Maine charges its own estate tax but has no inheritance tax. If the deceased doesn’t have a will probated by the court, inheritances can get a bit more complicated. In this guide we’ll discuss the ins and outs of Maine’s inheritance laws, from its estate tax to its procedures for probating estates. If you are trying to sort out your own estate or inheritance plans, and would like professional help, SmartAsset matching tool will match you with capable financial advisors in your area.
Does Maine have an Inheritance Tax or an Estate Tax?
Residents of the Pine Tree State are not hit with an inheritance tax. But Maine residents and those who own property in the state but live elsewhere need to be mindful of the Maine estate tax.
Heirs won’t have to file a state estate tax return if the value of the estate is worth less than $4 million, because the estate tax threshold for Maine is $5.6 million. That means if you die and your total estate is worth less than $5.6 million, Maine won’t collect any tax.
However, if the estate is worth more than $5.6 million, there is a progressive estate tax rate, which ranges from 8% to 12%, that applies to every dollar above $5.6 million. The exemption is not portable between spouses, so when both individuals in a married couple die the exemption is still $5.6 million.
As for the federal estate tax, it only kicks in when estates are worth $11.18 million or more.
Other Necessary Tax Filings
When you die, there are many federal and estate tax situations that need to become a priority for those who survive you. Besides the state estate tax, you need to look out for the following:
- Final individual federal and state income tax returns – the federal and state tax returns are due by Tax Day of the year following the individual’s death
- Federal estate/trust income tax return – due by April 15 of the year following the individual’s death
- Federal estate tax return – due nine months after the individual’s death, though an automatic six-month extension is available if asked for prior to the conclusion of the nine-month period
- This is required only of individual estates that exceed a gross asset and prior taxable gift value of $11.58 million in 2020
Dying with a Will in Maine
In order for your will to be legitimate in Maine, you must sign your will in front of two witnesses, and your witnesses must sign your will in front of you and each other. You do not have to notarize your will in order to make it legal. However, you can make your will “self-proving,” which helps to speed up the probate process. In order to do that you will need to go to a notary. A “self-proving” will speeds up the probate process because the court can accept the will without contacting the signing witnesses. You can make your will self-proving if you and your witnesses go to a notary and sign an affidavit that states who you are and that each of you knew you were signing the will.
If the will is determined to be valid, the next step is the probate process. Probate proceedings are usually only required if the deceased person owned any assets in their name only. Other assets, also known as “non-probate” property, can generally be transferred to the other owner without probate.
Probate can be stressful and costly, but Maine has a simplified procedure that allows inheritors to skip probate altogether when the value of the entire estate, after liens and encumbrances are subtracted, does not exceed $20,000. All the heir needs to do is prepare a short affidavit, stating that they are entitled to a certain asset. The affidavit is signed under oath. When the person or institution holding the property the heir is entitled to gets the affidavit and a copy of the death certificate, they release the asset. There is a 30-day waiting period for this simplified procedure.
Maine, which adheres to the Uniform Probate Code, also has another simplified probate process for small estates. An executor must file a written request with the local probate court requesting permission to use the simplified procedure. The court may authorize the executor to distribute the assets without having to go through regular probate. An estate may be eligible for the simplified small estate process, called the “summary administrative procedure,” if the value of the entire estate, after liens and encumbrances are subtracted, does not exceed homestead allowance, family allowance, exempt property, costs of administration, reasonable medical expenses of the last illness, and reasonable funeral expenses. The executor will need to prepare a closing statement that says the value was less than that stated above, that they distributed the assets to the inheritors, and that they gave a copy of the closing statement to all of the inheritors.
Dying without a Will in Maine
It isn’t ideal to die without a will if you care about estate planning or deciding where your assets will end up after your death. Maine inheritance laws label these types of estates “intestate,” which means there is no will, or no valid will. The court then must follow intestate succession laws to determine who inherits your estate.
If there isn’t a will, the probate court will appoint a personal representative, who has the legal authority to gather and value assets owned by the estate, pay bills and taxes owed by the estate, and finally, to distribute the assets to the heirs or beneficiaries. The personal representative is usually a surviving spouse or an adult child.
Although there are often extenuating factors, it’s best not to die intestate, so your loved ones don’t have to go through that kind of stress. If you’re not sure what kind of estate plan you want to make, you can seek the help of a financial advisor specializing in legacy planning.
