Plenty of Massachusetts families have a second home in Vermont: a ski house near the mountains, a camp on a lake, or a farmhouse they plan to retire to. Owning property in two states is simple to enjoy and easy to overlook in a financial plan. Here are six questions worth settling with your advisors.

1. Which state is "home"?

Your legal residence, or domicile, drives which state taxes your income and, at death, your estate. It isn't decided by a single fact. Where you vote, hold a driver's license, spend most of your time, see your doctors and keep your important papers all count.

For most people with a weekend house the answer is clear: Massachusetts. It gets less clear as retirement approaches and the Vermont house becomes the place you spend more of the year. If you plan to switch, decide on purpose and document the change, so you don't end up treated as a resident of both states.

2. How Massachusetts treats your Vermont house now

Massachusetts changed its estate tax in 2023. For people who die on or after January 1, 2023:

  • Estates of $2 million or less owe no Massachusetts estate tax. A credit of up to $99,600 means larger estates generally owe tax only on the amount above $2 million.
  • For Massachusetts residents, real estate and tangible property located outside Massachusetts, such as a Vermont house and its contents, is no longer included when the Massachusetts tax is calculated.

That second change helped many families with a home in another state. The exemption still isn't shared between spouses, though, so each spouse's plan matters.

3. Vermont has its own estate tax

Vermont taxes estates too, separately from Massachusetts and the federal government. The Vermont exclusion is $5 million, and the tax applies only to the value above that. Vermont property owned by someone who lives elsewhere can bring a Vermont filing into play. In 2026 Vermont raised its filing threshold to $5 million to match the tax threshold.

For many families the Vermont tax may never apply. For larger estates, or a valuable Vermont property, it is worth a conversation with an estate attorney who works in Vermont.

4. Avoiding probate in two states

When someone dies owning real estate in a state where they didn't live, the family may need a second, "ancillary" probate in that state. It means extra time, cost and paperwork, often handled from a distance.

Holding the Vermont property in a revocable trust, or another form of ownership your attorney recommends, can often avoid it. Check how the deed is titled today; it is an easy detail to miss.

5. If you plan to retire to Vermont

Moving your legal residence to Vermont changes your taxes in a few ways:

  • Vermont taxes most retirement income, including IRA and 401(k) withdrawals and most pensions.
  • Vermont exempts some or all Social Security benefits for filers below certain income levels, and the thresholds change. Massachusetts does not tax Social Security at all.
  • Your estate would then fall under Vermont's estate tax, not Massachusetts's.

None of this means one state is better. It means the move deserves a side-by-side comparison of taxes, healthcare, housing costs and where your family is, before the moving truck shows up.

6. The house in your retirement budget

A second home is a lifestyle choice and a financial one. Property taxes, insurance, heating, plowing and upkeep continue in retirement. If you rent the home out, Vermont has its own rules and taxes for short-term rentals. Planning for these costs, and for whether the house will eventually be sold, kept or passed to children, can help keep the dream house from becoming a strain.

How we help

We work with Vermont residents and Massachusetts families with a Vermont home. Christian is in central Vermont once or twice a month and meets with clients there by appointment, and we meet by video anytime. We help pull the pieces together: residency, retirement income, beneficiary designations and a review of how accounts and property are titled. Then we coordinate with your estate attorney and tax professional in each state. Learn more on our Vermont page, or request a complimentary consultation.

Sources

This article is general information, not individualized investment, tax or legal advice. Tax and estate laws change, and how they apply depends on your circumstances. Please consult your tax and legal advisors. Radius Wealth Management LLC provides individualized advice only where permitted to do so.