be completed by any lienholder. If multiple parties are listed on the title, all named owners must complete the assignment section or authorize the executor to sign on their behalf. The executor then assigns the title to the new owner or owners, creating an official legal record that the transfer occurred under proper court authority.

When the Estate Does Not Require Probate

Vermont provides a streamlined estate administration process for estates that do not require probate court involvement. This non-probate alternative applies to intestate estates (those without a will) or situations where a will exists, but formal probate is unnecessary. In these cases, heirs can transfer vehicle titles by obtaining a court order rather than pursuing formal probate proceedings.

When probate is not required, the heir must obtain a letter from an officer of the court—such as a court clerk, probate judge, or other authorized court official—stating that the deceased died intestate, that the estate requires no probate proceedings, and naming the person holding ownership rights to the vehicle. If the court officer is from out of state, additional verification is required to confirm that the authority is a member of the Bar or a recognized court official. The heir then submits this court letter to the Vermont Department of Motor Vehicles along with a copy of the death certificate and the original vehicle title. The title must be properly assigned, and the Release of Liens section must be completed by any lienholder.

When Multiple Heirs Inherit a Vehicle

When multiple heirs inherit a single vehicle, Vermont law allows flexibility in structuring the title. The title designation indicates the nature of ownership among multiple owners: "JTEN" (Joint Tenants) means surviving heirs automatically inherit the deceased heir's share; "TEN COM" (Tenants in Common) means each heir's share passes through their own estate; and "PTNRS" (Partners) indicates equal shared ownership unless otherwise specified.

In probate proceedings with multiple heirs, the executor may be authorized to sign the title assignment on behalf of all heirs, or each heir may be required to execute the assignment, depending on the estate's structure. If heirs cannot reach a consensus on vehicle ownership or wish to divide the vehicle's value rather than retain it jointly, the matter may require probate court intervention or consultation with an estate attorney. If the vehicle is sold to distribute proceeds among heirs, one designated heir can sign the title assignment as the estate representative, thereby transferring the vehicle to the buyer.

Required Documentation for Vehicle Title Transfer in Vermont

For Probated Estates

When transferring a vehicle title from an estate undergoing probate proceedings, gather and submit the following documentation to the Vermont Department of Motor Vehicles:

• Letter from the Probate Court confirming appointment of the Executor or Administrator
• Original Vermont certificate of title with the Release of Liens section completed by any lienholder
• Original death certificate of the deceased owner
• Completed Vermont Registration, Tax, and Title Application (Form VD-119)
• Signatures of all named owners on the title assignment in Section 1, if applicable

For Non-Probated Estates

If the estate bypasses probate through intestate succession or other non-probate pathways, submit the following documentation:

• Copy of the death certificate
• Letter from a court officer stating that no probate is required and naming the person holding ownership rights
• Verification that out-of-state court officers are members of the Bar or recognized court officials, if applicable
• Original Vermont certificate of title with the Release of Liens section completed by any lienholder
• Completed Vermont Registration, Tax, and Title Application (Form VD-119)

Special Circumstances for Vehicles with Liens

Outstanding Loans and Liens

If the inherited vehicle has an outstanding loan or lien recorded on the title, the lienholder must authorize the release of the lien before ownership can transfer to the heir. Under 23 V.S.A. § 2023, a lienholder holding the certificate of title must either deliver the certificate to the transferee or mail it to the Vermont Department of Motor Vehicles upon receiving notice of the transfer and payment of applicable fees. The lienholder's security interests remain protected until the lien is officially satisfied on the title record.

If the estate lacks sufficient funds to pay off an outstanding loan, the lienholder retains the right to repossess the vehicle. In some cases, heirs may qualify to assume the loan if they meet the lender's underwriting requirements; however, the original loan agreement must be reviewed and the lender's approval obtained. When a vehicle with a preexisting security interest is accepted as part of a sale or trade, the dealer must satisfy that security interest within five days to ensure proper title transfer.

Heirs managing inherited vehicles with liens should coordinate directly with the lienholder and submit the Release of Liens section on the original title to the Vermont Department of Motor Vehicles before completing the title transfer application. If a lien release cannot be obtained, the heir or executor may petition the probate court for assistance or consult an estate attorney regarding resolution options.

Processing Title Applications in Vermont

Title applications must be submitted to the Vermont Department of Motor Vehicles. Applications may be submitted by mail, in person at the DMV office, or through online systems where available. The title application fee is $42.00 for vehicles such as cars, trucks, trailers, and motorcycles. For all-terrain vehicles, snowmobiles, and motorboats, the fee is $27.00. These fees are non-refundable. Processing typically requires several weeks after receipt. Once the title transfers to the heir's name, a new registration certificate reflecting the ownership change will be issued.

