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In a major development for Connecticut trusts and estates, lawmakers have proposed significant changes to the state's estate tax laws. The proposed legislation, which was introduced on March 25, 2026, aims to overhaul the current tax system and make it more equitable for residents of the state.One of the key provisions of the proposed legislation is the increase in the estate tax exemption threshold. Currently set at $5.49 million, the exemption threshold would be raised to $7 million under the new law. This would mean that estates with a total value below $7 million would not be subject to the state's estate tax, providing relief for many Connecticut residents.Another important aspect of the proposed legislation is the elimination of the "cliff" provision in the estate tax laws. Currently, estates that exceed the exemption threshold are subject to a steep tax rate on the entire value of the estate, rather than just the amount that exceeds the threshold. The new law would eliminate this provision, ensuring that estates are taxed at a more gradual and fair rate.In addition to these changes, the proposed legislation also includes provisions for the taxation of trusts in Connecticut. Trusts would be subject to the state's income tax laws, with certain exemptions and deductions available to trust beneficiaries. This change aims to ensure that trusts are treated more equitably under the tax code and prevent individuals from using trusts to avoid paying taxes on their assets.Overall, the proposed changes to Connecticut's estate tax laws represent a significant step towards creating a more equitable and transparent tax system for residents of the state. Lawmakers are hopeful that the new legislation will help to stimulate economic growth and encourage individuals to invest in Connecticut's future.The proposed legislation is currently under review by the state legislature, and lawmakers are expected to vote on the bill in the coming weeks. If passed, the changes to Connecticut's estate tax laws could have a profound impact on trusts and estates throughout the state, providing much-needed relief for many residents. Stay tuned for updates on this developing story.