Husband owns real estate in Maine valued at $1 million and real estate in Florida (or any other state that does not have a state estate tax) valued at $500,000. Husband also owns assets valued at $2 million. Husband dies in 2004, leaving a surviving spouse and a federal estate plan (i.e., marital distribution and Credit Shelter Trust funded with federal applicable exclusion amount - $1,500,000).

Effect on Non-Resident taxpayers who own Real Estate in Maine:

The value of Husband's property taxable by Maine is $1,000,000. (Form 706ME line 1)

Husband's Gross Estate is valued at $3,500,000. (Form 706ME line 2)

Percentage of Property Taxable by Maine equals 28.57%. (Form 706ME line 3)

Husband's Taxable Estate equals $1,500,000. (Form 706ME line 4)

Adjusted Credit for State Death Taxes equals $64,400. (Form 706ME line 5)

Death Taxes paid to another state (Form 706ME line 6): Not Applicable.

Net State Death Taxes equal $64,400 (Form 706ME line 7)

Maine Estate Tax equals $64,400 multiplied by 28.57% or $18,399. (Form 706ME line 8)

Effect on Resident Taxpayer:

The value of Husband's property taxable by the State of Maine is $3,000,000. (Form 706ME line 1)

Husband's Gross Estate is valued at $3,500,000. (Form 706ME line 2)

Percentage of Property Taxable by Maine equals 85.71%. (Form 706ME line 3)

Husband's Taxable Estate equals $1,500,000. (Form 706ME line 4)

Adjusted Credit for State Death Taxes equals $64,400. (Form 706ME line 5)

Death Taxes paid to another state; $0.00. (Form 706ME line 6)

Net State Death Taxes equal $64,400 (Form 706ME line 7)

Maine Estate Tax equals $64,400. (Form 706ME line 8)

Disclaimer: Nothing in this Client Alert should be taken as legal advice for any individual case or situation. The information in these articles is intended to be general in nature and should not be relied upon for any specific set of circumstances. You should consult with an experienced attorney before applying the information in this Client Alert to your own situation.