Articles by Judge Landgrebe
The Probate Court System:
Connecticut’s probate court system is based on a 300-year-old foundation of commitment to service, integrity, and the rule of law. Today, in addition to the traditional role of overseeing decedents’ estates and trusts, the probate courts handle a wide range of sensitive issues affecting children, the elderly, persons with intellectual disability, and individuals with psychiatric disabilities. In carrying out their responsibilities, the probate courts strive to protect the rights of individuals while affording those involved in probate matters an approachable and consumer friendly environment.
There are approximately 54 probate courts located throughout the state of Connecticut. Under the State Constitution, probate judges are the only judges in Connecticut that are elected. Probate judges serve four-year terms and must reside within the probate district they serve.
Administration of a Decedent Estate:
When a person dies, his or her estate must be administered in the probate court in the district where he or she resided at the time of death. Only "probate assets" (those assets owned by the decedent in his or her individual name for which there is no other means of determining to whom the asset should be distributed) are subject to the probate process. Life insurance policies and retirement plans having beneficiary designations directing distribution upon death and jointly owned property, for example, are non-probate assets. A bank account owned individually, on the other hand, can only be distributed upon death in accordance with the decedent's will or under the State's intestacy statutes. This is a probate asset.
There are three different types of estates depending on how assets are held at death. The three options are:
1) tax purpose only estate;
2) informal estate; and
3) formal estate.
1) Tax purposes only estate:
The tax purpose only estate is used when the entire estate consists of survivorship assets, assets passing directly to a named beneficiary, or assets held in trust. Under the tax purpose only process, even though no assets pass through probate, a Connecticut state estate tax return must still be filed with the local probate court listing all non-probate assets.
In addition, depending on the size of the gross taxable estate, a federal estate tax return may also be required.
Today, the primary reason to file the tax purpose only estate is to obtain a certificate releasing tax lien for jointly owned real estate. Failure of the joint owner to obtain the certificate releasing tax lien could later impact the ability to sell or mortgage the real estate since the State retains an inchoate lien for estate taxes until a release of the lien is obtained.
2) The Informal Estate:
The informal estate process is used when a decedent owned personal property solely in his or her name and the value of the solely owned personal property is below $40,000. For example, if a husband and wife owned their home and bank accounts jointly in survivorship, and the husband owned a vehicle having a value below $40,000 in his name solely, then, at his death, an informal estate must be opened to probate the vehicle. The husband's Last Will and Testament, if he had one, is not formally admitted to probate.
The wife, instead, files an application in lieu of administration, files the will, and files a request for the transfer of the vehicle with the probate court. She must also file the Connecticut estate tax return and federal estate tax return (if required). Thirty days after filing the Estate Tax Return, if the Department of Revenue Services does not object to the return, then the probate court can issue a Certificate releasing tax lien and a decree to transfer the vehicle to the wife. This process is a simplified version of the formal estate process and normally will be completed with sixty to ninety days of death. If a person owned real estate solely in his or her name, even if below $40,000 in value, then the formal estate process must be used.
3) The Formal Estate:
The formal estate administration process must be used if the decedent owned personal property solely in his or her name in excess of $40,000 or solely owned any real property.
For example, husband and wife own their home and bank account jointly in survivorship, but husband solely owns a mutual fund worth $40,500. At the husband's death, because the mutual fund has a value in excess of $40,000, his estate must be administered under the formal estate process in order to transfer the mutual fund to wife's name. (Remember, the jointly owned assets are not part of the formal estate process.)
The formal estate process begins by filing an Application to Admit the Last Will and Testament or for the intestate administration if he had no will. A hearing is held in the probate court to admit the will and appoint the executor of the estate. Today, a waiver process can be used to avoid a formal hearing if all heirs agree in writing. Once the will is admitted, the executor is required to gather the solely owned assets and file an inventory of those assets. Normally, the inventory needs to be filed with the probate court within two months from the date of appointment of the executor. The executor also pays any outstanding bills, and files a Return of Claims that itemizes the claims filed and indicates whether the estate paid or denied a claim.
Within six months of the date of death, the executor must file the Connecticut estate tax return listing all taxable assets. The gross taxable estate generally includes solely owned assets, jointly owned assets, and assets that pass outside of probate to a named beneficiary. If any taxes are due, they should be paid within six months to avoid interest and penalties.
If the gross taxable estate exceeds the statutory amount (including life insurance proceeds), then the executor must file the federal estate tax return Form 706 and the state estate tax return Form CT706 within nine months from date of death. Any federal estate taxes owed should be paid within nine months to avoid interest and penalties. Upon review of the tax returns by the taxing authorities, an approval letter is received indicating acceptance of the tax returns.
At that time, the executor submits a final accounting listing the assets initially inventoried in the estate, all payments made from the estate, and proposed distribution to the beneficiaries. If a will was admitted, then the beneficiaries are those individuals, charities, or trusts set forth in the will. Absent a will, distribution is to the heirs according to the laws of intestate estate. Upon approval of the accounting by the probate court, the executor then distributes the remaining assets to the beneficiaries and files an affidavit of closing to complete the administration process. On average, the administration process can take between nine months and two years to complete.
The probate court serves a vital role in the various matters as discussed above. The probate courts serve as the vehicle by which assets are transferred from one individual to another upon death. In the past few years, the probate system has undergone changes to and also implemented streamline procedures and simplifies the administration process in order to make the system more user friendly.
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