Should I avoid Probate? How do I avoid Probate?
Such has been written by TV personalities and other advisors speaking to a national audience about the importance of “Avoiding Probate.” However, many of the so-called advantages of avoiding probate are simply not applicable to Connecticut residences. Having said that, nearly all estate planning clients of Holland Law Offices do indeed avoid probate.
In almost every state in the country other than Connecticut, the fee that the Probate Court charges is based on the assets that are subject to probate. Therefore, in most states if you avoid probate you also reduce Probate Court fees. That is not the case in Connecticut. In Connecticut, the Probate Court fee is based on ALL the assets a deceased person owned at the time of their death; not the assets subject to the Probate Court jurisdiction. That is one reason why the so-called benefits of avoiding probate are somewhat exaggerated in Connecticut.
Avoiding Probate In Connecticut
Probate of an Estate refers to the Connecticut Probate Court having jurisdiction and oversight over the actions of the Executor of a deceased person’s Will.
Connecticut law requires public probate proceedings for every deceased resident who holds assets of more than $40,000 in their individual name upon death unless those assets pass by beneficiary designation. For estates under $40,000, a streamlined process is available.
If assets are jointly owned, they are not subject to probate. If assets pass by beneficiary designation, they are not subject to probate. Finally, if assets are in a Revocable Trust, they are not subject to probate. With this in mind, it is relatively easy to properly structure one’s assets while alive to avoid probate at death.
Remember, in Connecticut avoiding probate will not reduce Probate Court fees. Avoiding probate will reduce the legal fees necessary to settle one’s estate and generally the inherited assets will be distributed to the intended beneficiary much quicker if probate is avoided. For this reason, almost every estate planning client of Holland Law Offices has an estate plan structured to avoid probate.
Connecticut Estate Tax Rules
Regardless of how an estate is structured, including Revocable Trusts, a Connecticut Estate Tax Return must be filed and State Estate Taxes may be owed. The estate tax exemption amount in Connecticut in 2020 is $5.1 million per person or, with proper planning, $10.2 million for a couple. The Federal estate exemption amount is $11.58 million per person or just over $23 million per couple.
An experienced Trust and Estate attorney can advise clients on ways to reduce any potential estate tax liability at death.