It is not unusual that an estate is opened and a number of creditors come forward with claims against the estate for money that they are owed. However, even if these claims exceed the value of the estate, that doesn’t necessarily mean that everything must be turned over to creditors. Maine’s Probate Code provides certain family members with a minimum amount of inheritance that gets paid before any creditors, and these minimum figures have just increased.

Maine probate law was in for some excitement on September 1, 2019. That was the effective date of the recodification of Maine’s probate code, which had not gone through a wholesale revision since the early 1980s.

One aspect of the new law that has caused some confusion is the issue of statutory allowances. In Maine, statutory allowances are specific funds that cannot be claimed by MaineCare, banks, or other creditors. In the case of a small estate with a lot of bills, these allowances protect certain sums of money, so that specific family members in particular circumstances can be left with some amount of inheritance.

The old Probate Code contained three statutory allowances:

1. The Homestead Allowance: This provided that the first $10,000 of an estate was exempt from all creditors’ claims for the benefit of a surviving spouse or minor children, depending on the circumstances.
2. The Family Allowance: The old Code also set aside money for a Family Allowance, which was typically around $12,000. This Family Allowance could be provided to a surviving spouse or minor children.
3. Exempt Property Allowance: Finally, the old Code contained an Exempt Property Allowance of $7,000 that could be provided to a surviving spouse or children of any age.

With the adoption of the new Probate Code, Title 18-C, these statutory allowances remained in place and their value was increased: the Homestead Allowance was raised to $22,500; the Family Allowance was raised to as much as $27,000, and the Exempt Property Allowance was increased to $15,000.

Which rules apply?
While the figures were clear cut, there was some confusion as to which version of the Probate Code applied to which estates. Clearly, if a loved one died after September 1, 2019, the new allowances governed. But what about those circumstances where the decedent passed away before the new Probate Code took effect, but these allowances were not paid until after the effective date? When an estate straddled this September 1st date, which set of numbers was to be used?

When the new Probate Code was adopted by the Maine Legislature, it looked as if the new Code controlled in those circumstances when someone died before September 1, 2019, but the allowances were not yet paid. The Legislature, however, provided additional guidance on this issue by enacting LD 1535, An Act to Correct Errors and Inconsistencies Related to the Maine Uniform Probate Code and To Make Other Substantive Changes, a law approved by Governor Mills on June 20, 2019. Now, the Probate Code clearly states that these new, higher figures only apply to estates of decedents who die on or after September 1, 2019.

If you need guidance regarding statutory allowances or any matter affected by Maine’s new Probate Code, please do not hesitate to contact us.