Connecticut has a long‑established and sophisticated population of highly educated and experienced individuals, an important percentage of whom have amassed notable financial wealth based on national and international standards. This is particularly concentrated along the Gold Coast of Fairfield County and in legacy industrial and financial centres like Hartford and New Haven Counties, with many families possessing multi-generational wealth tied to closely held businesses, investment management, private equity, hedge funds and real estate.

Succession planning in Connecticut is influenced by a cultural emphasis on preserving family control, stability and privacy, often favouring long‑term trusts, dynastic planning (frequently through out‑of‑state trust structures) and professional fiduciary oversight rather than outright dispositions. There is broad acceptance of freedom of testation, tempered by a pragmatic respect for family harmony and business continuity, especially where operating companies or family offices are involved. Philanthropy and community engagement – particularly in education, healthcare and cultural institutions – are significant components of legacy planning, but typically complement the goal of maintaining family wealth and enterprise continuity across generations, rather than displacing it.

Connecticut’s private wealth profile is shaped in particular by the private placement funds industry, primarily but not exclusively in the south western part of the state, alongside longstanding concentrations of wealth in healthcare, insurance, aerospace and defence in Hartford and New Haven Counties, as well as state-wide real estate development. The state’s proximity to New York City has facilitated a deep base of hedge fund, private equity and alternative investment principals (often representing relatively liquid, performance‑based “new wealth”), for whom estate and income tax planning emphasises carried interest structuring, residency and domicile analysis, liquidity management, and sophisticated trust and family office arrangements.

By contrast, healthcare systems, aerospace manufacturers and real estate developers frequently reflect “old and new” operating wealth, with planning focused on closely held business succession, valuation discounts, governance continuity and the alignment of estate planning with executive compensation and long‑term capital investment cycles. Together, there is a willingness to engage in sophisticated and advanced tax planning, bespoke fiduciary structures and co-ordination between estate, income tax and business succession strategies, particularly in light of Connecticut’s state‑level estate and gift tax rates.

Domicile in Connecticut is defined as the place an individual intends to be his or her permanent home, and to which such individual intends to return whenever absent (Conn. Agencies Regs. 12-701(a)(1)-1). An individual can only have one domicile; once established, it continues until the individual can prove domicile elsewhere. An individual’s domicile is an important consideration for estate planning purposes because states have their own inheritance, gift and estate taxes. These varying degrees of taxes can affect the disposition of assets and alter the amounts received by beneficiaries.

In Connecticut, the court will look at a list of 28 non-exclusive factors to determine whether an individual is domiciled in the state, with no single factor carrying a determinative outcome. The court will consider factors such as location and duration of employment, voter registration, social memberships, professional licences, bank accounts, business relationships, vehicle registration, ownership or rental of real property, and where mail and benefits are received. If a fiduciary is trying to disprove Connecticut domicile for a decedent, the factors must produce clear and convincing evidence against Connecticut domicile.

Connecticut law distinguishes between resident and non-resident estates. A decedent is considered a Connecticut resident if domiciled in Connecticut. Estates required to file a Connecticut estate tax return are presumed to be resident estates unless they prove otherwise. Specifically, Conn. Gen. Stat. § 12‑391 provides for an estate tax on:

• residents, whose global assets are included in the Connecticut taxable estate; and
• non-residents, but only with respect to their Connecticut‑situs real and tangible property.

The statute outlines the taxation structure for both groups, including how domicile is evaluated for estate tax purposes. Domicile determinations for estate tax purposes may be reviewed administratively and judicially under Conn. Gen. Stat. § 12‑395, which expressly provides that a probate court’s domicile finding under § 45a‑309 is not binding on the Department of Revenue Services (DRS) unless the statute allows otherwise.

Notably, in 2024, the Connecticut Superior Court determined that a decedent who had established strong connections with both Florida and Connecticut was a Connecticut domiciliary. In Daniels v Commissioner, the court found that – even though the decedent declared himself to be a Florida domiciliary, held a Florida driver’s licence, was registered to vote in Florida and maintained a local bank account in Florida – evidence was not conclusive enough to disprove Connecticut domicile where the decedent also maintained similar personal connections to Connecticut. Rather, the court found that the most determinative factor in that case was the decedent’s consistent decision to spend more time in Connecticut than any other state.

