Retired New York residents who are considering a move to Connecticut may want to think twice. On July 1, probate fees in Connecticut were doubled for estates worth at least $2 million. With probate fees at .05 percent of an estate, Connecticut is now the most expensive state to inherit money in.
Prior to the probate fee hike, Connecticut had a fee cap that was set at $12,500 for one estate. The cap has now been eliminated, and some relatives of recently deceased Connecticut residents have received bills for $1 million. Adding to the expense, Connecticut is a state that includes the proceeds from life insurance policies in a deceased person’s taxable estate.
Many Connecticut residents weren’t aware that probate fees were increased on July 1 until they received a bill in the mail. One estate planning attorney in Greenwich said that the most surprising thing about the fee increase was that it was retroactive to January 1. The fee increase was reportedly a response to budgeting issues that caused the state legislature to cut off all funding to the probate court system. Previously, fees were used to fund two-thirds of the probate court budget. Now, fees will be used to fund Connecticut’s entire probate court budget.
Probate court fees in New York may be less expensive than the fees in Connecticut, but they can still add up and eat away at the value of an estate. An attorney may be able to help an individual to create an estate plan that includes financial tools like trusts. Because trusts do not go through probate, they might help heirs to hold onto more of their inheritance.