65 CBJ 53. CONNECTICUT PROBATE LAW 1990.

• Author: By M. KATHERINE GLASSMAN

Connecticut Bar Journal

Volume 65.

65 CBJ 53.

CONNECTICUT PROBATE LAW 1990

53CONNECTICUT PROBATE LAW 1990By M. KATHERINE GLASSMAN(fn*) I. LEGISLATION

1. Succession Taxes

   In an effort to raise revenue for the State of Connecticut more quickly, the legislature made several significant changes to the succession tax laws.(fn1) Perhaps the most important of these changes is that a succession tax return is now required to be filed within six months after a decedent's date of death, rather than nine months, as was the case previously(fn2)

   A second important change concerns the accrual of interest on due, but unpaid, taxes. Under prior law, if a succession tax was not paid within the nine-month period after a decedent's death, interest would accrue on the unpaid tax at the rate of 15% per annum until the tax was paid, except when the commissioner had granted an extension to file the return. In such a case, interest accrued on the unpaid tax at the rate of 11.25%.(fn3) Under the new law, this exception has been eliminated, so that interest will accrue on unpaid succession taxes at the rate of 15%, even if the commissioner has granted an extension for filing the return.(fn4)

   54A third change concerns the interest payable by the commissioner on the overpayment of a succession tax. Formerly, the commissioner paid interest on such overpayments at the rate of .75% for each month or part thereof that elapsed between the ninetieth day after the commissioner's receipt of a claim for refund and the date of the commissioner's notice that a refund was due; under the new provisions, interest is payable at 9% per annum, commencing from the expiration of six months after the decedent's death or the date of payment, whichever is later.(fn5)

   A final change in the succession tax area eliminated the one dollar fee payable upon obtaining a certificate of release of lien for succession taxes.(fn6)

   In a new provision, the legislature has granted the attorney general the authority to bring suit in other states to collect any tax legally due this state, if so requested by the commissioner.(fn7)

2. Health Care Powers of Attorney

   The legislature amended the statutory short form power of attorney by adding the category of "health care decisions" as one of the areas in which a principal may designate an agent to act on his behalf.(fn8) This new law provides that if, in the judgment of an individual's attending physician, the individual is unable to receive and effectively evaluate information pertaining to any health care decision, or to effectively and rationally communicate such decision, his agent may consent to, refuse to consent to, or withdraw consent to, any medical treatment except that designed solely for the purpose of maintaining physical comfort, the withdrawal of life support systems or the withdrawal of nutrition

   55 or hydration.(fn9)

3. Statutory Share

   Section 45-273a, governing a surviving spouse's right to a share of a deceased spouse's estate, was amended by two acts.(fn10) One act amended the statute in two respects, in each case reducing the applicable time period from 210 to 150 days.(fn11) In the first instance, the statute now provides that, where a deceased spouse has made provision for the surviving spouse by will, and such survivor wishes to elect against the will, an election must be lodged with the probate court not later than 150 days from the date of appointment of the first fiduciary. In the second instance, the statute now similarly provides that, where a deceased spouse has not made provision for the survivor by will, notice of the surviving spouse's intention to take a life use of one-third of the estate must be filed with the appropriate probate court not later than 150 days from the date of appointment of the first fiduciary.

   The second act designates the share to which a surviving spouse is entitled as the "statutory share," and provides a definition for that term.(fn12) The Act also reorganized Section 45-Z73a into two

   56 separate sections, one containing the provisions dealing with the statutory share, and the other dealing with intestate succession.(fn13)

4. Creditor's Claims

   A number of statutory provisions regarding the claims of creditors were amended, with each amendment (as with the statutory share) reducing the applicable time period from 210 to 150 days.(fn14)

5. Trusts for Disabled Persons

   Legislation was enacted in the 1990 session to empower Planned Lifetime Assistance of Connecticut, Inc. ("PLAN") to exercise certain fiduciary powers.(fn15) This legislation also requires