While this outcome is not determinative in all instances where a decedent holds multiple residences, it is indicative that an individual must make concentrated efforts to show that he or she is domiciled in the intended state. Where an individual wishes to maintain consistent contact with Connecticut but not be domiciled there, he or she must be intentional about consistently establishing domicile in another state for all purposes, including time spent and actions taken. The Connecticut court concluded that domicile hinges on subjective intent as shown through actual conduct, and that the domicile determination for estate tax purposes may differ from historic income tax residency findings from state to state. The court treated domicile as a common law concept applied consistently across estate, gift and income tax contexts, using similar subjective factors under the regulations.

Regardless of a testator’s domicile or the location of a testator’s assets, Connecticut will recognise a will validly executed in compliance with the Uniform International Wills Act (Conn. Gen. Stat. §§ 50a-1 to 50a-9). In addition, Connecticut courts will admit into probate a will that was validly executed pursuant to the laws of the jurisdiction in which the testator executed the will (Conn. Gen. Stat. § 45a-251).

An individual can file a complaint for dissolution of a marriage or for legal separation any time that either spouse has established residence in Connecticut. A decree dissolving the marriage or granting legal separation may be entered in the following three scenarios:

• one of the spouses has been a resident of Connecticut for at least 12 months prior to the date of the complaint or date of the decree;
• one of the spouses was domiciled in Connecticut at the time of the marriage and had returned to Connecticut with the intention of permanently remaining in Connecticut prior to the complaint; or
• the cause for the complaint arose after either spouse moved into Connecticut (Conn. Gen. Stat. § 46b-44).

Connecticut applies an income tax residency framework that distinguishes between domicile‑based residency and statutory residency. Under Conn. Gen. Stat. § 12‑701(a)(1), an individual is considered a Connecticut resident for income tax purposes if the person:

• is domiciled in Connecticut; or
• meets the statutory resident test by maintaining a Connecticut permanent place of abode for the entire tax year and spending more than 183 days in the state.

For those claiming non-residency despite historic Connecticut ties, the regulation (Conn. Agencies Regs. § 12‑701(a)(1)‑1) sets out a narrow exception: a Connecticut domiciliary will be treated as a non-resident only if the individual:

• maintains no Connecticut abode during the full tax year;
• maintains a permanent abode outside Connecticut for the full year; and
• spends no more than 30 days in Connecticut (during the full year).

The regulation also adopts strict day‑counting rules, generally treating any part of a day spent in Connecticut as a Connecticut day. Connecticut’s approach mirrors its domicile principles in the estate tax context: long‑term patterns of life, family ties, property decisions and personal connections matter far more than administrative steps. Courts examine the individual’s conduct holistically to determine whether the taxpayer truly abandoned Connecticut as a permanent home.

The leading authority on this issue remains Amen v Law (Conn. Super. Ct. Tax Session 2005). In Amen, taxpayers moved to Belgium for an expatriate corporate assignment. Despite several years abroad, the court held they did not abandon Connecticut domicile because they retained their Connecticut home (leased on short‑term arrangements), maintained ties to family and social institutions, and expected to return after the assignment. The court emphasised that a foreign posting undertaken for employment – particularly one expected to be temporary – does not by itself establish a new foreign domicile. However, the Amen taxpayers qualified as non-residents for 1997 because they had no Connecticut abode that year, had a permanent abode outside of Connecticut and spent fewer than 30 days in Connecticut, satisfying the three‑part regulatory exception.

Another significant Connecticut decision is Chatterjee v Commissioner (Conn. Super. Ct. 2003; aff’d 2006 on jurisdiction), which involved taxpayers maintaining a weekend home in Greenwich while spending substantial time in New York and India. After being determined to be New York domiciliaries for New York audit purposes, the taxpayers sought Connecticut refunds on the basis that they were not Connecticut residents, but the courts (the Connecticut Supreme Court affirming the Connecticut trial court) concluded that owning a residence in Connecticut or filing Connecticut tax returns does not necessarily establish a domicile but rather a totality of circumstances, and the conclusion was that Connecticut courts may deny tax relief where the taxpayer fails to meet statutory requirements. The case highlights how multi‑state factual patterns, conflicting state determinations and secondary Connecticut residences complicate claims of non-residency.

Together, Amen and Chatterjee illustrate Connecticut’s consistent focus on conduct, continuity and genuine intent. Even when individuals have a substantial overseas or multi‑state presence, the state will look closely at retained Connecticut ties – including homes, family connections and personal arrangements – before concluding that Connecticut domicile has been relinquished

In Connecticut, in the absence of a will, or if the heirs and distributees under a will are indefinite, the probate court will determine the heirs and distributees of an estate.

