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Hetherington: 2010 is the Year to Die In
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| State Rep. John Hetherington talks about new changes afoot, or dragging their feet, in Connecticut's estate laws. |
Written by John Hetherington, printed in Wilton Patch
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Wilton Patch
© Copyright 2010 by Wilton Patch. All Rights Reserved.
Published On January 12, 2010
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The year 2010 might be called the year to die for - or the year to die in anyway. Beginning January 1, 2010, the estate of a Connecticut resident amounting to less than $3.5 million will not be subject to tax. Also, the "cliff" is eliminated, so the estate tax is not retroactive even if the deceased was rich enough to leave more than $3.5 million. These changes were enacted last August. But on December 23 remorse apparently struck the Democrats who used their majority to put the estate tax threshold back down to $2 million. Next Governor Rell vetoed the revision which had the effect of restoring the dexclusion at $3.5 million. A session was called to override the veto, but in the end the effort was not made. So the higher exemption stands- at least for now.
There is more. As scheduled under the Bush tax cuts, our national death levy was allowed to die January 1, 2010. As a result, right now many more Connecticut estates will pay no state tax and none will pay a federal estate tax. But before any heirs get too excited, several cautions are in order. There is nothing to prevent Congress or the Connecticut Legislature from passing new estate tax legislation
retroactive to January 1, 2010. In fact, Congress is generally expected to do just that as soon as a health care bill is completed.
Incidentally, it should be noted that if nothing is done by Congress the federal estate tax will come roaring back in 2011 at pre-cut levels. Also it is highly recommended that people review their estate plan with a qualified professional. Some elements, including will provisions dealing with a credit shelter trust, could have unanticipated consequences in the absence of an estate tax. So, while the estate tax stars seem uncommonly well aligned in 2010, it is probably still better to defy the tax collector altogether by not dying.
Other legislation that became effective January 1 carries good and not so good news. In a particularly mean stroke, the real estate conveyance tax now applies to the transfer of foreclosed properties as well as those conveyed in a voluntary sale. The scheduled reduction in the state sales tax from 6% to 5.5% did not happen because the needed stabilization of revenue was not met. The minimum wage in
Connecticut went from $8 to $8.25, which may be good news if you have a job or belong to a union with a contract sparking a wage increase when there is an increase in the minimum wage. If you run a small business or like to offer jobs to beginners, then not so much. Finally, a new law that I was proud to co-sponsor requires health insurance coverage of autism spectrum disorders for children under the age of 14.
So now we must look ahead. In this even year, the regular session of the Legislature begins February 3. It's our job to do our best to make 2010 a happy new year for Connecticut.
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