Vehicles Exempt from Vermont Titling

Certain vehicle categories are exempt from Vermont's titling requirements under 23 V.S.A. § 2012. These include vehicles owned by the United States unless registered in Vermont, vehicles held by manufacturers or dealers for sale, non-resident vehicles not required to be registered in Vermont, self-propelled wheelchairs and invalid tricycles, motorcycles with engines under 300 cubic centimeters or electric motorcycles under 20 kilowatts, trailers weighing 1,500 pounds or less unladen, motor-driven cycles, and other off-highway vehicles deemed exempt by the Commissioner.

Additionally, vehicles that were more than 15 years old on January 1, 2024, and have been continuously registered in Vermont with no ownership changes remain exempt from titling. However, effective July 1, 2024, if ownership of an older vehicle changes, a title must be obtained regardless of age. Vermont residents may apply for an exempt vehicle title for vehicles more than 25 years old. Heirs should contact the Vermont Department of Motor Vehicles to determine whether an inherited vehicle falls within an exemption category and whether a title transfer is required.

Vehicle Registration Requirements Following Title Transfer in Vermont

After the title transfer is complete, the vehicle must be registered with the Vermont Department of Motor Vehicles before it can be operated on Vermont roadways. Registration occurs at the county level or through authorized DMV service centers.

Prerequisites for Vehicle Registration

The primary prerequisite is possession of a valid Vermont certificate of title or an out-of-state title convertible to a Vermont title. For vehicles exempt from titling requirements, ownership documentation, such as a bill of sale or court order, is required for inspection purposes.

Vermont does not require proof of insurance at the time of vehicle registration. However, all motor vehicles operated on public roads must be covered by liability insurance meeting state minimums. The Vermont Mandatory Liability Insurance Law establishes these requirements, and license plate issuing officials may verify coverage through the State of Vermont Online Insurance Verification System. If verification cannot be confirmed through this system, the applicant must provide evidence of insurance, with an insurance card being the standard acceptable form.

For vehicles manufactured in model year 2011 or newer, an Odometer Disclosure Statement is required as part of the registration application to verify accurate mileage at the time of transfer.

VIN Inspection Requirements

Vehicle Identification Number verification is required for specific circumstances. For vehicles with existing Vermont titles that are being transferred to new owners through succession or probate, no physical VIN inspection is required. However, vehicles being registered in Vermont for the first time or previously untitled vehicles requiring first-time titling must undergo VIN verification. This verification confirms that the vehicle identification number matches documentation and that no title irregularities exist.

The VIN verification process involves completing the Verification of VIN or HIN form (VT-010) in the presence of an authorized DMV official or at a certified inspection facility. For inherited vehicles already holding Vermont titles, the heir may not need an inspection if the transaction involves only an ownership transfer rather than first-time titling. However, if prior Vermont title records show problems or if the National Motor Vehicle Title Information System indicates title issues, additional verification may be required.

Applicable Fees and Taxes in Vermont

Following completion of all prerequisites, the Vermont Department of Motor Vehicles collects registration fees and purchase and use taxes before issuing license plates and registration certificates. Inherited vehicles may qualify for tax exemptions that should be investigated before final payment.

Vehicle Registration Fees

Vehicle registration fees in Vermont vary by vehicle type and registration period. The following table presents fees for commonly inherited vehicle classifications:

Registration fees include a $2.00 Clean Air Fund Fee and, where applicable, an EV Infrastructure Fee for electric and plug-in hybrid vehicles. Trucks weighing 6,100 lbs or more are subject to a separate fee structure.

Purchase and Use Tax

Vermont imposes a Purchase and Use Tax on vehicle registrations at 6% of the purchase price or the J.D. Power clean trade-in value, whichever is greater, unless an exemption or credit applies. Inherited vehicles may qualify for a tax exemption. Under Vermont tax law, a motor vehicle may be exempt from taxation if it is a gift or inheritance, provided the transfer occurs within one year after the date of death. Heirs should submit inheritance documentation with their registration application to claim this exemption.

Tax is calculated based on the vehicle's value at transfer. If J.D. Power valuation exceeds the actual inheritance value, heirs may submit a Vermont Dealer Appraisal form if the vehicle's value is less than the J.D. Power assessment.

Vermont Estate Tax

Vermont imposes an estate tax on the transfer of estates owned by resident and nonresident deceased persons. However, the Vermont Estate Tax applies only to gross estate values exceeding $5,000,000 plus taxable gifts made within two years of death for decedents dying on or after January 1, 2021. Estates valued at or below $5,000,000 incur no Vermont estate tax liability.

For Vermont estates exceeding the $5,000,000 threshold, a Vermont Estate Tax Return (Form EST-191) must be filed. Vermont applies a flat 16% tax rate to estate values exceeding $5,000,000. The federal estate tax may also apply to very large estates exceeding the federal exemption limits, which are significantly higher than Vermont's threshold. Most inherited vehicles in small to moderate estates will not trigger Vermont or federal estate tax, though the overall estate should be evaluated by an estate professional to determine tax obligations.

Contact Information

Vermont Department of Motor Vehicles
120 State Street, Montpelier, Vermont 05603-0001
Phone: (802) 828-2000
Official Website: Vermont Department of Motor Vehicles