If a decedent who dies wholly or partially intestate is survived by a spouse and has no issue or parent, the surviving spouse is entitled to take the entire intestate estate, absolutely.

If, instead, such decedent is survived by a spouse and a parent or parents but has no issue, the surviving spouse is entitled to take the first USD100,000 plus three-quarters of the balance of the intestate estate, absolutely. The residue of the decedent’s intestate estate is to be distributed equally to the parent or parents of the decedent.

If such decedent is survived by a spouse and issue, and all of the surviving issue are also issue of the spouse, the surviving spouse is entitled to take the first USD100,000 plus one-half of the balance of the intestate estate, absolutely.

Finally, if such decedent is survived by a spouse and issue, and not all of the surviving issue are also issue of the spouse, the surviving spouse is entitled to take one-half of the intestate estate, absolutely. The residue of the decedent’s intestate estate is to be distributed equally among the decedent’s children, with any share for a deceased child being paid to legal representatives of such deceased child.

If an intestate decedent dies and is not survived by a spouse, a parent or any issue, the decedent’s intestate estate will be distributed equally to the decedent’s brothers and sisters. If no brother or sister survives such decedent, the decedent’s intestate estate will be distributed equally to the next of kin, as determined by the rule of the civil law, in equal degree, or if none, to the stepchildren.

In Connecticut, the surviving spouse may elect to take a statutory share of the real and personal property passing under the will of the deceased spouse. “Statutory share” means a life estate of one-third in value of all the property passing under the will, after the payment of all debts and charges against the estate. Estate taxes do not count as charges; the statutory share is to be calculated based on the pre-tax value of the estate, as of the date of distribution (and not as of the date of death). Notably, assets held in a revocable trust created and funded before a decedent’s death are not subject to the right of election.

Spouses may waive their right to the statutory share, by written contract entered into before or after marriage, if either party has received from the other what was intended as a provision in lieu of the statutory share or regardless of the same.

Under Connecticut law, marriage alone does not make one spouse automatically own or have an interest in the other spouse’s property acquired before or during the marriage, unless the title or ownership is otherwise established (eg, joint tenancy, tenancy by the entirety). Each spouse has full power to receive and convey property as if unmarried.

Connecticut is not a community property state; instead, it is an all-property equitable distribution state. That said, the Connecticut Uniform Disposition of Community Property Rights at Death Act protects and preserves community property rights with respect to assets acquired in a community property state after moving to Connecticut.

There is no general statutory requirement under Connecticut succession law whereby a spouse must obtain the other spouse’s consent to transfer or gift property during life (real or personal) if the transferring spouse is the sole owner and the property is solely titled in their name. A spouse’s right of succession arises at death, not during life.

A married owner can sell, gift, encumber or otherwise transfer assets during life even if doing so reduces what the surviving spouse will get at death. Connecticut cases have historically noted that a spouse may dispose of property during life without consent; see, for example, Harris v Spencer, 71 Conn. 233, 41 A. 773, 774 (Conn. 1898) and Hartford-Connecticut Tr. Co. v Lawrence, 106 Conn. 178, 138 A. 159, 161 (Conn. 1927).

Connecticut imposes a gift tax regime that generally follows federal gift tax principles; gifts to a spouse are tolerated with special marital gift tax rules. There is no state statute that invalidates gifts by one spouse to unrelated third parties merely because they reduce what the other spouse might inherit at death.

Connecticut does not have a statutory provision that automatically voids or “claws back” lifetime gifts on the basis that they were made to defeat a spouse’s right to succeed at death. Unlike some jurisdictions with specific elective share augmentation statutes, Connecticut’s elective share statute does not expressly invalidate pre-death transfers nor treat all lifetime gifts as part of the decedent’s estate.

Connecticut has adopted the Connecticut Premarital Agreement Act, codified at Conn. Gen. Stat. §§ 46b-36a et seq, which governs the enforceability of prenuptial agreements executed on or after 1 October 1995. Under this statute, prenuptial agreements are generally enforceable and can be used to address a wide range of issues, including the making of a will, trust or other arrangement to carry out the provisions of the agreement, ownership rights in and disposition of the death benefit from a life insurance policy and any other matter.

For a prenuptial agreement to be valid and enforceable in Connecticut, it must be in writing and signed by both parties and entered into voluntarily, without duress, coercion or undue influence. Such an agreement is enforceable without consideration. Before signing, each party must disclose their financial situation to the other, covering assets, liabilities and income. Each party should be given a reasonable opportunity to consult with their own attorney. The agreement must be fair and equitable at the time it was executed and when enforcement is sought. Provisions that violate public policy (eg, those attempting to override child support rights) are unenforceable.