Spouses in Maine Inheritance Law
First of all, it is important to note that in Maine, the rules for spouses also apply to registered domestic partners. If you die intestate, your spouse’s inheritance depends on whether or not you have living parents or descendants. Descendants include children, grandchildren, and great-grandchildren. If you have no living parents or descendants, your spouse inherits all intestate property.
If you die with parents and a spouse, your spouse will inherit the first $50,000 of the intestate property, then half the remaining balance. Your parents will inherit the other half of the remaining balance.
Children in Maine Inheritance Law
If you die with children but no spouse, your children will inherit everything. If you die with a spouse and descendants from you and your spouse, your spouse will inherit the first $50,000 of the intestate property, then half the remaining balance. Your descendants will inherit the other half of the remaining balance. If you die with a spouse and descendants who are not also your spouse’s descendants, your spouse will inherit half of your intestate property, and your descendants will inherit the rest.
|Intestate Succession: Spouses and Children|
|Inheritance Situation||Who Inherits Your Property|
|Children but no spouse||– Children inherit everything|
|Spouse but no descendants or parents||– Spouse inherits everything|
|Spouse and descendants from you and that spouse||– Spouse inherits the first $50,000 of the intestate property, then half the remaining balance |
– Descendants inherit the other half of the remaining balance
|Spouse and at least one descendant from you and someone other than current living spouse||– Spouse inherits half of the intestate property |
– Descendants inherit half of the intestate property
|Spouse and parents but no descendants||– Spouse inherits the first $50,000 of the intestate property, then half the remaining balance |
– Parents inherit the other half of the remaining balance
In order for your children to inherit under Maine intestate laws, they must legally be your children. Legally adopted children have just as much right to their intestate share as biological children do. In addition, if the decedent placed their child up for adoption and that child was adopted by another family – other than your spouse – they are not legally eligible to receive intestate inheritance from the decedent, unless the decree of adoption specifically provides for continuation of inheritance rights. However, foster children and stepchildren who were never legally adopted by the decedent are not eligible to receive a share as the decedent’s child.
Children born outside of marriage still receive their share as long as you did one of the following: participated in a marriage ceremony with their mother that later turned out to be void, adopted the children, acknowledged your paternity in writing before a notary public, or had your paternity legally established in another way under Maine law.
Posthumous children, who are the decedent’s children born after the decedent’s death, are also eligible to receive a share. Grandchildren will receive a share only if their parent is not alive to inherit.
Unmarried Individuals Without Children in Maine Inheritance Law
The estates of legally single intestate decedents without surviving descendants go to the closest living relatives, in the order listed in the chart below.
|Intestate Succession: Extended Family|
|Inheritance Situation||Who Inherits Your Property|
|Parents but no spouse or descendants||– Parents inherit everything|
|Siblings but no parents or descendants||– Siblings inherit everything|
Even if the intestate laws mean everything goes where you would have wanted it to go, it is still best to write your own will, just to ensure there is no confusion after your death.
Non-Probate Maine Inheritances
The probate process can be difficult and expensive. However, some assets that do not have to go through probate. These assets are also not affected by intestate succession laws, and instead go directly to the named beneficiary. Listed below are some of the non-probate assets available in Maine.
- Any property in a living trust
- Life insurance policies
- 401(k)s, IRAs, other retirement accounts
- Securities in transfer-on-death accounts
- Pay-on-death bank accounts
- Joint tenancy real property
Other Situations in Maine Inheritance Law
Maine has survivorship rules. In order to inherit under Maine’s intestate succession law, the heir in question must survive the decedent by at least 120 hours. In addition, relatives conceived before you die but born after the decedent’s death are eligible to inherit as if they had been born while the decedent was alive.
Immigration status is irrelevant when it comes to inheritance. If a relative of yours is entitled to a share of your assets, they can inherit no matter what their citizenship status is. Half-relatives inherit as much as “whole” relatives. For example, your half-sibling would get the same share as any other sibling.
If you give an heir property during your lifetime, the value of that gift can be subtracted from your relative’s share, but only if it is in writing at the time the gift was made, or if the heir admits it in writing.
Resources for Estate Planning
Managing your own estate, or handling the intricacies of inheriting money from the estate of a loved one who has passed away, combines many complex factors to deal with. It can be an overwhelming venture that can include taxes to file, possible court proceedings to go through and more. You might want some help with the process.
SmartAsset’s financial advisor matching tool can match you with up to three nearby financial advisors who have experience handling your inheritance and estate planning needs when it comes to Maine’s inheritance laws. Matches are found based on your answers to questions about your financial situation and goals.
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