Why do Probate Courts become involved in the settling of descendents’ estates?”
When a person who owns property dies, the Probate Court becomes involved to oversee the division of property among those persons legally entitled to it. If the person, referred to as the ’decedent,’ left a will, the division of property will be carried out according to the wishes of the decedent as set forth in the will. (The process of proving that a will is genuine and distributing the property in it is known as ’probating’ a will.) If the decedent did not leave a will, his or her property will be divided according to Connecticut’s laws of ’intestacy.’ (See the answer to question 15.) In addition to overseeing the distribution of the estate, the Probate Court will insure that any debts of the decedent, funeral expenses, and taxes are paid before distributing the remaining assets of the estate.
When is it necessary to open an estate?”
An estate must be opened if a decedent owned properties at the time of her death in his/her name alone or together with others, but not in survivorship. A court order is required to transfer this type of property to the proper party.
What does ’in survivorship’ mean, and must survivorship property be reported to the Probate Court?”
The placing of a savings account, shares of corporate stock, bonds, or real estate ’in survivorship’ with another means that each of the named parties has an undivided equal interest in the monies, stocks, bonds, or real estate during their joint lives. This form of ownership grants to the joint owner(s) who survives, ownership of all of the monies, stocks, bonds, or real estate immediately upon the death of the joint owner. Survivorship property must be reported to the Probate Court on the Connecticut Succession Tax Return required to be filed with the Court.
What taxes might be due at the time of death?”
Taxes payable as a result of death include one to the federal government called the Federal Estate Tax and another to the State of Connecticut known as the Connecticut Succession Tax. There may be a tax exemption and thus no tax due depending on the relationship of the beneficiary to the decedent and the size of the estate. Until January 1, 2005, succession tax returns are to be filed with and reviewed by the Probate Court and then forwarded to the Commissioner of Revenue Services of Connecticut. In the event that a dispute arises between the taxpayer and the Commissioner and a compromise is not reached, the Probate Court will hold a hearing to determine the matter. There is also a Connecticut Estate Tax which applies in certain cases where filing of a Federal Estate Tax Return is required. There may also be taxes payable to other states in which the decedent owned property. There may be income taxes, property taxes, and other taxes due from a decedent if these taxes accrued prior to death. It is the fiduciary’s responsibility to ascertain and pay such taxes. Fiduciaries are also responsible for reporting income received during estate administration.
How is the Connecticut Succession Tax determined?”
The Connecticut Succession Tax is currently being phased out and will be totally eliminated by January 1, 2005. The amount of property exempted from the tax varies depending upon the relationship of the decedent to those who will receive the property. The succession tax on amounts passing to most beneficiaries (formerly Class AA, A and B) was eliminated. Currently there is one class of inheritors with Succession Taxes:
Class C — Relationship to decedent: any other beneficiary. For example, uncles, aunts, cousins, sister-in-law, brother-in-law, stepbrother, stepsister, unrelated individuals, associations, corporations.
Exemption amount for property inherited by Class C: Property under $1,500,000, effective January 1, 2004.
Tax on Class C will be eliminated January 1, 2005.
Tax Tables may be obtained from the Department of Revenue Services (860.297.5737) or from your local probate court.