New York neighbors face probate fee hikes of up to 1000 percent

New York residents unhappy with their tax burden may wish to spare a thought for some of their neighbors. Connecticut has raised several state taxes and fees to bridge large budget gaps, and the increases have been implemented retroactively to Jan. 1, 2015. Among the most contentious tax and fee hikes are changes to the probate fee structure that have led to tenfold increases in fees for many estates. While many wealthy Connecticut residents are now said to be thinking about moving out of the state, observers feel that growing financial pressures will prompt other states to impose similar measures.

Connecticut’s revised probate fees were implemented in June after funds for the state’s probate courts were eliminated as legislators struggled to balance the budget. While Connecticut’s estate tax of 12 percent is not excessive compared to other states, a new 0.5 percent probate fee on estates valued at more than $4.754 million and the elimination of a $12,500 probate fee cap have led to estates receiving six-figure probate fee bills.

The probate fees for a Connecticut woman who died in the spring of 2015 would have been capped at $12,500 under the old fee structure, but they will now shoot up to almost $250,000 even after a 50 percent surviving spouse discount has been applied. Some families may think that they can avoid such fees by setting up trusts to avoid probate, but this strategy would be unsuccessful as Connecticut bases the fees on the amount of assets listed on estate tax returns regardless of whether the probate process is employed.

The tax and fee increases in Connecticut are a powerful reminder of how important it is to review estate plans on a regular basis. Attorneys may suggest strategies that could limit fees and taxes even when trusts are unable to accomplish this goal. Such measures could include gifting part or all of an estate or establishing joint property ownership arrangements.

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New York neighbors face probate fee hikes of up to 1000 percent

Ledwidge & Associates

Ledwidge & Associates, P.C. in New York City has years of experience helping clients create estate plans that fit their needs. We have the experience and resources to handle your critical legal matters with the utmost care and attention to detail.
New York neighbors face probate fee hikes of up to 1000 percent

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