Postnuptial agreements are not governed by a specific Connecticut statute but are recognised and enforceable under common law as contracts. The Connecticut Supreme Court held in Bedrick v Bedrick, 300 Conn. 691, 707, 17 A.3d 17, 29 (2011), that postnuptial agreements are valid if they meet standard contract principles and are fair and equitable when made, without unconscionability at dissolution. Postnuptial agreements in Connecticut must be entered into voluntarily, without undue influence, fraud, coercion or duress. Each spouse must provide full, fair and reasonable disclosure of all financial information, including separate and joint property, obligations and income. The terms must be fair and equitable at the time the agreement is made and not unconscionable at the time of divorce or enforcement. General principles of contracts apply.

Connecticut is currently the only US state with its own state-level gift tax. This means that transfers of property made during life – including real estate, cash, business interests and other assets – can trigger a Connecticut gift tax.

For residents of Connecticut, the gift tax applies to all transfers of property, except the transfer of tangible personal property and real property having a situs outside the state of Connecticut. For non-residents of Connecticut, the gift tax applies to all transfers of real estate or tangible personal property located within the state of Connecticut.

Connecticut uses a unified estate and gift tax system, meaning that the same lifetime exemption applies to gifts made during life and to transfers at death. The lifetime exemption is tied to the federal exemption – for 2026, that is USD15 million per individual. Connecticut gift tax on lifetime transfers is not due unless an individual’s cumulative taxable gifts exceed the lifetime exemption. Once the lifetime exemption is exceeded, Connecticut imposes a flat 12% tax on the portion of the lifetime gifts that exceed the exemption.

Even if no tax is due, Connecticut generally requires a state gift tax return (Form CT-706/709) to be filed if an individual makes a taxable gift during the year that is above the annual federal exclusion amount (in 2026, USD19,000 per donor per donee).

Gifts that qualify for the federal exclusion (tuition, medical expenses, annual exclusion gifts, spousal gifts) are also excluded from Connecticut gift tax. Gifts to a non-US citizen spouse do not qualify for the marital deduction; however, the first USD190,000 of gifts made to a spouse who is not a US citizen is excluded from the Connecticut total amount of gifts.

Connecticut does not have an inheritance tax, meaning that Connecticut does not impose a tax on the beneficiary based on what they receive after someone’s death.

Connecticut’s estate tax applies to a Connecticut taxable estate that exceeds the state estate tax exemption amount. Currently, the Connecticut estate tax exemption amount is the same as the federal estate tax exemption amount, which is USD15 million.

A resident estate (if the decedent was domiciled in Connecticut) is taxed on all property, worldwide. A non-resident estate is taxed only on real property and tangible personal property located in Connecticut.

If the taxable estate exceeds the federal basic exclusion amount, the estate must file a Form CT-706/709 and pay tax at a flat rate of 12% of the excess over the federal basic exclusion amount.

While Connecticut does not impose a separate inheritance tax, basis in inherited property is determined under the federal income tax rules. Accordingly, when property is acquired from a decedent at death, the recipient’s tax basis in the property is generally the fair market value of the property at the decedent’s date of death.

Notable Local Variations

Connecticut does not recognise estate tax portability, meaning that a married individual cannot transfer unused Connecticut exemption from a deceased spouse. Accordingly, in Connecticut, a married couple may use lifetime gifts or bypass trusts to capture both spouses’ exemptions prior to the death of the second spouse,

In Connecticut, given the state gift tax, annual exclusion gifting is a basic and foundational strategy. Every individual may make a gift of up to USD19,000 to any other individual. Gifts within the annual exclusion do not trigger Connecticut gift tax and do not reduce the Connecticut lifetime exemption amount. No state gift tax return is required.

Individuals who own what will become probate property (property that is owned by an individual and that does not name a beneficiary) at death regularly fund revocable trusts during lifetime. Assets without beneficiary designations that are owned in a revocable trust, as opposed to by an individual, are still subject to a statutory probate fee, but will pass outside of probate. Assets that pass outside of probate are not subject to ongoing court supervision. A revocable trust also provides privacy, as a will becomes public when filed with the probate court, but a revocable trust does not.

Another way to avoid probate is to name beneficiaries where permissible, such as with respect to life insurance policies, retirement accounts and transfer-on-death or payable-on-death accounts. Under Section 14-16 of the Connecticut General Statutes, a vehicle owner may designate a beneficiary to assume ownership of the vehicle upon the death of the initial owner, by writing on the vehicle registration. Unlike certain other states, Connecticut does not recognise transfer-on-death deeds for real estate.

