Out-of-State Property and the Connecticut Probate Fee: The Exclusion Executors Miss

Connecticut's probate fee is one of the more generous — from the state's perspective — estate assessments in the country. Unlike most states that charge modest flat filing fees, Connecticut calculates its fee as a percentage of the gross estate. For large estates, that percentage generates significant court revenue.

But there is a statutory exclusion that many executors miss entirely: real estate and tangible personal property located outside of Connecticut must be excluded from the fee calculation. Including out-of-state property in the fee basis is a direct, avoidable overpayment to the Probate Court.

How Connecticut Calculates Its Probate Fee

The fee is governed by C.G.S. § 45a-107. It is assessed on the greatest of three figures:

1. The probate inventory (Form PC-440)
2. The Connecticut taxable estate (for state estate tax purposes)
3. The gross estate for federal estate tax purposes

This calculation sweeps in assets that pass outside of probate — joint bank accounts, transfer-on-death investment accounts, life insurance payable to the estate, and living trust assets. Connecticut's fee applies to the gross estate, not just the probate estate.

The statutory fee schedule runs from 1% on amounts between $1,000 and $10,000, down to 0.35% for estates between $10,000 and $500,000, and then 0.25% for the next $1.5 million, with higher rates for estates above $2 million, up to a maximum fee of $40,000.

The Out-of-State Property Exclusion

Buried within C.G.S. § 45a-107 is a clear exclusion: the value of real estate and tangible personal property located outside of Connecticut is excluded from the fee basis calculation.

This means:

• A vacation home in Florida: excluded
• A ski cabin in Vermont: excluded
• A rental property in New York: excluded
• A boat registered and kept in Rhode Island: excluded (tangible personal property)
• A vehicle kept exclusively in another state: potentially excluded

What is not excluded: intangible personal property located anywhere. Bank accounts, brokerage accounts, retirement accounts, and life insurance proceeds are included in the fee basis regardless of where the financial institution is located. The exclusion specifically applies to real estate and tangible personal property with a fixed physical location outside Connecticut.

The Scale of the Potential Overpayment

The impact depends on the estate's total value and where in the fee schedule the out-of-state property falls.

Example 1: A Connecticut resident dies with a $600,000 gross estate including a $150,000 Vermont cabin. Without claiming the exclusion, the fee on $600,000 is:

• $1,865 + 0.25% × $100,000 = $2,115

With the exclusion, the fee basis is $450,000:

• $1,865 + 0.25% × ($450,000 - $500,000)... wait, $450,000 is below $500,000, so:
• $150 + 0.35% × ($450,000 - $10,000) = $150 + $1,540 = $1,690

Savings: approximately $425.

Example 2: A $2,000,000 gross estate including a $400,000 Florida condominium. Without exclusion: the fee is at the $2 million cap value level — $5,615. With the exclusion, basis drops to $1,600,000:

• $1,865 + 0.25% × ($1,600,000 - $500,000) = $1,865 + $2,750 = $4,615

Savings: $1,000.

For larger estates or those with high-value out-of-state real estate, the savings can be considerably greater.

How to Claim the Exclusion

The exclusion is claimed when filing Form CT-706 NT (Connecticut Estate Tax Return for Nontaxable Estates) with the Probate Court. The form requires the executor to itemize the gross estate and identify assets by type and location.

On the CT-706 NT, out-of-state real estate is reported separately from Connecticut real estate, and the exclusion is applied to reduce the fee basis before the court calculates the invoice.

The court does not automatically apply the exclusion. If the executor submits a CT-706 NT that includes out-of-state property in the fee basis without claiming the exclusion, the court calculates the fee on the higher figure and invoices accordingly. Correcting an overpayment after the fact requires amending the return — more administrative work and delay.

Out-of-State Real Estate Still Requires Ancillary Probate

Claiming the Connecticut probate fee exclusion for out-of-state real estate does not eliminate the need to handle that property — it only removes it from Connecticut's fee calculation.

Real estate in other states must be transferred through that state's legal process. In most states, this means ancillary probate — a separate probate proceeding in the state where the real estate is located. A Connecticut executor appointed by the Connecticut Probate Court does not have automatic authority to convey real estate in Vermont or Florida; a Vermont or Florida court must separately authorize the transfer.

Ancillary probate in another state adds cost and administrative effort. Families with out-of-state real estate should factor this in when assessing the total estate administration cost.

Documenting Out-of-State Property for the Exclusion

To successfully claim the exclusion, the executor needs to document:

• The precise location of the property (state and county)
• The property's fair market value as of the date of death
• The nature of the property (real estate vs. tangible personal property)

For real estate, a real estate appraisal or comparable sales analysis is typically needed to establish fair market value. For tangible personal property (vehicles, boats, art), an appraisal or market valuation is appropriate depending on the value.

Keep this documentation in the estate file. The Probate Court may request substantiation if the claimed exclusion is significant and affects the fee calculation materially.

The Spousal Reduction and Out-of-State Exclusion Together

When both the spousal reduction (50% reduction on the portion passing to a surviving spouse) and the out-of-state property exclusion apply simultaneously, the combined effect on the fee basis can be substantial.

For example, an estate with a $2,000,000 gross value that includes $400,000 of out-of-state real estate and where $1,200,000 of the remaining assets pass to a surviving spouse:

• Start with $2,000,000
• Subtract out-of-state property: -$400,000 → $1,600,000 remaining
• Apply spousal reduction to $1,200,000: 50% × $1,200,000 = $600,000 is the reduced value
• Non-spousal remaining: $400,000
• Adjusted fee basis: $600,000 + $400,000 = $1,000,000
• Fee on $1,000,000: $1,865 + 0.25% × $500,000 = $3,115

Versus the fee on the unadjusted $2,000,000 gross estate: $5,615.

Total savings from both adjustments: $2,500.

The Connecticut Probate Process Guide walks through the complete CT-706 NT filing process — including how to correctly claim both the out-of-state property exclusion and the spousal reduction on the same return — so executors submit an accurate fee basis from the start rather than discovering the overpayment after the court has already invoiced.

See more Connecticut guides →