If you (or a family member) maintain homes or significant ties in more than one state, a recent Connecticut Supreme Court decision is a useful reminder that domicile—your “true, fixed, and permanent home”—can materially affect Connecticut estate tax exposure.
The decision in plain English (Daniels v. Commissioner of Revenue Services / Estate of Jack Anderson)In Daniels v. Commissioner of Revenue Services (Docket No. 21150, released June 16, 2026), the Connecticut Supreme Court addressed a domicile dispute involving the Estate of Jack Anderson, who divided time among homes in Connecticut, Arizona, and Florida. Connecticut’s Department of Revenue Services treated him as a Connecticut resident for estate tax purposes, and the executor challenged that conclusion.
The Court held that the executor must prove the decedent was not domiciled in Connecticut by a preponderance of the evidence (i.e., “more likely than not”)—not by the higher “clear and convincing evidence” standard that the lower court used. The case was reversed and remanded because the lower court applied the wrong standard. Connecticut estate tax guidance now reflects this rule.
The practical effect of this decision is to lower the burden of proof for an executor who claims a decedent was not domiciled in Connecticut. But there still is a burden of proof.
Why it matters if you have homes or ties in multiple statesConnecticut taxes resident estates and nonresident estates differently. If Connecticut treats you as domiciled in Connecticut at death, Connecticut may tax the estate more broadly, including intangible property included in the federal gross estate, regardless of where that property is located. By contrast, if you are a nonresident, Connecticut’s estate tax applies to only Connecticut real property and Connecticut-situs tangible personal property.
Practical, action-oriented steps to help document domicileIf you intend to establish or maintain domicile outside Connecticut (or you want to reduce ambiguity), consider whether your records and actions consistently support that position:

• Track time spent in each state: keep calendars and travel records.
• Align “legal” connections: driver’s license, voter registration, vehicle registration, and primary address should match the intended domicile.
• Be consistent on tax filings and forms: avoid contradictory addresses or residency positions across returns and related documents.
• Review estate planning documents: ensure wills, trusts, powers of attorney, and health care directives reflect the intended domicile.
• Update financial/personal ties: mailing addresses for banks/brokerage, insurance, physicians, memberships, and other recurring relationships.

If an estate will claim Connecticut nonresident status, Connecticut DRS states that the estate must file Form C-3 UGE, State of Connecticut Domicile Declaration, with DRS or the Probate Court depending on jurisdiction. That filing should be consistent with the underlying facts and records.
Next step: let’s review your plan (and your documentation)If you have multiple residences, spend significant time outside Connecticut, or are contemplating a move, I am happy to help you evaluate domicile risk and make sure your estate plan and supporting documentation match your intended home state.

United States v. Karst is a clear warning that stretching out estate tax payments under Section 6166 does not protect trustees from personal liability if they pay themselves before paying the IRS.
Section 6166 allows an estate whose assets consist largely of closely held business interests (generally more than 35% of the adjusted gross estate) to elect to pay part or all of its federal estate tax over time—up to 10 annual installments after a 5‑year interest‑only period. This can help avoid a forced sale of a family business, but it also keeps the IRS’s collection rights open longer.

​In Karst, a Kansas federal district court held co‑trustees personally, jointly, and severally liable for unpaid estate tax, interest, and penalties after they distributed trust assets to themselves even though they knew the estate tax had not been fully paid, and then stopped making the Section 6166 installment payments. Under Section 6324(a)(2), anyone who receives non‑probate property (including trustees and beneficiaries of a revocable trust) can be personally liable for the estate tax up to the value of what they receive. When an estate elects to pay tax in installments under Section 6166, Section 6503(d) pauses the normal 10‑year IRS collection period for as long as the deferral is in effect, which extends the time the IRS has to pursue trustees if payments stop or the election goes into default.
Key points for clients:

• Trustees who receive or control non‑probate assets that are part of the taxable estate must treat unpaid estate tax as a top‑priority debt. Paying themselves or other beneficiaries while the tax is still outstanding can create direct personal liability.
• A Section 6166 election can provide valuable breathing room by allowing installment payments, but it also suspends the IRS’s collection statute during the deferral period. If payments are missed or the plan is abandoned, trustees may face collection well beyond the 10‑year window they might otherwise expect.
• Practical risk‑management steps include closely monitoring Section 6166 payment obligations, documenting decisions about liquidity and how taxes will be paid and avoiding discretionary distributions to trustees or beneficiaries until estate tax liabilities (including interest and penalties) are fully funded or otherwise resolved.

 

Because of COVID, the IRS will not impose failure to file penalties for individuals, trusts, estates and certain other taxpayers for 2019 and 2020, if the returns are filed by September 30, 2022.

There are two bills pending in the New York legislature that would increase the New York estate tax.  Assembly bill 3009 would increase the top New York estate tax rate that applies to estates over $10.1 million from 16% to 20%.  Senate bill 2509 would increase all of the New York estate tax rates by 2%, so that the top estate tax rate would be 18%.  Each of the bills would apply to estates of New York residents who die on or after April 1, 2021.

The IRS recently announced that the Federal estate and gift tax lifetime exemption and the gift tax annual exclusion for 2021.  The estate and gift tax lifetime exemption will be $11,700,000 per person.  The gift tax annual exemption will remain at $15,000.

Recently, attorneys for New York, New Jersey and Connecticut appeared before a three judge panel of the Court of Appeals to appeal a District Court's decision to throw out a lawsuit filed to challenge the cap on deductions for state and local taxes.  The cap was enacted as part of President Trump's 2017 tax reform package.  The attorneys faced tough questioning from the panel about whether courts have the power to interfere with the cap.

Some taxes, such as Connecticut, have enacted laws that permit a business' owner to avoid or minimize the cap on state and local taxes.  Connecticut's pass-through entity tax is an example.  The IRS approved the pass-through entity tax workaround in early November 2020. 

​On April 9 the IRS issued Notice 2020-23.  This Notice amplifies prior Notices regarding the due dates for various tax returns and payments.  It confirms that the due date for individual income tax returns is extended to July 15, 2020.  It also states that the due date for any of the following returns that would otherwise be due between April 1 and July 15 is extended to July 15:  Estate income tax return (Form 1041); Estate estate tax return (Form 706); and Gift tax return (Form 709).  The relief is automatic.  There is no need to contact the IRS or file an extension.  Also postponed to July 15 are quarterly estimated income tax payments (Form 990-W), estimated tax payments for individuals (Form 1040-ES) and estimated income tax payments for estates and trusts (Form 1041-ES).

At a news conference today, Treasury Secretary Mnuchin announced that the IRS has extended the April 15 deadline to pay taxes by 90 days.  Individuals can defer up to $1,000,000 of taxes owed without penalty or interest.  Tax returns must still be filed by April 15.  The administration is considering delaying the estimated tax payments that self-employed workers and businesses pay to the IRS throughout the year. 

Fraud detection experts are advising against abbreviating 2020 when dating documents.  For example, "1/7/20" could be altered to read "1/7/2019" or "1/7/2021."  The article at www.cnn.com/2020/01/04/us/dont-abbreviate-2020-date-fraud-trnd/index.html is helpful.

A common estate planning tool is to leave an IRA to a spouse and then grandchildren.  This allows the payments to be made over the lifetime of a grandchildren after the death of a spouse.  This is known as "stretch" IRA planning.  A provision attached to the current federal appropriations bill would limit stretch IRA planning to 10 years.  The bill is expected to be passed and signed this week.  This will mean leaving retirement benefits to spouses and then children, rather to spouses and then grandchildren.  The required beginning date for distributions will be increased to a age 72.