On June 30, 2015 the Maine Legislature voted to override Governor LePage’s veto of the State Budget, which means the proposed Budget became law. Among the changes to Maine law as a result of the veto override was a change to the Maine Estate Tax Law, codified as 36 M.R.S.A. §§ 4101-4118, which is set to take effect on estates of individuals dying on or after January 1, 2016. Currently, Maine law requires that taxes be imposed on estates of decedents with a taxable estate over $2,000,000, the “Maine Exclusion Amount.” Governor LePage attempted to abolish the estate tax entirely in his initial budget proposal, however, a later amendment increased the Maine Exclusion Amount to equal the Federal Estate Tax Exemption (currently $5,430,000). The amendment was subsequently, albeit quietly, passed into law, effectively increasing the Maine Exclusion Amount from $2,000,000 to $5,430,00 beginning on January 1, 2016.
While the exclusion amount has increased, this recent change in estate tax law highlights the ever-evolving world of taxation and the importance of reevaluating one’s estate plan with some regularity. The change in estate tax law may not have an impact on your estate plan at all. If your estate exceeds the current exclusion amount but falls below the 2016 exclusion amount, there are still valid reasons for estate tax planning tools such as credit shelter trusts since Maine does not recognize the federal concept of portability. Additionally, there are still many estate planning tools to consider outside of estate tax related issues.
With that in mind, does your estate plan still make sense for you and your family? If not, please do not hesitate to call Libby O’Brien Kingsley & Champion for an overview of your current family estate plan (207.985.1815).
The full text of the budget can be found here (see pages 609-610 for relevant estate tax change): http://legislature.maine.gov/legis/bills/getDoc.asp?id=49849