Lifetime gifts using the Connecticut lifetime exemption amount reduce the size of the taxable estate at death and are useful when the value of assets is temporarily depressed. Individuals commonly transfer marketable securities, business interests, real estate and interests in family entities (often discounted) via lifetime gifts. Gifts can be made directly to individuals or to irrevocable trusts (including grantor trusts and complex trusts, dynasty trusts, spousal lifetime access trusts and self-settled asset protection trusts), to family limited partnerships and/or to entities, such as LLCs. Connecticut law allows for directed trusts. Lifetime gifts or sales, or a combination thereof , of life insurance policies to grantor trusts that are drafted to specifically own and maintain life insurance policies are also commonly used to transfer wealth to the next generation and to provide liquidity to an estate.

Connecticut statutory law provides that Connecticut real property and tangible personal property that is owned by a limited liability company that is disregarded for federal income tax purposes is to be treated as being personally owned by the decedent and therefore subject to Connecticut estate tax. Accordingly, the use of a single-member limited liability company, or other pass-through entity, to own real property located in the state of Connecticut will not avoid Connecticut estate tax.

In the current and evolving virtual landscape, it is important to broaden the scope of succession planning to include digital assets. Connecticut has adopted the Connecticut Revised Uniform Fiduciary Access to Digital Assets Act, which enables an individual to grant a fiduciary access to digital assets. A fiduciary appointment under the act can be made by a last will and testament, by trust document, or by a power of attorney.

The term “digital asset” refers to an electronic record in which an individual has a right or an interest. Digital assets can broadly be thought of as something created or stored digitally, such as online accounts, email accounts, social media accounts, cryptocurrencies, online written records and websites.

When planning for the succession of digital assets, an individual should co-ordinate between the specific user guidance of the platform where the digital asset is accessed, and the individual’s estate planning documents. Without co-ordination, access to certain digital assets may be blocked. An online tool can be used to direct the person who maintains the electronic platform of the digital asset (referred to as the “custodian”) to disclose to a designated recipient the individual’s digital asset, including the electronic communications. Access to digital assets can be granted in whole or in part.

Where a fiduciary seeks to access a digital asset, he or she will be required to furnish:

• a written request for disclosure;
• a certified copy of the death certificate of the user;
• a certificate of appointment as the fiduciary;
• a copy of the will, trust, power of attorney or other records evidencing the user’s consent to the disclosure of the content of the electronic communicates (unless otherwise already directed by the user through an online tool); and
• the account identifier for the user’s account, evidence linking the account to the user, or a court order identifying that the user had a specific account with the custodian.

For best results, an individual should clearly state in a last will and testament or a will substitute (such as a revocable trust) the digital assets to which the appointed fiduciary is granted or denied access. Detailed information regarding account names and identifying information should be provided in a separate non-public document.

Family business succession planning is common due to the state’s relatively high concentration of closely held businesses in joint ventures, financial services, healthcare, aerospace and real estate. Planning frequently uses entity‑based structures such as family limited partnerships or LLCs to facilitate gradual ownership transfers, support valuation particulars and centralise control, often combined with trust structures – including non‑grantor trusts – to address long‑term governance, asset protection, and state income and transfer tax considerations.

Insurance‑funded buy‑sell arrangements are subject to leading cases such as Connelly v United States (June 2024), where the US Supreme Court held unanimously (9–0) that life insurance proceeds payable to a corporation must be included in the corporation’s fair market value for federal estate tax purposes at the deceased shareholder’s death, even when the proceeds are contractually obligated to be used to redeem a deceased shareholder’s interest. There are also regular understanding and use of ownership transition plans to provide management continuity and liquidity when needed.

Succession planning is regularly done both by business owners and by fund principals. In either case, gifts to intentionally defective grantor trusts, the use of grantor retained annuity trusts (GRATs), and for those who are charitably inclined the use of charitable remainder trusts (CRTs) are commonly employed to facilitate tax‑efficient transfers of appreciating interests or investments ancillary to the fund interests and/or business. Charitable planning plays a meaningful role for many Connecticut families, with lifetime and testamentary gifts to private foundations, donor‑advised funds and charitable trusts frequently integrated alongside business succession objectives.

Connecticut case law provides guidance on governance and ownership transition risks.

