A new and revamped Maine Uniform Probate Code (“MUPC”) takes effect on September 1, 2019. The new code replaces the current code, which was initially adopted in 1969 and has remained largely unchanged since then. The changes are extensive. The MUPC overhauls the existing law governing guardianships and conservatorships, spousal elective share, and many other facets of estate and probate law. There are three major themes of the MPUC, as follows:
1. Deference to testator’s intent. The MUPC will allow practitioners to go beyond the four corners of the Will and look to other evidence in ascertaining the decedent’s intent with respect to the disposition of his or her estate. This change was made to ensure a decedent’s last wishes are honored however it may cause more litigation over decedent’s estates.
2. Broad coverage. The MUPC covers not only wills but also deeds, trusts, insurance and annuity policies, accounts with POD designations, securities registered in beneficiary form, transfer on death deeds, pension and retirement plans, powers of attorney, and other “dispositive instruments” of similar type. This change recognizes that “will substitutes” (i.e. nonprobate assets) are now the primary means of transferring wealth to the next generation.
3. Recognition that blended families are now pervasive. Stepchildren are now included in Maine’s anti lapse statute. In other words, if a testator (i.e. person who makes a will) includes a gift in his will and the beneficiary happens to predecease the testator, the MUPC will dictate under certain circumstances that the gift will pass to the beneficiary’s descendants. This could result in stepchildren or other individuals not related by blood receiving a predeceased relative’s inheritance. In order to be sure, a review of your existing will may be warranted. This change again reflects the changing times and fact that blended families are now quite common in American society.
We have identified 7 specific areas of the MUPC which may be of interest to you and represent a significant change from current law. These areas are generally addressed below. A more detailed and through look at the MPUC can be found in the text of the law itself: https://legislature.maine.gov/statutes/18-C/title18-Cch0sec0.html
1. Intestacy Law. When someone dies without a will, his or her estate passes pursuant to intestacy law – which in Maine means to the decedent’s “heirs at law”. Under the new MUPC, the intestate share allocated to the surviving spouse is much greater, and is now indexed for inflation. Stepchildren are not included under the intestacy rules.
2. Elective share. Maine’s elective share law, which is notoriously difficult to parse even for experienced estate lawyers, has been completely overhauled and replaced with a new and simpler statute. The “elective share” is the portion of a decedent’s estate to which the surviving spouse is entitled and may claim in place of whatever the spouse received under the will or by will substitute. The elective share law is designed to prevent someone from disinheriting their spouse. Under the new MUPC, the amount of the elective share is now tied to the length of the marriage; the longer the marriage, the greater the elective share.
3. Increased probate exemptions and allowances for surviving spouse and dependents. Maine law currently provides that certain property and fixed dollar amounts pass to the surviving spouse and/or decedent’s dependents, free and clear of the decedent’s creditor claims. These exemptions and allowances have increased significantly and are now indexed for inflation.
a. Homestead allowance of $10,000 has increased to $22,500 under the MUPC
b. Family allowance of $12,000 has increased to $27,000 under the MUPC
c. Exempt property of $7,000 in value has increased to $15,000 under the MUPC
4. “Small Estate” now larger. Under current law, an estate whose value, less liens and encumbrances, is $20,000 or less can be claimed by the successor entitled to it with a simple affidavit, i.e. without the necessity for probate proceedings. The MUPC increases the limit to $40,000, indexed for inflation.
5. Uniform Real Property Transfer on Death Act. Maine joins 14 other states in adopting this statute, which provides for a new type of deed called a “transfer on death deed” (“TODD”). TODDs provide for non-probate transfers of real estate by designating one or more beneficiaries of the real property interest to take upon the death of the owner. The owner retains complete ownership, title, and control of the property interest during his lifetime. A TODD can be revoked by the owner during his lifetime by recording an instrument of revocation in the registry of deeds.
6. An Act to Help Prevent Financial Elder Abuse. The impetus for this new act comes from a pervasive misunderstanding among the public about the legal impact of naming an individual as a joint owner on a bank account. Many times, individuals (often elderly) add a child or other trusted family member to an account for convenience purposes only, and without an intent or understanding that the joint account passes to that person upon their death. This issue has caused significant probate litigation over the years. The act seeks to address that misunderstanding. Specifically, it requires financial institutions to ask the following question at the time the joint/multiple party account is created: “Do you intend for the sum remaining upon your death to belong to the surviving party or parties? Yes or No.”
7. Overhaul of Guardianship and Conservatorship laws. We are the first state in the country to adopt (in large part) the Uniform Guardianship, Conservatorship and Other Protective Arrangements Act. The Act makes it much more difficult for petitioners to get appointed guardian or conservator. The Act places an emphasis on “supported decision making”; if there is a less restrictive alternative of meeting an individual’s needs that restricts fewer rights of the individual, then guardianship and/or conservatorship is not warranted under the new Act. Overall the Act is much more protective of the rights of the person subject to guardianship/conservatorship. There are, however, more onerous notice requirements, more duties are imposed on guardians and conservators, and proceedings will require more court involvement, time and expense. Court approval will now be required in order to sell an individual’s residence. Additional annual/interim reports will now be required. Consequently, having a valid power of attorney and medical directive will become even more important, particularly for seniors and the elderly.