Did you know that the Trump tax cuts had a major impact on Connecticut estate taxes?
In October 2017, the Connecticut Legislature tied the state’s gift and estate tax exemption to the federal exemption amount, which at the time was $5.49 million.
Shortly after that legislation was passed in Connecticut, the Trump tax cuts changed the federal exemption to $11.18 million. This increase had the potential to radically impact the amount of tax revenue for the state because anyone with an estate valued under $11.18 million (or $22.36 million for married couples) would not have to pay any estate tax.
As a result, the legislature in Connecticut went back to the drawing board and passed new exemption amounts on May 31, 2018. The new amounts are as follows:
2023 and thereafter: Equal to the Federal Exclusion Amount (currently $11,400,000).
Simon J. Lebo, a partner at Brown Paindiris & Scott, offered this perspective on the changes to the Connecticut gift and estate taxes:
“Although this legislative change will eliminate the need for estate tax planning for most individuals, it is still important to have an effective estate plan to achieve proper and efficient distribution of assets consistent with a person’s wishes. It is best to consult with an experienced Estate Planning attorney to make sure your wishes are properly and efficiently carried out.”
Also, it’s quite possible that the federal exemption may change if there is a change in the administration at the Whitehouse after the 2020 Presidential election. Be watchful of news related to the estate tax in the coming years.