Probating a Small Estate (Under $50k)

How to Administer a Small Estate

Flathead County wants you to use these instructions and forms to be the personal representative for a small estate.

It is important to remember that the staff at the probate court cannot give you legal advice. If you have questions about administering an estate, you should contact an attorney. These instruction and forms may not be right for your situation, and they cannot take the place of legal advice from an attorney. 

  Click on THIS LINK to get the county forms.  Print the forms single-sided, with writing on one side of the page. Do not make revisions to these forms as you might delete necessary language.

Who Should Use These Forms?

You can use these forms if: 

• The decedent was a resident of Montana
• You file these forms within three years of the decedent’s date of death
• You are qualified to serve as personal representative of the decedent which means you are:
•     18 years old or older;  Have priority to serve as personal representative (see page 3) & If the total value of the decedent’s estate is roughly $50,000 or less after all expenses have been paid

Alternative: If the value of the decedent’s estate is roughly

$50,000 or less, personal property of the decedent may be transferred by an Affidavit. An heir of the decedent can collect an asset that they are entitled to if:

• 30 days have passed from the date of death
• No estate has been opened.
• The property to be transferred is not real estate

Definitions:

Decedent:The individual who has died. The individual must have died at least five days before the estate is opened. For practical purposes, it is best to wait to open the estate until you have received a death certificate unless there is an emergency. 

Estate:The name for the property of the decedent after they have passed away. It is important to remember that not all of the decedent’s property may be in the probate estate. Property that passes automatically under a contract such as life insurance policy or bank account is not included in the probate estate. If you have questions about what property is included in the probate estate, consult an attorney. 

Exempt Property: If a decedent has a surviving spouse or children, they are entitled to $15,000 worth of household furniture, automobiles, furnishings, appliances and personal effects. If the decedent does not have a surviving spouse or children, there is no exempt property.

Fair Market Value: The value of property when any liens or encumbrances are subtracted from the value. 

Fiduciary Duty: All Personal Representatives owe a fiduciary duty to the heirs of the estate. This means that the Personal Representative must act honestly and efficiently while putting the interests of the heirs of the estate above their own. Failure to do so could result in removal as Personal Representative. 

Heir:An heir of the estate is an individual who is entitled to receive property from the estate. 

Homestead Allowance:If the decedent had a surviving spouse, the surviving spouse is entitled to an allowance of $22,500 from the estate before any other distributions are made. If the decedent did not have a surviving spouse, but had surviving minor or dependent children, they are entitled to an allowance of $22,500 from the estate before any other distributions are made. If the decedent did not have a surviving spouse or surviving minor children, there is no homestead allowance. 

Intestacy: Intestacy occurs when a decedent dies without a will. If a decedent dies without a will, Montana law determines how that individual’s property is distributed. In most situations, a decedent’s property is distributed to their surviving spouse and then to their surviving children. If you have questions regarding intestacy, consult with an attorney. 

Personal Representative:The individual who has control over the decedent’s property after they die. The Personal Representative’s duties include paying final debts and expenses, locating property, and distributing property to appropriate individuals. Personal Representatives may be required to file a bond with the court if it is requested by the decedent’s estate plan or by an interested party. 

Probate:Probate is the process in which a decedent’s property is legally transferred to another individual after the decedent dies. Probate ensures that a decedent’s property is transferred under the terms of their will, or if the decedent died without a will, transferred under the terms of the statute. 

Survivor: A person has legally survived the decedent if they have lived as least 120 hours after the death of the decedent. This is important when two individuals died within a short time period. 

What Is a Small Estate?

Under Montana law a small estate is one in which the fair market value of the property does not exceed the sum of the:

o Homestead Allowance: $22,500

o Exempt Property Allowance: $15,000

o Costs and Expenses of Administering the Estate (Examples include court fees, fees incurred transferring property, Personal Representative fees, attorney fees, accountant fees)

o Reasonable Funeral Expenses

Reasonable Medical Expenses of the Decedent’s last illness

How to Be a Personal Representative

To be Personal Representative you must have priority to serve as Personal Representative. The order of priority is determined by Montana law. 

This is the order of priorities: 

1. Anyone named personal representative in the will of the person who died;
2. The living husband or wife of the person who died, if the person who died had a will and the living husband or wife gets property in the will;
3. The custodial parent of a person who died under the age of 18;
4. Anyone who gets property in the will, if the person who died had a will;
5. The living husband or wife of the person who died, if there is no will;
6. The parent of an adult decedent who is survived by children, none of whom are adults;
7. The closest relatives or heirs of the person who died;
8. The public administrator;
9. Anyone owed money by the person who died, if it has been at least 45 days since the person died.

Note: Someone else may have equal or higher priority than you do. If a person with equal or higher priority will not sign the waiver form in this packet, you will need to go through a formal proceeding to be named personal representative. This packet does not cover formal proceedings. If you need a formal proceeding, it is a good idea to talk to a lawyer.

Being Paid for Being the Personal Representative

Under Montana law, the Personal Representative can be paid for their service as a Personal Representative. The compensation must be reasonable as it can be challenged by both the Court and any interested parties. What is reasonable may depend on the assets or the size of the estate. It is important to note that the Exempt Property Allowance and Homestead Allowance must be paid before the Personal Representative’s fees 

Hiring Help for Administering an Estate

Under Montana law, the Personal Representative can hire professionals to assist you with administering the estate. This can include an attorney, an accountant, an appraiser, or a tax professional. The compensation for these professionals must be reasonable. Their compensation can be challenged by the Court or the interested parties. 