• In Sturm v Harb Development, LLC, 298 Conn. 124, 2 A.3d 859 (2010), the Connecticut Supreme Court emphasised that LLC members are bound by the contractual and statutory obligations set forth in their operating agreements – reinforcing the need for carefully drafted transition, voting and buy‑sell provisions.
• Saunders v Firtel, 293 Conn. 515, 978 A.2d 487 (2009), further demonstrates that fiduciary duties among owners of closely held businesses can be significant; majority owners may owe partner‑like obligations to minority family members, making clarity in compensation, control and management provisions essential.
• In valuation and buyout contexts, Coppola v Bearing Inspection Services, Inc., 201 Conn. 455, 518 A.2d 1030 (1986), remains influential, underscoring the need for explicit valuation methodologies in agreements to avoid disputes during redemptions or ownership shifts.

Statutory rules governing transferability – such as share transfer limits under Conn. Gen. Stat. § 33‑683 and transferee rights limitations under § 34‑259b – can restrict or facilitate lifetime gifting, phased transfers or family‑level buyouts. As a result, business owners must ensure that operating agreements, shareholder agreements and partnership agreements are drafted or revised to support the desired succession structure.

Trusts, family limited partnerships and manager‑managed LLCs often serve as vehicles for both succession and estate planning. These structures operate under the Connecticut Uniform Trust Code (Conn. Gen. Stat. §§ 45a‑501 to 45a‑599g) and the state’s LLC and partnership statutes. Entity conversion and domestication rules (Conn. Gen. Stat. §§ 34‑600 to 34‑647) also allow businesses to realign their structure to achieve governance or tax efficiencies without interrupting operations.

When succession planning involves sales to key employees or outside buyers rather than family members, additional legal frameworks become relevant. Connecticut’s employment statutes, including restrictions on non‑competition agreements (Conn. Gen. Stat. § 31‑50b et seq) and wage payment rules (Conn. Gen. Stat. §§ 31‑70 to 31‑76k), may influence incentive structures, retention plans and transitional management arrangements.

Connecticut law allows for a wide range of trusts and planning vehicles for both residents and non-residents, supported by the recently adopted Connecticut Uniform Trust Code (CUTC), which was codified in Chapter 802c of the Connecticut General Statutes and came into effect on 1 January 2020. The CUTC governs the creation, administration and enforcement of revocable and irrevocable trusts. Lifetime trusts and testamentary trusts may be created. Testamentary trusts can be created through a will but would be subject to probate court jurisdiction for ongoing supervision.

Connecticut levies both a state estate tax and the country’s only state-level gift tax, which function in tandem with the federal transfer tax regime. The state’s estate and gift tax exemptions mirror the federal exemption, set at USD15 million per individual in 2026.

Revocable living trusts are widely used by Connecticut residents for probate avoidance, incapacity planning and administrative efficiency. Because a settlor may amend or revoke the trust during life, the trust remains a flexible estate planning tool, and is particularly useful for individuals with multi-state assets and a need for estate tax planning.

Irrevocable trusts – including qualified personal residence trusts, grantor annuity trusts, life insurance trusts and other gifting trusts – are employed by residents and non-residents for tax planning, asset protection and long-term wealth transfer. For charitable and estate planning, residents and non-residents may create charitable trusts (intending to qualify as a nonprofit organisation, perhaps), charitable lead trusts or charitable remainder trusts.

Connecticut law enforces spendthrift clauses that can shield trust assets from creditor claims. Connecticut also has an 800-year perpetuity period, which is attractive and helpful for dynastic and generational planning.

Beyond trusts, residents and non-residents can also incorporate a Connecticut non-stock corporation to qualify it as a public charity or private foundation under Section 501(c)(3) of the Internal Revenue Code. This allows for ongoing charitable, income tax and estate tax planning.

Connecticut expressly authorises directed trusts under the Connecticut Uniform Directed Trust Act (Conn. Gen. Stat. § 45a-500b). This structure is desirable since it enhances flexibility and control, allowing a settlor to divide fiduciary responsibilities among investment advisers, distribution committees and administrative trustees. It may be ideal for holding unique or illiquid assets.

Connecticut enacted the Connecticut Qualified Dispositions in Trust Act, codified in Conn. Gen. Stat. §§ 45a-487j through 45a-487r, which authorises certain types of irrevocable self-settled trusts, often referred to as “qualified disposition trusts”. Such trusts must have a qualified Connecticut trustee, include a spendthrift clause, and choose Connecticut law and allow a grantor to transfer assets, retain beneficiary status and shield assets from creditor claims.

