by Jeffrey W. Jones, Esq.

Buried deep within the budget that was enacted by the Maine Legislature at the end of June was a provision that tied the exclusion (exemption) from the Maine estate tax to the exclusion from the federal estate tax. Effective for decedents dying on or after January 1, 2016, the Maine estate tax exclusion will be equal to the federal estate tax exclusion on the date of death. As a result, the current $2 million per taxpayer Maine exclusion will increase to more than $5.43 million.

The current federal estate tax exclusion is $5.43 million, and it is indexed for inflation, adjusted on January 1 each year. The Maine exclusion will also be indexed for inflation, since it is tied to the federal rate.

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 will not be portable.

As a result of this change in the law, the vast majority of Maine residents will be able to concentrate their estate planning on things that are personally important to them, rather than reducing taxes.

Rev 07/15

The information presented on this website is general in nature and not intended to be legal advice. No attorney-client relationship will exist with Jones, Kuriloff & Sargent, LLC unless we agree in writing after a personal consultation. Please contact us for a consultation on your particular situation.

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