By: Joan Reed Wilson, Esq.

Most people want to avoid “probate.” Sometimes when a couple hears that if they own all of their assets jointly they will avoid probate, they understand that to mean nothing has to be done when their spouse passes away. This is not true. In Connecticut, when someone passes away, it is necessary to file an Estate Tax Return. This is true if the person owned assets in his or her own name, or owned all of his or her assets jointly with their spouse or someone else. Now before you start cursing Connecticut (a state I happen to love), let’s go through what this means and the reason behind it.

Currently, the estate tax exemption in Connecticut is $3.6 million per person. So although an Estate Tax Return must be filed for every decedent, tax is due from very few estates. And even if the decedent’s assets exceeded $3,600,000, there is an unlimited marital deduction, so if all of the assets pass to the decedent’s spouse, there is no tax due no matter the value of the estate.

The filing of the Estate Tax Return ensures that the proper tax, if any, is paid. It is also how title to real estate is passed from two joint owners to the sole survivor.

Most couples own their home in joint tenancy with rights of survivorship. This means that the property passes by law to the surviving spouse upon the first spouse’s passing without need for probate administration, which leads to the confusion. Even though there is no need for probate administration, the land records need to be updated. If the surviving spouse attempts to sell the property, he or she will have trouble because the land records show that the home is owned by two people. The buyers’ attorney will be looking for a deed signed by both spouses.
To ensure that the land records properly reflect that the surviving spouse is now the sole owner, an Estate Tax Return has to be filed with the Probate Court. The Probate Court then reviews the Return to determine if the estate owes any tax. Then it issues an invoice based on the value of the estate (for example, an estate of $250,000 that passes entirely to a surviving spouse would owe a fee of approximately $550) and once that invoice is paid, the Court issues a Certificate that can be recorded on the land records. This Certificate effectively removes the deceased spouse’s name from the land records, allowing the surviving spouse to sell or refinance the home individually.
The attorneys and staff at RWC, LLC, Attorneys and Counselors at Law are experienced in assisting families of decedents through all aspects of probate, including completing and filing Estate Tax Returns. Please contact us at (860) 669-1222 to schedule a consultation if you think you or someone you know may need to file documentation regarding a deceased family member.