As of September 1, 2019, a major overhaul of the Maine probate code enacted by the legislature in 2018 has now gone into effect (Maine Revised Statutes Title 18 – C). Among the many other changes, the new code increases the statutory shares of estates for heirs that are safe from creditors, increases the elective share of an estate to which a surviving spouse is entitled, allows for transfer on death deeds, and completely overhauls the guardianship and conservatorship process.
Under the statute, heirs of an estate are entitled to certain shares of an estate, even before any creditors are paid. For example, the surviving spouse is entitled to a “homestead allowance” of $22,500 (this allowance was only $10,000 under the old code). The surviving spouse is also entitled to up to $15,000 worth of “exempt property” (that is, tangible personal property; the cap on exempt property was $7,000 under the old code).
The new code makes a significant change to the “elective share” of an estate; that is, that portion of an estate to which a surviving spouse is entitled regardless of what portion of the estate was left to the spouse in someone's will. Calculation of the elective share of an estate was complicated under the old code, and it remains complicated – and, one could argue, has become even more complicated -- under the new code. The elective share is defined in the new code as “50% of the value of the marital-property portion of the augmented estate.” Therefore, to calculate the elective share, one would have to calculate the portion of the “augmented estate” is marital property. The augmented estate is the probate estate, nonprobate transfers (such as property held as joint tenants and life insurance proceeds), and the surviving spouse's property and nonprobate transfers. The marital-property portion of the augmented estate depends on the number of years of marriage – the longer the marriage, the greater the portion (ranging from 3% for less than one year to 100% for 15 or more years). (This calculation is difficult; if you think you may want petition for the elective share, you should hire an attorney to help you calculate it.)
The new Probate Code allows for “transfer on death deeds.” Already in use for many years in other states, this type of deed allows a landowner to direct that title to their real estate transfers to someone else upon the landowner's death. This type of transfer would be one example of a nonprobate transfer.
The guardianship and conservatorship processes are very different under the new code. The new Probate Code emphasizes supported decision-making for individuals with disabilities. The code increases the number of categories of interested parties who must be informed of guardianship or conservatorship proceedings. For example, the new code requires notification of “at least one adult nearest in kinship to the Respondent who can be found with reasonable diligence ….”
If you are wondering how Maine's new Probate Code may affect you or your estate plan, give us a call!