Your Connecticut Estate Plan May Have a $15 Million Blind Spot 

“We’re nowhere near $15 million, so we’re all set.” If that’s been your takeaway from this year’s headlines, you’re in good company. 

It’s a fair read. The One Big Beautiful Bill Act set the federal estate and gift tax exemption at $15 million per person starting in 2026, with no expiration date, and Connecticut ties its own exemption to that federal figure (CGS § 12-391). For most families in eastern and central Connecticut, no estate tax will ever come due. 

But Connecticut runs its own system alongside the federal one, and several of its rules apply whether you owe a dime or not. National Estate Planning Awareness Week (October 19 to 25) and Financial Planning Month make this a good moment to look at what that $15 million number leaves out. 

Connecticut Counts Your Gifts, Too 

Connecticut is the only state with its own gift tax: a flat 12 percent above the exemption, unified with the state estate tax. 

The surprise comes at death. Connecticut adds back every taxable gift you made since January 1, 2005, plus any Connecticut gift tax paid in the three years before death. Gifting still moves future growth out of your estate, but the gifted amount itself comes right back into the Connecticut calculation. 

Gifts up to the annual exclusion, $19,000 per recipient in 2026, stay out of that math. Anything larger belongs on a federal Form 709, and it follows you onto the Connecticut return. 

The House You Already Signed Over 

Some parents deed the family home to their children and keep living in it. Connecticut’s own filing instructions say the home’s full value at death still goes on the estate return, whether the deed reserves a life estate or says nothing and the parent stays put. A transfer made for one purpose can still count for another. 

Your Spouse Can’t Inherit Your Connecticut Exemption 

Federal law lets a surviving spouse claim the unused federal exemption of the spouse who died. That election is called portability. Connecticut doesn’t offer it. 

Picture a couple with $18 million between them. If the first spouse leaves everything outright to the survivor, that spouse’s $15 million Connecticut exemption goes unused. When the survivor later dies with $18 million, Connecticut taxes the $3 million above the exemption at 12 percent. In today’s numbers, that’s $360,000 a bypass or credit shelter trust could have kept in the family. 

Well under $15 million combined? This may never reach you. Still, life insurance, a family business, and decades of real estate growth all count, and they close the gap faster than people expect. 

The Return Families Discover at the Worst Moment 

Every Connecticut resident’s estate must file Form CT-706 NT with the probate court within six months of death, even when no tax is owed. The court has to physically receive it by the deadline, and a postmark doesn’t count. That’s three months sooner than the federal nine-month window. 

A probate judge reviews each return and signs an opinion confirming no Connecticut tax is due, and the court releases its lien on Connecticut real estate for nontaxable estates. Attorney Patrick M. Prue spent more than 20 years on that side of the bench. Our team prepares these returns so an executor isn’t learning the rules in the middle of grief. 

Probate Fees Reach Past Probate 

Connecticut’s probate court fee is based on the greatest of the probate inventory, the Connecticut taxable estate, or the federal gross estate (CGS § 45a-107). Joint accounts, retirement accounts, and life insurance that never pass through probate can still raise it. 

• A $1 million basis carries a court fee of $3,115. 

• The fee caps at $40,000. 

• Property passing to a surviving spouse counts at half value. 

• File the return late, and unpaid fees start accruing interest at 0.5 percent a month. 

Your Awareness Week Checklist 

Our September article covered why fall is the season to start. Bring these to the table: 

• Your will and trust, so we can check for a bypass trust and the formula clauses we flagged in September. 

• A list of gifts over the annual exclusion since 2005, with any Form 709s. 

• Deeds for any property you’ve transferred to children. 

• Life insurance, retirement, and joint account values. 

• Your executor’s name, so they know about the six-month deadline. 

When Legal Matters, We’re Here For You 

A $15 million exemption answers one question. Connecticut asks several more. Let’s make sure your plan has an answer for each of them. 

Schedule a consultation at any of our four offices in Willimantic, Brooklyn, Coventry, or Colchester. Call (860) 423-9231 or visit pruelawgroup.com. 

---

Sources

1. One Big Beautiful Bill Act, Public Law 119-21, amending Internal Revenue Code § 2010(c)(3). Signed July 4, 2025.
2. Connecticut General Statutes § 12-391, Transfer of estates. Connecticut General Assembly. cga.ct.gov 
3. Connecticut General Statutes chapter 228c, Gift Tax. Connecticut General Assembly. cga.ct.gov 
4. Connecticut General Statutes § 12-392, payment of tax and filing of returns. Connecticut General Assembly. cga.ct.gov 
5. Connecticut Department of Revenue Services, Estate and Gift Tax Information. portal.ct.gov/drs 
6. Connecticut Department of Revenue Services, 2026 Form CT-706 NT Instructions (Rev. 06/26). portal.ct.gov/drs 
7. Internal Revenue Service, Revenue Procedure 2025-32, inflation adjustments for tax year 2026, including the annual gift tax exclusion. irs.gov 
8. Internal Revenue Code § 2010(c)(2)(B) and (c)(4) (portability of deceased spousal unused exclusion) and § 2036 (transfers with retained life estate). 
9. Connecticut General Statutes § 45a-107, fees for settlement of decedents’ estates. Connecticut General Assembly. cga.ct.gov 
10. Connecticut Probate Courts, Fees and Expenses Calculators. ctprobate.gov 
11. H.Res. 1499, 110th Congress, designating the third week of October as National Estate Planning Awareness Week (2008). congress.gov 
12. The Prue Law Group, September Is the Smartest Month to Start Your Estate Plan, Here’s Why (September 2026). pruelawgroup.com 
13. The Prue Law Group, 5 Estate Planning Moves to Make in 2026: A Connecticut Guide. pruelawgroup.com 

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 families 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.