Connecticut’s Estate Tax

If you have a sizable estate in terms of its market value, one of the issues that will be important to discuss with your Connecticut estate planning lawyer is estate tax. Estate tax is a tax that is paid by the deceased’s estate based on the total amount of the estate at the time of death. The threshold for the estate tax exemption is quite high, which means that most estates are not required to pay estate tax. Indeed, according to the Tax Policy Center, there were only about 7,100 estate tax returns filed in 2023, and only about 4,000 of those estates will actually be taxable. To put that number another way, fewer than 0.2 percent of the number of people who pass away in a given year will have their estate taxed.

At the same time, however, Connecticut is often considered one of the wealthiest states — if not the wealthiest — in the country, and Canton has a higher household income than the state average. As such, residents of Canton who expect to have high value estates should learn more about estate tax in Connecticut and what they may be able to do in the present to minimize estate tax in the future.

Federal Estate Tax 

The federal estate tax only applies to estates with a total value in excess of the annual exemption amount. That amount increases every year, so it is important to know the precise exemption amount in the year a person dies. In 2025, the exemption threshold is $13,990,00. This is how the exemption works: federal estate tax is only required if the total value of the deceased’s estate exceeds the threshold amount for that year.

In addition to the federal estate tax, Connecticut also has a state estate tax. It is one of few states that still has a state estate tax, and it is important for Canton residents to know how it works.

Connecticut State Estate Tax 

Under Connecticut law, the gross estate, which is your estate minus any deductions, will be subject to estate tax if the value totals more than $13.99 million (the same threshold as the federal exemption).

Deductions include marital deductions, charitable deductions, and debts and expenses such as funeral costs. Any non-probate assets (meaning those that do not need to go through probate) are also included in the gross estate. For co-owned assets, only the portion owned by the deceased will be included in the gross estate. It is essential to keep in mind that there are some important distinctions between federal and state estate tax in Connecticut, and you should not expect portability (using your deceased spouse’s remaining and unused estate tax exemption) as you can under federal law.

Contact a Canton Estate Planning Attorney Today 

For Connecticut residents with substantial estates, it is important to discuss the issue of estate tax with your estate planning lawyer. As we discussed above, in addition to the federal estate tax, Connecticut remains one of the handful of US states that also has a state estate tax. Accordingly, for estates with a value above the exempt amount, it will be important to consider options for minimizing estate tax when the time comes. An experienced Canton estate planning lawyer at the Law Office of Brian S. Karpe can speak with you today about estate tax, whether your estate is likely to be subject to the federal and state estate tax, and potential options for minimizing estate taxes. Contact our firm for assistance.

Sources:

cga.ct.gov/current/pub/chap_217.htm#sec_12-391

irs.gov/businesses/small-businesses-self-employed/estate-tax

raxpolicycenter.org/briefing-book/how-many-people-pay-estate-tax#:~:text=TPC%20estimates%20that%20just%20over,few%20estates%20pay%20the%20tax