Connecticut Families Should Know About Estate Planning and Taxes

Why April 15 Is a Starting Point, Not a Finish Line 

Tax season has a way of bringing financial matters into sharp focus. You are gathering documents, reviewing accounts, and thinking about your money in a way you may not do at any other time of year. But for many Connecticut families, there is an important piece of the picture that often gets left off the list: estate planning. 

If you live in Connecticut, tax season is a timely reminder that your estate plan deserves the same attention you give your annual return. Here is what you need to know. 

Connecticut Has Its Own Estate Tax

Most people know about the federal estate tax, but fewer realize that Connecticut is one of only about a dozen states in the country that also imposes its own estate tax. That means Connecticut families can potentially face two layers of taxation on an estate. 

For 2026, the Connecticut estate tax exemption is $15 million per person. Estates valued above that threshold are subject to a flat 12% state estate tax rate (CGS § 12-391). Connecticut’s total estate tax liability is capped at $15 million.There is no separate inheritance tax in Connecticut. 

While that $15 million threshold may sound like it only affects the very wealthy, it is important to remember that your taxable estate includes more than just your savings account. Real estate values, retirement accounts, life insurance death benefits, and business interests all count toward the total. 

A Unique Wrinkle: Connecticut’s Gift Tax

Connecticut is the only state in the country with its own gift tax. Certain gifts made during your lifetime are tracked alongside your estate for tax purposes. The annual gift tax exclusion is $19,000 per recipient in 2026, and gifts within that limit do not count against your lifetime exemption. But improperly structured larger gifts can create unexpected reporting and tax consequences, which makes working with an experienced estate planning attorney especially important. 

After April 15: A Smart Time to Review

Once your tax return is filed, you have a clear picture of your finances in front of you. That makes the post-tax season period one of the best times of year to revisit your estate plan. A few specific areas to focus on: 

• Beneficiary designations. Retirement accounts and life insurance policies pass directly to named beneficiaries, regardless of what your will says. If those designations are outdated, your assets may not go where you intend. 

• Asset titling. How your property is titled affects how it transfers at death and whether it passes through probate. This is especially important for married couples. Connecticut does not automatically carry over an unused exemption from one spouse to the other, so proper planning is essential to ensure each spouse can fully use their own exemption. 

• Your overall estate value. Rising real estate values and investment growth can push estates into ranges where additional planning becomes more important. A review helps you understand exactly where you stand. 

Strategies That Can Help Reduce Your Exposure

There are several approaches that can reduce estate tax exposure and protect more of your assets for the people you care about: 

• Annual gifting. Giving up to $19,000 per recipient per year removes assets from your taxable estate over time, with no gift tax consequences. 

• Irrevocable trusts. Assets transferred to a properly structured irrevocable trust may fall outside your taxable estate. Structures such as Spousal Lifetime Access Trusts (SLATs) can provide both tax benefits and ongoing access to assets for the right family situation. 

• Life insurance planning. Holding a life insurance policy inside an irrevocable trust can keep the death benefit outside your taxable estate while still providing liquidity for your loved ones. 

These strategies require careful, individualized planning. What works well for one family may not be the right fit for another. 

Work With Someone Who Knows Connecticut Probate

Estate planning in Connecticut is not one-size-fits-all. The intersection of state estate tax rules, gift tax requirements, and probate court procedures makes it important to work with an attorney who understands the full picture. 

At The Prue Law Group, Attorney Patrick Prue brings more than 20 years of experience as a Connecticut probate judge to every client we serve. That firsthand knowledge of how estates move through the probate court system shapes the guidance we provide to every family. Whether you are just starting your estate plan or it has been several years since your last review, now is a good time to take a closer look. 

Contact us today to schedule a consultation at one of our four offices in Willimantic, Brooklyn, Coventry, and Colchester. 

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Sources: 

Connecticut Department of Revenue Services, Estate and Gift Tax Information. portal.ct.gov/drs

Conn. Gen. Stat. § 12-391 (Connecticut Estate Tax) 

Conn. Gen. Stat. § 12-392 (Connecticut Estate Tax Return Requirements) 

Shipman & Goodwin LLP, Trusts and Estates Newsletter, January 2025. shipmangoodwin.com 

Tax Foundation, Estate and Inheritance Taxes by State, 2025. taxfoundation.org 

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The Prue Law Group has served eastern and central Connecticut since 1980, providing comprehensive business law, estate planning, probate, and elder law services. Our team’s deep local knowledge and specialized expertise help business owners protect what matters most. AI may have been used for the initial research and drafting of the article. This content is intended for general informational purposes only and should not be construed as legal advice. For guidance on your specific situation, please contact our office for a consultation.