Learn how to reduce your income and estate tax, fast.
Get our tips on big-picture strategy and actionable tactics for startup equity, small businesses, crypto, real estate, and more.
JOIN 1,000+ FOUNDERS, EMPLOYEES, AND INVESTORS WHO TRUST VALUR



Get our tips on big-picture strategy and actionable tactics for startup equity, small businesses, crypto, real estate, and more.
JOIN 1,000+ FOUNDERS, EMPLOYEES, AND INVESTORS WHO TRUST VALUR
If you have a significant amount of assets that you want to pass on to heirs and are a Maine resident, you may wonder how much your heirs will lose to the estate tax. Unfortunately, estate tax laws can be complex and vary from state to state. Therefore, understanding how these apply to your location and impact your estate is crucial.
So, let’s dive in!
Before diving into the state-specific Maine estate tax and how it works, let’s get into the estate tax basics.
The estate tax is a tax on the transfer of assets between generations, i.e., from parents to their heirs. It is generally imposed on the estate’s total value and any gifts made before the person passes away above a pre-determined exempt amount that varies by state. Starting in 2023, individuals can transfer up to $12.92 million, during life or at death, without triggering the federal estate-tax bill, up from the 2022 exemption amount of $12.06 million.
However, each state has its own state-specific estate tax rules. Some states may not impose an estate tax, while others, such as Maine, have a high tax rate. Moreover, the tax rate varies depending on the value of the gifted assets; typically, the more assets you pass on, the higher the tax rate you will lose to the estate tax.
These taxes are intended to reduce the wealth concentrated in a single estate by increasing the taxes on inherited wealth. Still, they can be minimized or completely avoided through estate planning. But how?
Estate-tax planning comes into play when you want to pass assets to the next generation. With estate-tax planning, you can arrange your affairs to reduce the amount of federal and state estate taxes you and your heirs or recipients will face and maximize how much you pass on to the next generation.
Importantly, estate tax planning can significantly impact how much you pass on to heirs because of how high federal and state estate taxes are.
The Federal Estate Tax is a tax on assets transferred from a person who passed away to their heirs. It is paid by the dead person’s estate and is due nine months after death. Federal estate taxes range from 18% to 40%. This means that if you are giving away $1 million, over and above the federal estate tax exemption, you would owe $400,000 in federal estate taxes and only leave $600,000 behind for your beneficiaries. And that’s even before accounting for any state estate tax liability!
Taxable Estate Above $12.92 Million | Base Taxes Paid | Marginal Rate |
---|---|---|
$12,920,000 – $12,930,000 | $0 | 18% |
$12,930,000 – $12,940,000 | $1,800 | 20% |
$12,940,000 – $12,960,000 | $3,800 | 22% |
$12,960,000 – $12,980,000 | $8,200 | 24% |
$12,980,000 – $13,000,000 | $13,000 | 26% |
$13,000,000 – $13,020,000 | $18,200 | 28% |
$13,020,000 – $13,070,000 | $23,800 | 30% |
$13,070,000 – $13,170,000 | $38,800 | 32% |
$13,170,000 – $13,420,000 | $70,800 | 34% |
$13,420,000 – $13,670,000 | $155,800 | 37% |
$13,670,000 – $13,920,000 | $248,300 | 39% |
Over $13,920,000 | $345,800 | 40% |
Each individual has a lifetime estate tax exemption — a gift tax exemption or the basic exclusion amount. This exemption is the value of assets you can give away, throughout your life and after your death, without being subject to the federal estate taxes described previously.
For 2023, this exemption is $12.92 million/per person. Because the exemption is per person, married couples can give away double that amount. In addition, as of 2023, you have an annual gift exclusion which allows you to give up to $17,000 per person/year that doesn’t count towards the gift tax exemption.
However, it’s essential to know the federal estate tax exemption level is scheduled to reduce by about 50% to $6.6 million when the Tax Cuts and Jobs Act sunsets in 2026, which is why it’s essential to get started with estate planning sooner rather than later.
So, how do all of these apply in the state of Maine?
The Maine estate tax exemption, like the federal exemption, is a tax exemption that reduces the amount of estate taxes that must be paid. At the state level, the exemption is $6,410,000; in other words, you will pay no Maine estate tax on estate transfers up to that value.
Like most U.S. tax rates, the estate tax rate in Maine is progressive, based on the estate’s value. Estates valued at over $6.41 million are subject to marginal estate tax rates between 8% and 12%.
This table gives an overview of the Maine estate tax rates based on the size of the taxable estate and shows the minimum taxes paid and the marginal tax rate for each bracket, up to a maximum of 16%.
$6,410,000-$9,410,000 | $0 | 8% | $6,410,000 |
$9,410,000-$12,410,000 | $240,000 | 10% | $9,410,000 |
Over $12,410,000 | $540,000 | 12% | $12,410,000 |
Let’s say your total taxable estate is $8 million. That exceeds the minimum to avoid Maine estate taxes. Therefore, all your estate is taxable in Maine, this case’s tax will be $127,200. Since $8m is in the $6.41m-$9.41m taxable estate category (column 1) that means there no minimum estate tax (column 2) plus 8% of every dollar (column 3) above $6.41mm (column 4).
However, you can avoid Federal Estate taxes due to the amount of taxable estate (since the minimum to pay Federal estate taxes is $12.92 million). That means a Maine resident trying to pass on their $8 million estate would end up passing $7,872,800 to their children.
Different tax planning strategies can help you reduce your taxes in Maine. Here are the five we consider key to consider:
The Federal and Maine estate tax can significantly reduce the assets your family receives when you pass away. Fortunately, there are several strategies available to minimize the applicable tax. You can read more here, use our Guided Planner tool to find helpful solutions, or schedule a time to talk with our expert team.
At Valur, we have built a platform to give everyone access to the tax and wealth-building tools of the ultra-rich like Mark Zuckerberg and Phil Knight. We make it simple and seamless for our customers to take advantage of these hard-to-access tax-advantaged structures so you can build your wealth more efficiently at less than half the cost of competitors. From picking the best strategy to taking care of all the setup and ongoing overhead, we make it easy and have helped create more than $500m in wealth for our customers.