   57PLAN to establish a charitable trust to benefit any person with disabilities for whom an individual trust has not been established, as well as to make periodic reports to the General Assembly.(fn16) The grantor of a private trust is permitted to enter into an agreement whereby a percentage of the remainder of the trust may be transferred to the charitable trust upon the death of the beneficiary.(fn17)

6. Estate Administration

   When a person who has been supported or cared for by the state through public assistance or in an institution leaves only a personal estate that does not exceed a certain value, there is a simplified procedure in which the commissioner of administrative services may file a claim in the probate court to settle the estate and to obtain reimbursement from it for the care or support provided.(fn18) Formerly, only an estate whose value did not exceed $10,000 was eligible for this simplified procedure; this maximum amount has now been increased to $20,000, thereby increasing the number of estates eligible for it.(fn19)

7. Intestacy

   The provisions in Section 45-273a regarding a surviving spouse s share of a deceased spouse's estate in the case of intestacy were deleted.(fn20) These provisions have been somewhat modified and re-enacted and will now be contained in a separate section 21 of the statutes.

   58H. Probate Courts

   1. Entry Fees

      The entry fee for each application, petition or motion filed with the probate court to commence a matter before it was raised from $50 to $90.(fn22) The filing fees remain unchanged for (a) matters involving decedent's estates; (b) periodic accounts of trustees, guardians, conservators or other fiduciaries; and (c) any document on which the court is not required to act.(fn23)

   2. Costs

      Section 45-17a, which deals with Probate Court costs, has been repealed, and new legislation has been enacted in its place.(fn24) The new law reflects the increase in the entry fee from $50 to $90, as enacted by Public Act 90-135, but otherwise does not revise the cost schedule previously in effect. All subsections of Section 4517a are still contained in the new Act, although they have been reorganized and sometimes modified to make the provisions clearer.

   3. Services to Indigent Persons

      The judicial Department formerly was responsible for establishing fees for services provided to indigent persons appearing before the Probate Court, and the fees for these services were required to be paid from the judicial Department appropriations. Under a new law, the Probate Court Administrator is now responsible for establishing these fees, and such fees are to be paid from the Probate Court Administration fund.(fn25)

      594. Council on Probate Judicial Conduct

      Several changes were made to the laws governing the Council on Probate Judicial Conduct (the "Council").(fn26) A new act authorizes the Council to "admonish" a Judge who has engaged in judicial misconduct. Under prior law, the word "reprimand" was used instead of "admonish."(fn27) In making this substitution, the Act appears to be establishing a less harsh form of public criticism for the misconduct of probate Judges. The Act also provides that a complaint for judicial misconduct against a probate Judge must be brought within eight years from the date the alleged misconduct occurred.(fn28)

      1. Certificates of Descent, Devise or Distribution

         A Probate Court may now issue certificates of descent, devise or distribution prior to its acceptance of the final administration account if it finds that issuing such a certificate is in the best interests of the parties.(fn29)

      2. CASES

1. Succession Taxes

   Anna G. Schwartz created a testamentary trust under which her husband was a beneficiary. According to the terms of the trust, the husband was entitled to all of the net income of the trust during his lifetime, and he was also entitled to invade the trust principal. Upon the husband's death, the trust estate was to pass to the decedent's son. In calculating the succession tax, the executor did not include any amount related to the right to invade the trust principal, because he did not consider that right to be taxable to the husband. The commissioner disagreed with this position, although he did not object to the executor's treatment of this invasion right until after the time provided in Section 12-359(b).(fn30)

   60In this case, Bannon v. Schwartz,(fn31) the issue presented to the Supreme Court was whether an executor's characterization of a right to withdraw trust principal in calculating the succession tax was a "valuation" or "concession of taxability" to which the commissioner was required to object under Section 12-359(b).(fn32) The Supreme Court sustained the position of the commissioner, holding that the succession tax treatment of the husband's right to invade the trust principal affected only the allocation of the net taxable estate between the husband and son; thus, it affected only the rate at which the trust assets...