CHAPTER 73
H.P. 299 - L.D. 363
An Act to Clarify the Manner in Which Decedents' Estates Are to Be Distributed
Emergency preamble. Whereas, Acts of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, Public Law 1995, chapter 525 adopted the Uniform Prudent Investor Act and made related and conforming changes in the Probate Code to be effective on January 1, 1997; and
Whereas, some provisions of Public Law 1995, chapter 525 as adopted conflict with other provisions of the Probate Code and may create unintended and burdensome income tax consequences for heirs and devisees; and
Whereas, the Legislature desires to correct the inconsistencies created by its adoption of Public Law 1995, chapter 525 by the 117th Legislature and to avoid the unintended tax consequences of that chapter; and
Whereas, an emergency exists because of the effective date of the earlier legislation; and
Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 18-A MRSA §3-703, sub-§(a), ¶(2), as enacted by PL 1995, c. 525, §1 and affected by §4, is amended to read:
(2) A Except as provided in section 3-906, subsection (a), paragraphs (1) and (2), a personal representative may make distribution of an estate's assets in cash or in kind, in accordance with the devisees' best interests, and is not required either to liquidate the estate's assets or to preserve them for distribution.
Sec. 2. 18-A MRSA §3-703, sub-§(a), ¶(3), as enacted by PL 1995, c. 525, §1 and affected by §4, is repealed and the following enacted in its place:
(3) If all devisees whose devises are to be funded from the residue of an estate agree, in a written instrument signed by each of them and presented to the personal representative, on an investment manager to direct the investment of the estate's residuary assets, the personal representative may, but need not, rely on the investment advice of the investment manager so identified or delegate the investment management of the estate's residuary assets to such manager and, in either case, may pay reasonable compensation to the manager from the residue of the estate. A personal representative who relies on the advice of, or delegates management discretion to, an investment manager in accordance with the terms of this section is not liable for the investment performance of the assets invested in the discretion of, or in accordance with the advice of, such investment manager.
Sec. 3. 18-A MRSA §3-906, sub-§(a), as amended by PL 1993, c. 371, §3, is further amended to read:
(a) Unless a contrary intention is indicated by the will, the distributable assets of a decedent's estate shall must be distributed in kind to the extent posssible through application of the following provisions: as follows.
(1) A specific devisee is entitled to distribution of must receive the thing devised to him that devisee, and a spouse or child who has selected particular assets of an estate as provided in section 2-402 shall must receive the items selected.
(2) Any homestead or family allowance or pecuniary devise may be satisfied by value in kind provided, in the personal representative's discretion, if:
(i) The person entitled to the payment has not demanded payment in cash;
(ii) The property distributed in kind is valued at fair market value as of the date of its distribution; and
(iii) No residuary devisee has requested that the asset in question to be distributed remain a part of the residue of the estate or if, a residuary devisee has requested that the asset to be distributed remain a part of the residue of the estate, there are insufficient other assets to which no residuary devisee has made such a request to permit satisfaction of the estate's obligations and funding of all pecuniary devises made under the decendent's will.
(3) For the purpose of valuation under paragraph (2), securities regularly traded on recognized exchanges, if distributed in kind, are valued at the price for the last sale of like securities traded on the business day prior to distribution, or, if there was no sale on that day, at the median between amounts bid and offered at the close of that day. Assets consisting of sums owed the decedent or the estate by solvent debtors as to which there is no known dispute or defense are valued at the sum due with accrued interest or discounted to the date of distribution. For assets which that do not have readily ascertainable values, a valuation as of a date not more than 30 days prior to the date of distribution, if otherwise reasonable, controls. For purposes of facilitating distribution, the personal representative may ascertain the value of the assets as of the time of the proposed distribution in any reasonable way, including the employment of qualified appraisers, even if the assets may have been previously appraised.
(4) The residuary estate must may be distributed in a manner that is equitable by the personal representative in cash or in kind, in accordance with the best interests of the residuary devisees. Residuary assets may be distributed, at the personal representative's discretion, in pro rata or non pro rata shares; except that residuary assets not distributed pro rata must be valued as of the date on which they are distributed.
Sec. 4. Retroactivity. This Act applies retroactively to January 1, 1997.
Emergency clause. In view of the emergency cited in the preamble, this Act takes effect when approved, unless otherwise indicated.
Effective April 10, 1997, unless otherwise indicated.
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