Estate planning rules in Connecticut
Key takeaway
Connecticut estate planning rules cover will formalities, the effect of divorce on a will, pour-over bequests to trusts, and a state estate and gift tax with its own return. Wills must meet statutory signing and witnessing requirements. The Connecticut estate tax return, Form CT-706/709, is due no later than six months after death unless an extension is requested.
Wills
Connecticut law allows a person 18 years or older and of sound mind to dispose of their estate through a valid will document.
A will generally must be written, signed by the testator and attested by two witnesses who sign in the testator's presence. A will valid under the law where it was executed may pass property in Connecticut.
Divorce and remarriage
If a testator's marriage ends by dissolution, divorce or annulment after executing a will, dispositions, powers of appointment and fiduciary nominations to the former spouse are revoked unless the will expressly provides otherwise.
Will provisions revoked solely because of divorce or annulment are revived if the testator remarries the former spouse.
Bequests to trusts
A will may devise or bequeath property to a trustee of a trust established during the testator's lifetime or at death, if the trust is identified in the will or codicil and its terms are in a written instrument.
Unless the will provides otherwise, property bequeathed to a qualifying trust becomes part of that trust and is administered under its governing instrument, including amendments made before or after the testator's death.
Unless the will provides otherwise, a bequest to a trust that was revoked or terminated before the testator's death lapses.
Estate and gift tax
Connecticut defines a resident estate as that of an individual domiciled in Connecticut at death, and a nonresident estate as that of an individual not domiciled in Connecticut at death.
A Connecticut QTIP election must be made by filing Form CT-706/709, even if the Connecticut taxable estate is at or below the exemption amount. It may not be made by filing Form CT-706 NT.
Connecticut says a husband and wife who both consented to gift splitting for federal gift tax purposes are deemed to have consented, and are required to split gifts, for Connecticut gift tax purposes.
Connecticut says special valuation rules generally apply when a donor transfers property to a family member and retains an interest, such as a gift of real property where the donor keeps a life estate.
Farmland transferred to a lineal descendant or the descendant's spouse may be valued according to its current farmland use. Certain transfers or classification changes within ten years trigger additional tax for the donee.
Medicaid and decanted trusts
A Connecticut court granted a preliminary injunction against terminating Medicaid benefits where the State claimed two decanted trusts were available, because the original trusts were discretionary and included spendthrift clauses.
Thresholds and rates change. Check the state's own current figures.