Maine life estate deed

What a life estate deed does in Maine

A traditional life estate deed splits ownership across time. You, the life tenant, keep the right to live in and use the property for the rest of your life. The remaindermen you name own everything after that, and their interest vests the moment the deed is delivered; recording protects it against later buyers and creditors. Because their interest is real and present, you can't sell, refinance, or undo the deed without their signatures. That permanence is the whole difference between this and a lady bird deed.

The Maine law behind this deed

Maine has no section written specifically for life estate deeds. The instrument runs on the general conveyancing and recording statutes below, which is why the requirements here look like those for any other deed in the state.

When Maine property owners use a life estate deed

• Pass a home to children while reserving the right to live there for life
• Start the Medicaid look-back clock on a transfer (state rules vary)
• Avoid probate on the property with a simple, long-established instrument
• Provide for a surviving spouse or partner with the remainder going to your own children

What Maine requires on the deed

These are the execution and formatting rules registries of deeds enforce. Getting any of them wrong is the usual reason a deed comes back in the mail.

How to complete and record it in Maine

1. 1Find your current deedYou need the legal description from it, word for word. If you can't find your copy, the Registry of Deeds can provide one, usually for a few dollars.
2. 2Identify everyone by full legal nameNames must match the current deed and government ID exactly, middle names included. A mismatch creates a gap in the chain of title that shows up years later at closing.
3. 3Complete the deedDeedly builds it with the wording, notary certificate, and 3-inch first-page margin used for Maine deeds.
4. 4Sign in front of a notaryBring photo ID. Wait to sign until you are in front of the notary: you have to appear before the notary anyway, and signing there leaves no question about who signed.
5. 5Complete Real Estate Transfer Tax Declaration (Form RETTD)Maine requires this alongside the deed, including for exempt transfers. Your filing packet explains which boxes apply to your situation.
6. 6Record it with the Registry of DeedsFile in the county where the property is located and pay the recording fee. Many offices in this state also accept e-recording, but usually only from approved submitters such as title companies. Keep the stamped receipt. It fixes your priority date.
7. 7Tell the people you named where it isAt your death they record a certified death certificate, and in some states an affidavit, to show that your life estate has ended. Ask your insurer whether they should be added to the policy now.

What it costs in Maine

Maine charges a real estate transfer tax of $2.20 per $500 of value up to $1,000,000 and $6.00 per $500 above that (any part of $500 counts as $500), half owed by the grantor and half by the grantee (36 M.R.S. § 4641-A). The registry collects the whole tax when the deed is recorded (36 M.R.S. § 4641-B), so agree between you who hands it over. A gift, or a deed stating only a nominal price (less than 20% of the property's adjusted assessed value, such as "$10"), is taxed on the property's market value unless an exemption applies (36 M.R.S. § 4641(3)).

Exemptions that commonly apply to a transfer like this: deeds between spouses, parent and child (stepchildren included), or grandparent and grandchild, when nothing is paid for the deed (36 M.R.S. § 4641-C(4)), deeds between spouses in a divorce (§ 4641-C(4)), deeds into your own revocable living trust, and back out of it to you (§ 4641-C(15)), deeds that only confirm or correct an earlier recorded deed, with nothing more paid (§ 4641-C(3)), and deeds that only change an entity's name or type, with no change in who owns it beneficially (§ 4641-C(19)). You have to claim the exemption. The recorder won't apply it for you.

Where to record it in Maine

Maine deeds are recorded with the Registry of Deeds in the county where the property sits, not where you live. There are 16 counties in Maine.

Many Maine recording offices accept e-recording through vendors such as Simplifile, CSC, or ePN. E-recording is generally open only to approved submitters such as title companies, attorneys, and lenders, so if you prepared the deed yourself, plan to record in person or by mail. Some offices accept filings from the public through those vendors; your county's website will say.

Recording offices we cover in Maine: Cumberland, York, Penobscot, Kennebec, Androscoggin, Aroostook, Oxford. See all Maine recording offices.

What a life estate deed does NOT do

Being honest about the limits is more useful than a sales pitch. Every one of these catches somebody out.

• It is not revocable. Once recorded, you can't sell or mortgage the property without every remainderman signing.
• A remainderman's divorce, bankruptcy, or judgment creditor can attach their interest in your home while you're still living in it.
• Because you keep the right to live there for life, the full value is still counted in your estate for federal tax purposes (26 U.S.C. § 2036). That generally gives the remaindermen a stepped-up basis at your death, but it also means the deed does not shrink a taxable estate.
• It is usually treated as a divestment for Medicaid purposes. Get advice before using it for that purpose.

Quirks of Maine law that catch people out

• A Maine registry returns a deed unrecorded if its margins are not clean (1 3/4 inches at the top of page one, 3/4 inch at the sides, 1 1/2 inches across the bottom of the last page, with nothing written in them), and will not accept one unless each signer's name, and the notary's, is typed or printed under the signature (33 M.R.S. § 651-A). It also needs the Real Estate Transfer Tax Declaration and the tax, unless the deed is a transfer-on-death or corrective deed (36 M.R.S. §§ 4641-B, 4641-D), and the recording fee (about $40).
• Almost every Maine deed must be accompanied by a Real Estate Transfer Tax Declaration (Form RETTD), even when no tax is due: an exempt transfer enters its exemption code on the form. Title companies and lawyers file it online; you can fill in the form Maine Revenue Services publishes and hand it in with the deed. Transfer-on-death deeds and corrective deeds need none (36 M.R.S. § 4641-D).
• A deed between spouses, parent and child, or grandparent and grandchild is exempt from Maine's transfer tax only if nothing is paid for it (36 M.R.S. § 4641-C(4)). A family sale is taxed like any other, and siblings, aunts, uncles and cousins get no exemption.
• Maine's transfer tax is imposed half on the grantor and half on the grantee: $1.10 each per $500 of value up to $1,000,000, and $3.00 each per $500 above that (36 M.R.S. § 4641-A).
• Maine recognizes transfer-on-death deeds under its Probate Code (18-C M.R.S. § 6-401).