A Maine living trust allows you to place your assets in trust yet remain control over them while avoiding probate. A revocable living trust (also known as an inter vivos trust) may be an estate planning tool that will meet your needs.
Living Trusts in Maine
A living trust in Maine is created by the settlor. As settlor, you set up the trust and place assets into it. You must name a trustee, who can be anyone, even yourself, which is how most people proceed. As the trustee, you manage the trust assets during your life for your benefit. A successor trustee is in place to manage the trust and distribute assets after your death. A revocable living trust can be changed or eliminated at any time you wish during your lifetime. An irrevocable living trust becomes unchangeable once signed.
Your living trust Maine keeps your trust assets out of probate, the court procedure in which a will is verified and its provisions followed. Although Maine has enacted the Uniform Probate Code, probate is a process which can take months and incur the costs of an executor and attorney as well as court fees. A small estate probate proceeding is available for estates worth $20,000 or less, in which case a living trust would cost more than the probate proceeding.
If you expect that you will in the future need MaineCare nursing home or residential care benefits, placing your home in a revocable living trust makes it a non-exempt asset for this purpose. This means the home which is normally not considered when determining financial eligibility, is counted as an asset, so a living trust is a detriment in this situation. Additionally when assets that are placed in your living trust are later distributed to your beneficiaries (anyone other than you or your spouse), they are subject to the 60 month MaineCare lookback period and subject to the transfer penalty tax, again making a living trust a possible problem.
Do I Need a Living Trust in Maine?
If you do not anticipate needing MaineCare, a living trust can provide a variety of benefits. When you create a living trust in Maine you are able to maintain control over your assets during life and also after you die. While you are alive, you can use, manage, spend, and give away the trust assets any way you wish. You can move assets into and out of the trust at any time. After your death, the successor trustee will continue to manage the trust assets and distribute them according to the trust terms you have set up. You can decide that assets should be distributed on certain dates (like birthdays), or specific events. This allows you to continue to manage your family’s wealth even after you pass away. This is in contrast to a will which distributes assets once probate concludes. A living trust is harder to contest than a will, providing added security.
A living trust also provides you and your beneficiaries with privacy. Your trust will not be public record or be part of a court proceeding as is required with wills. Trust assets, trust terms, and beneficiaries remain private.
A revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary for you to have your financial life managed for your benefit.
Living Trusts and Estate Taxes in Maine
A living trust does not avoid estate taxes. Maine applies estate tax to estates over $2 million, while the federal government applies it to estates over $5 million. Estate taxes can be avoided with the use of an AB or marital trust (also called a QTIP trust), which passes assets from spouse to surviving spouse.
How to Create a Living Trust in Maine
Creating a living trust is accomplished when you create a trust document, sign it in front of a notary and then fund the trust by transferring ownership of assets to the trust. A living trust is a valuable estate planning tool that allows you to control and manage assets without court involvement.
LegalZoom can help you create a living trust online quickly and easily. When you create a Maine living trust through LegalZoom, you'll receive a pour-over will, transfer deeds, a document organizer, and more.