Connecticut asset protection: a high-tax state that quietly protects the home, with a half-million-dollar homestead for a couple

Connecticut is known for high taxes, so it surprises people that it protects the home better than most states do. The homestead exemption is $250,000, and under Connecticut case law it doubles to $500,000 for a married couple who own the residence jointly, which is among the most generous home protection in the country and far ahead of what a high-tax reputation would suggest. That strength is specific to the residence, though. On the investment side, Connecticut’s treatment of an LLC interest is ordinary modern law, and because the state does not recognize tenancy by the entireties, the large homestead is doing the work the entireties does elsewhere. Take the home first, because it is Connecticut’s real strength.

The homestead that carries the house

Start with the exemption that makes Connecticut unexpectedly strong on the residence.

Connecticut’s homestead exemption is $250,000, and it doubles to $500,000 for a married couple who own the home jointly.

Under Conn. Gen. Stat. Section 52-352b, the homestead exemption protects an owner-occupied primary residence, real property, a co-op, or a manufactured home, up to $250,000 in value, net of certain liens. The legislature raised it to that level in 2021, a large jump from the $75,000 it had been, and Connecticut case law applies the exemption to each owner, so a married couple holding the home jointly can protect up to $500,000 of equity between them. For a homeowner facing a personal judgment, that is meaningful protection, enough to cover the full equity in most Connecticut homes, and it works automatically without any titling or entity in place. There is one important limit.

For judgments arising from willful, wanton, or reckless misconduct, Connecticut’s homestead drops from $250,000 to $75,000.

The same 2021 amendment that raised the homestead carved out an exception: for money judgments arising from sexual abuse or assault, or from other willful, wanton, or reckless misconduct, the exemption is limited to $75,000 rather than $250,000. So the full protection is aimed at ordinary commercial and contract creditors, and a defendant who loses a judgment tied to intentional or reckless wrongdoing keeps far less of the home. That distinction matters most to someone whose exposure runs to conduct rather than contract, and it is the kind of line worth understanding before assuming the full $250,000 applies.

The LLC interest, and the single-member weak point

On the investment side, Connecticut follows the modern uniform approach.

Connecticut makes the charging order the exclusive remedy but allows a court to foreclose on the interest, and the buyer takes only economic rights.

Connecticut adopted the modern uniform LLC act in 2017, and its charging-order statute, Conn. Gen. Stat. Section 34-259b, follows that template. A personal creditor of a member gets a charging order, a lien on the member’s transferable interest that entitles the creditor only to distributions the company actually makes, and that is the exclusive remedy against the interest. But the statute also lets a court foreclose on the charged interest, and a buyer at that foreclosure sale takes the transferable interest as a transferee, meaning the economic rights without management or voting control. The general mechanics are on the charging order protection page; the Connecticut point is that foreclosure is available, so the charging order is a floor a determined creditor can sometimes climb past. That matters most in the single-member case.

A single-member Connecticut LLC is the weak point, because foreclosing on the sole interest can effectively hand the company to the creditor.

In a multi-member LLC, a foreclosure buyer holds only a transferee’s economic rights and cannot manage the company, so the remaining members keep control. Against a single-member LLC there are no other members to preserve that separation, so foreclosure on the sole interest can end with the creditor in control of the company. The single-member LLC page covers the general weakness; in Connecticut, where foreclosure is available, a genuine multi-member structure is what preserves the protection for anything worth shielding.

The home without entireties, and the veil

Connecticut lacks the marital shield some states use, which is why the homestead matters so much.

Connecticut does not recognize tenancy by the entireties, so the homestead, not the way the deed is titled, is what protects the marital home.

Many states let a married couple hold their home as tenants by the entireties, putting it beyond a creditor of one spouse. Connecticut is not one of them, so a Connecticut couple relies on the homestead for that protection instead, which is exactly why the $500,000 joint figure is so important here. The entireties page covers the shield Connecticut lacks. To reach an owner behind the entity, a creditor uses Connecticut’s veil test.

Connecticut pierces the veil under either the instrumentality rule or the identity rule, both of which require domination plus resulting injustice.

Under Naples v. Keystone Building and Development Corp., Connecticut applies two tests, either of which can pierce. The instrumentality rule requires control amounting to complete domination, used to commit a wrong, that proximately caused the injury. The identity rule requires such a unity of interest that the entity’s separateness has ceased and adhering to it would sanction injustice. Both are demanding, and the piercing the veil page covers the doctrine; the defense in Connecticut is the same as everywhere, keeping each entity capitalized, formal, and genuinely separate.

The bottom line

Connecticut’s homestead is $250,000 and doubles to $500,000 for a married couple, which is unusually strong home protection for a high-tax state.

The homestead drops to $75,000 for judgments arising from willful, wanton, or reckless misconduct, so conduct-based exposure is treated differently from ordinary debt.

The charging order under Section 34-259b is the exclusive remedy but allows foreclosure, and a buyer takes only a transferee’s economic rights.

A single-member Connecticut LLC is the weak point, so a genuine multi-member structure preserves the protection for anything worth shielding.

Connecticut has no tenancy by the entireties, so the homestead, not the deed’s titling, is what protects the marital home.

What this page does not cover

This page is about how creditors reach you in Connecticut. The duties the operating agreement cannot waive, and how the 2017 adoption of the modern act changed older LLCs, are on the governance page. Connecticut’s high income tax, the controlling-interest transfer tax on selling an entity that holds real estate, the optional pass-through entity tax, and the lack of a series LLC are on the structure and cost page. The $120 formation fee and the $80 annual report are on the filing page.

Last verified August 2026.