Our estate planning law firm recently had an elderly client who was selling her home in Connecticut and moving to another state. She bought her home with her husband in 2000 and both of them were listed on the deed as joint tenants with rights of survivorship. Then – in 2003 – the husband died. Now, many years after the house was purchased and several years after the death of her husband, our client was ready to move.
She signed a contract for the sale of her home and her buyer’s lawyer did a title search of the property. The title search revealed that there was no release of the inchoate lien for Connecticut succession (or estate) taxes. The term “inchoate” means “secret.” The State of Connecticut does not record this inchoate lien on the land records of any town. Rather, when someone dies in Connecticut owning an interest in real property, the State of Connecticut has an unrecorded – inchoate – lien (for the taxes) on the decedent’s real estate. This secret lien must be released before you can give clear title to your buyer.
In order to obtain a written release of this lien, our firm first had to provide a succession tax return to the probate court where her home was located. On the return, we reported the husband owned real estate jointly with rights of survivorship. We then determined the value of the house on the husband’s date of death by obtaining a copy of the tax assessor’s card for 2003. We reported one-half of the appraised value on the return. In addition, we provided the court with a certified copy of the husband’s death certificate and a copy of the deed to the two of them.
Once the probate court received these documents, it was able to determine that there were no succession taxes due. The court issued a document entitled Certificate of No Succession Tax and a second document entitled Certificate Releasing the Connecticut Estate Tax Lien. The Release was then recorded on the land records to officially clear title to the home and enable her to give good title to her buyer. If any succession taxes had been due, she would have had to pay the taxes to obtain the Release.
Releasing the State’s inchoate estate tax lien is one of many issues that may need resolution during the home selling or estate administration process. If you have any questions related to what you’ve learned in this blog, please don’t hesitate to call the estate planning attorneys at Cipparone & Zaccaro, PC.