In effect since 1 January 2025, the Connecticut Uniform Trust Decanting Act, codified in Conn. Gen. Stat. §§ 54a-545b through 45a-545cc, allows trustees of most irrevocable trusts to distribute assets into a new trust with modified terms without court approval. It requires the trustee to have discretionary distribution power and act in accordance with the trustee’s fiduciary duties. The statutory ability to “decant” provides flexibility to improve trust terms, change administrative provisions or alter beneficiary interests, except for charitable beneficiaries.

Connecticut regulates fiduciaries through a combination of banking oversight, licensing requirements and statutory trust administration rules. Professional fiduciaries – whether state‑chartered trust companies, banks or other corporate entities authorised to act in a fiduciary capacity – operate under a regulatory framework designed to ensure financial stability, competence and accountability. Entities seeking to offer fiduciary services must:

• obtain authorisation from the Department of Banking pursuant to Conn. Gen. Stat. §§ 36a‑70 to 36a‑71;
• meet capitalisation and governance standards; and
• employ qualified trust officers consistent with trust department regulations under Conn. Gen. Stat. § 36a‑365.

Ongoing examinations under Conn. Gen. Stat. §§ 36a‑17 and 36a‑21 help ensure that fiduciary activities are conducted responsibly and in accordance with state law.

Trust administration is governed principally by the Connecticut Uniform Trust Code (Conn. Gen. Stat. §§ 45a‑499a to 45a‑529f), which establishes core fiduciary duties, including the duty to administer the trust in good faith (§ 45a‑499c), to act in accordance with the trust’s terms (§ 45a‑499b) and to act loyally and solely in the interests of beneficiaries (§ 45a‑541b). Connecticut’s Prudent Investor Act (Conn. Gen. Stat. §§ 45a‑541 to 45a‑541l) requires trustees to manage trust assets with the care, skill and diversification expected of a prudent investor in light of the trust’s purposes.

Connecticut case law reinforces the intensity of these duties. In Konover v Kolodney, 202 Conn. 40 (1987), the Supreme Court emphasised that trustees must exercise independent judgement and cannot simply defer to outside advisers when doing so would compromise loyalty or prudence. Similarly, cases such as Murphy v Wakelee, 247 Conn. 396 (1998), underscore that courts will strictly enforce fiduciary obligations and may surcharge trustees who fail to act in beneficiaries’ interests or who mismanage trust property. These decisions illustrate the level of scrutiny Connecticut courts apply to both individual and professional fiduciaries.

Additional fiduciary obligations arise under Connecticut’s probate statutes. Trustees must comply with accounting and reporting requirements under Conn. Gen. Stat. §§ 45a‑175 to 45a‑204, and probate courts exercise supervisory authority under Conn. Gen. Stat. § 45a‑98, including the ability to order accountings, remove fiduciaries or compel compliance. When trusts hold closely held business interests, trustees must also satisfy statutory duties relating to special assets, including delegation (§ 45a‑541i) and management of closely held business interests (§ 45a‑541k), and Connecticut courts have treated these obligations as requiring heightened attentiveness to conflicts of interest and valuation integrity.

Resident trusts – generally those created by a Connecticut domiciliary or established under the will of a decedent domiciled in the state – are taxed on Connecticut taxable income under Conn. Gen. Stat. § 12‑701(a)(4) and related definitions in § 12‑700. Non-resident trusts are taxed solely on Connecticut‑source income, such as income derived from Connecticut real property or business activities, pursuant to Conn. Gen. Stat. §§ 12‑711 and 12‑712. These distinctions are especially important when a trust holds an interest in a business operating or owning assets in Connecticut, as entity‑level sourcing rules may pass through to the trust.

Connecticut regulations provide detailed rules for calculating taxable income, applying the fiduciary adjustment, and allocating income among beneficiaries. The fiduciary adjustment – governed by Conn. Gen. Stat. § 12‑701(a)(20) and Conn. Agencies Regs. § 12‑701(a)(20)‑1 – requires trustees to reconcile differences between federal and Connecticut rules when determining the taxable base. Adjustments may include add‑backs for Connecticut‑sourced partnership or S‑corporation income, disallowed tax‑exempt interest, or beneficiary‑level allocations unique to Connecticut law.

On 12 November 2008, the Connecticut Supreme Court ruled in Kerrigan v Commissioner of Public Health that the state’s prohibition on same-sex marriage violated the Connecticut Constitution. The legalisation of same-sex marriage afforded same-sex married couples the same privileges that heterosexual couples in Connecticut had enjoyed. However, this ruling only established a right within the state of Connecticut. It was not until 2015 that the Supreme Court legalised same-sex marriage across the United States in the landmark case of Obergefell v Hodges.

