Better Late Than Never: Two Quick Hits from the Recently Passed Connecticut Budget

After 123 days without a budget, the legislature passed, and Governor Malloy finally signed the new Connecticut state budget, covering the next two years.  Two quick points of interest relating to estate planning and real estate.

First, the budget enacts some long overdue estate tax relief. As has been highly publicized, Connecticut has one of the lowest estate tax thresholds in the country (meaning the Connecticut estate tax is imposed on smaller estates than almost anywhere else.) The new budget will dramatically increase the estate tax exemptions (the amount which can pass to heirs without tax) over the next three years. The exemption will increase from today’s $2 million, to $2.6 million in 2018, $3.0 million in 2019, and in 2020 and beyond will equal the federal estate tax limit (which is currently just under $5.5 million).  The hope is these increases will slow the exodus of high net worth families from the state.

The second quick point is not so dramatic. The legislature has added a $7 dollar per document surcharge to any document recorded on the land records.  In a typical real estate transaction, this will add an additional $14 to $21 in recording costs to the purchaser and an additional $7 to $14 to the seller. Obviously, the actual increase in costs will depend on the transaction and the number of documents being recorded.

Should you have any questions about these issues, please do not hesitate to contact us!

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