Pending before the Taxation Committee of the Maine Legislature are two bills that would decrease the exclusion (exemption) from the Maine estate tax from the current $5.87 million (per taxpayer) to either $1 million or $2 million. Both bills were tabled last session, and will expire if not enacted when the current session ends, sometime this spring. Both were sponsored by Democrats, who have a majority in both houses, and also hold the Governorship.
The current federal estate tax exclusion is $11.58 million, per taxpayer and it is indexed for inflation, adjusted on January 1 each year. The Maine exclusion is no longer tied to the federal exclusion.
The Maine estate tax on the first $3 million over the exclusion amount for the year of death will be 8%; the next $3 million will be taxed at 10% and the amount by which the estate exceeds the exclusion by $6 million will be taxed at 12%. (The federal estate tax rate is a flat 40% for all amounts in excess of the exclusion.)
The federal estate tax exclusion is “portable” (that is, the second spouse to die can use any or all of the unused exclusion of the first to die, under certain circumstances). The Maine exclusion is not portable.
Pay attention to the news from Augusta. If the Maine exclusion is reduced, and the total value of your assets exceeds or is close to the new exclusion amount, you should review your estate plan immediately.
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