Connecticut allows surviving spouses to take an elective share of the estate assets, amounting to one-third of the assets passing by will (Conn. Gen. Stat. § 45a-436). If a bequest to a surviving spouse does not amount to one-third of the probate estate, the surviving spouse can file a notice in the probate court for the statutory share. However, property outside of the probate estate is not included in the statutory share. Jointly held property, life insurance proceeds and assets funded into a revocable or irrevocable trust during lifetime are not subject to this election (see Dalia v Lawrence, 226 Conn. 51, 627 A.2d 392 (1993); Cherniack v Home Nat. Bank & Trust Co. of Meriden, 151 Conn. 367, 198 A.2d 58 (1964)). Funding a revocable trust during lifetime can ensure that assets pass in the desired manner.

Effective estate planning should take unique parent-child relationships into consideration. There are many conceivable parent-child relationships which an individual may not inherently think of as creating a legal obligation under intestate succession. However, under the Connecticut Parentage Act, other parental relationships can exist outside of the typical biological parents. Parentage can be established through court adjudication or a written acknowledgement of parentage. Once such relationship is established, the child can have a right to inheritance through intestate succession. Alternatively, estate planning can effectively include or exclude certain children and descendants regardless of legal parentage. It is important to review defined classes of beneficiaries to ensure that the intended beneficiaries are included.

Another consideration becoming more commonplace as technology advances is posthumously conceived children. Connecticut statute provides that a child of the decedent who is conceived and born after the death of the decedent is deemed to have been born during the decedent’s lifetime as long as certain factors are present.

• First, the decedent must have prepared a written document, signed by the decedent and the decedent’s spouse, which specifically states that his sperm or her egg may be used for the posthumous conception of a child and that his or her spouse has authority to exercise custody over such reproductive material.
• Second, the posthumously conceived child must be in utero no later than one year after the date of death of the decedent.

The surviving spouse must provide the documentation to the fiduciary of the decedent’s estate and provide the probate court with notice of such document (Conn. Gen. Stat. § 45a-785).

Common law marriage is generally established when two people cohabitate and hold themselves out as a married couple without having obtained a marriage licence. This form of marriage is not recognised in Connecticut and is only permitted in a minority of states. However, if a couple moves to Connecticut after they validly establish a common law marriage in a common law marriage state, Connecticut will recognise such marriage to be lawful unless the marriage would otherwise be prohibited by statute (Conn. Gen. Stat. § 46b-28a).

Non-Resident Decedents and Connecticut Situs Rules

For non-resident decedents, Connecticut taxes only real property and tangible personal property located within the state under Conn. Gen. Stat. § 12‑391(g); it generally excludes intangible personal property unless that property has acquired a business situs in Connecticut. The Department of Revenue Services’ Nonresident Estate Tax Guidelines reinforce that Connecticut‑situs real estate and tangible property are taxable, while stocks, bonds, partnership interests and cash typically are not, unless connected to a Connecticut business. Connecticut employs a proportional apportionment formula, also codified in § 12‑391(g), multiplying the total computed estate tax by a fraction representing Connecticut‑situs property over the total gross estate. This ensures that Connecticut taxes only its jurisdictionally based share.

Treatment of Foreign Nationals Holding Connecticut Assets

Foreign nationals who die owning Connecticut‑situs property are generally required to open a Connecticut probate proceeding under Conn. Gen. Stat. §§ 45a‑287 and 45a‑303, which govern ancillary and original probate jurisdiction. Connecticut probate courts treat these matters as independent administrations, to ensure proper payment of state creditors, assessment of state estate tax obligations and lawful transfer of in‑state property. Probate may be avoided where assets pass via trust (governed by the Connecticut Uniform Trust Code, Conn. Gen. Stat. §§ 45a‑499a to 45a‑529f), through business entities or via survivorship rights; however, tax liability may still arise if Connecticut‑situs assets are owned by the decedent at death.

Situs‑Based Estate Tax Exposure

Non-residents (including foreign nationals) are taxed on Connecticut real estate and tangible personal property under § 12‑391(g). This may include business assets, art, vehicles, boats and other watercraft, or equipment physically located in Connecticut, including on its shoreline.

Probate Requirements for Foreign Nationals

Connecticut probate courts generally require local administration of Connecticut‑situs assets under §§ 45a‑287 and 45a‑303, even when a foreign estate exists, unless ownership structures (trust, entity, survivorship) avoid probate.