Has Your Estate Plan Been Quietly Outdated by Changes in the Tax Law?
Tax laws have a way of shifting right under a perfectly good estate plan. The rules that applied when you signed your documents may not be the rules in effect today. That gap can cost the people you love.
Keeping up with those changes is part of a recent article from Kiplinger, “Protect Your Family’s Future: Avoid These 12 Common Estate Planning Mistakes.”
Start with the good news. The federal estate tax exemption is now very high—$15 million per person in 2026, or $30 million for a married couple. Thanks to legislation passed in 2025, that exemption has been made permanent and is adjusted for inflation going forward, rather than dropping back to a far lower level as had once been scheduled. For most families, this means no federal estate tax at all. It is a real relief. However, it does not mean your plan is automatically fine.
The first thing the federal headline can hide is state taxes. Several states impose their own estate tax, and a smaller group impose an inheritance tax—a tax paid by the people who inherit, with the amount often depending on how closely related they were to you. More than 30 states impose no death tax at all, while others do, sometimes with thresholds far below the federal figure. Because these rules vary by state and can change, it is worth confirming what applies where you live before you assume your heirs are in the clear.
Connecticut Estate Tax Laws Changed Dramatically in 2023
Connecticut residents should be particularly aware that effective January 1, 2023, Connecticut’s estate tax exemption was increased to match the federal estate tax exemption amount. Prior to that date, Connecticut’s exemption was significantly lower, which led many Connecticut estate plans to include estate tax planning provisions designed to minimize Connecticut estate taxes at the death of the first spouse.
For decades, Connecticut estate planning attorneys routinely drafted wills and trusts that directed assets into an “Estate Tax Shelter Trust,” “Credit Shelter Trust,” “Family Trust,” or “Bypass Trust” when the first spouse died. Those provisions were often necessary and appropriate at the time. Today, for many married couples, they may no longer serve their original purpose.
The second trap is subtler and lives inside older documents. Many wills and trusts written years ago contain “formula” language tied to whatever the estate tax exemption happened to be at the time. When the exemption changes, those formulas can quietly produce a result you never intended. Imagine a will that directs “the maximum exempt amount” into a trust for the children, with the balance passing to the surviving spouse. Drafted when the exemption was modest, that clause made sense. Under today’s much larger exemption, it could steer far more into the trust than you meant—potentially limiting the surviving spouse’s access to assets or creating administrative burdens that are no longer necessary.
If your estate plan was prepared before 2022, it may deserve a careful review. Many older Connecticut estate plans contain provisions that automatically fund an estate tax shelter trust at the death of the first spouse. While these trusts can still be beneficial in certain circumstances—particularly for asset protection, remarriage planning, or blended families—they are no longer necessary solely for Connecticut estate tax planning in many cases.
This is also a reminder of why current tax law is a poor thing to take on faith from the internet, an AI chatbot, or a well-meaning relative. The “right” answer keeps moving, and an outdated rule of thumb can do real damage. What looked settled a few years ago may have been overtaken by a change in the law you never heard about.
Is Your Estate Plan Older Than 2022?
If your estate plan is more than a few years old, now is an excellent time to have it reviewed. You should be especially proactive if your documents contain any of the following terms:
- Estate Tax Shelter Trust
- Credit Shelter Trust
- Family Trust
- Bypass Trust
- A/B Trust Planning
- Formula Funding Clauses tied to estate tax exemptions
An estate plan that was perfectly drafted in 2015 or even 2020 may no longer reflect today’s tax laws or your family’s goals.
Call to Action
If your Connecticut estate plan was prepared before January 1, 2023, or if you are unsure whether it contains estate tax planning provisions, schedule an estate plan review with an experienced Connecticut estate planning attorney.
At Holland Probate Law in Mystic, Connecticut, we regularly review and update older estate plans to ensure they take advantage of current Connecticut and federal estate tax laws while continuing to protect your spouse, children, and legacy.
Don’t assume your estate plan is still doing what you intended simply because it was done correctly when it was signed. Tax laws change—and your estate plan should change with them.
Contact Holland Probate Law today to schedule an estate plan review and determine whether your Estate Tax Shelter Trust is still necessary under today’s Connecticut estate tax laws.
SEO FAQs
Q. Did Connecticut eliminate its estate tax in 2023?
No. Connecticut still has an estate tax. However, beginning January 1, 2023, Connecticut’s estate tax exemption was increased to match the federal estate tax exemption amount.
Q. What is an Estate Tax Shelter Trust?
An Estate Tax Shelter Trust is a trust commonly used in older estate plans to minimize estate taxes at the death of the first spouse. Depending upon your circumstances, it may no longer be necessary solely for tax planning purposes.
Q. Should I update my estate plan if it was prepared before 2022?
Yes. Significant changes to Connecticut and federal estate tax laws make it worthwhile to review any estate plan prepared before 2023, particularly if it contains estate tax planning provisions.
Q. Can an Estate Tax Shelter Trust still be useful today?
Absolutely. These trusts may still provide important asset protection and remarriage planning benefits. The question is whether they remain appropriate for your family’s particular goals and circumstances
Reference: Kiplinger (Jan. 28, 2026) “Protect Your Family’s Future: Avoid These 12 Common Estate Planning Mistakes”