Step 1

Once you have determined that you are qualified to serve as Personal Representative, you must open the estate with the probate court in the county the decedent lived in. You must file the Application for Informal Appointment of Personal Representative and Informal Probate of Will If Needed with the death certificate. If the decedent had a will, attach the original to the application. Sign the application and have it notarized. By having the document notarized you are swearing what have written is true, so fill the document out correctly. File the original with the court and send copies to the interested parties. 

If there are other individuals who have an equal right to serve as personal representative, they must complete a Waiver of Priority and Nomination of Personal Representative. File the original with the court and send copies to the interested parties.

Complete the captions on the Statement of Informal Probate and the Letters of Authority and give to the court along with your application.

Step 2

If the Judge or the Clerk of Court approves your application, he or she will sign the Statement of Informal Probateand the Letters of Authority. The Letters of Authority allow you to administer the estate. You can give copies to show you have authority to handle the estate. Send copies to the interested parties. 

If the judge does not sign the application, you will need to commence formal proceedings.

Once you receive the Letters of Authorityyou must sign the Acceptance of Appointment and the Notice to Heirs and Devisees. File the original with the court and send copies to the interested parties. You must send the Notice to Heirs and Devisees within 30 days from when your Letters of Authority were signed. 

Step 3

Locate all estate property. You must complete the Inventory, in you will list the estate’s assets, how much each asset is worth, any debts owed on each asset, and the value of the person’s interest in the asset. Examples of assets are land, buildings, money, bank accounts, and furniture. File the original with the court and send copies to the interested parties.

Note: There may be assets in the estate that were owned jointly or that have beneficiaries. If someone jointly owned property with the person who died, that property will go directly to the joint owner. Or sometimes a person will designate a beneficiary for an asset, such as a bank account “POD” or “payable on death” The beneficiary should get the account directly. These types of assets don’t need to be given out as part of the allowances. Before you list an asset, be sure you know if it was owned jointly or if there was a beneficiary. You can write that information on the Inventory and the Personal Representative’s Verified Closing Statement.

Step 4

You must maintain and distribute any property to the appropriate persons. Be sure to pay any property taxes on real property. Also be sure to file the decedent’s final income tax returns. Speak to an accountant or an attorney if you have any questions regarding taxes.

If it would benefit the estate, the personal representative has the authority to sell property. It may make sense to sell property with liens or encumbrances so the estate does not have to pay the debt. 

Use the Deed of Distribution to transfer any real estate. The original Deed of Distribution must be filed with the Clerk and Recorder in the county the property is located in. 

Distributions

1. If there is no surviving spouse or minor or dependent child, skip this step. If the decedent had asurviving spouse, transfer the homestead allowance of up to $22,500 to him or her. If there is no surviving spouse, divide the $22,500 homestead allowance equally among any minor or dependent children supported by the person who died. You can use any money or property to make up the homestead allowance.

2. If there is no surviving spouse or minor or dependent child, skip this step. The family allowance of up to $27,000 is to support the surviving spouse and any minor or dependent child(ren) of the decedent for a year after the date of death. You can choose to pay the funds either in a lump sum or to pay up to $2,250 a month for a year. 

3. If there is no surviving spouse or minor or dependent child, skip this step. If the decedent had a surviving spouse, transfer exempt property worth up to $15,000 in value to him or her. If there is no surviving spouse, divide the exempt property allowance equally among the children of the person who died. In deciding how much exempt property is worth, subtract any liens and encumbrances. Exempt property includes household furniture, other furnishings, automobiles, appliances, and personal items. If there is less than $15,000 of those kinds of property, you can give out other types of property in the estate to make up the rest of the $15,000 in value.

4. Pay the administration costs of handling the estate. This includes the personal representative’s fees. 

5. Pay the final funeral expenses of the decedent. 

6. Pay the final medical expenses of the decedent. If there are funds remaining after these expenses have been paid, the estate cannot be closed as a small estate. 

Step 5

You must close the estate within two years. If you do not, you must explain to the Court why the estate should be kept open. Prepare the Accounting of Administration. Explain what expenses you paid and how you distributed the property listed in the Inventory. File the original with the court and send copies to the interested parties.

Prepare the Sworn Statement to Close. Explain that you have distributed the Homestead Allowance, Exempt Property Allowance, and paid the expenses of the estate. You will explain that after paying these, there are no more assets left in the estate. You must sign this before a notary. By having the document notarized you are swearing what have written is true, so fill the document out correctly. File the original with the court and send copies to the interested parties including any creditors. 

You will receive notification from the court when the estate is closed. Send copies to the interested parties. 

Click on THIS LINK to get the county forms.

Where Can I Get More Information?

The laws of Montana are called the Montana Code Annotated or “MCA.” The laws about closing a small estate can be found in Title 72, Chapters 1, 2, & 3. An easier way to write one of those laws is ' 72-1-101, MCA.  The MCA can be found at your local library or on the Montana State Law Library website at: www.lawlibrary.mt.gov. Click on the “Laws” option near the top of the page on that website, and then click on “MCA.” 

Where Can I Get Legal Help?

These organizations may be able to help you:

• Montana      Legal Services Association (MLSA) gives free legal help to low and      moderate-income people. To find out      if you qualify for MLSA, call the MLSA HelpLine at 1-800-666-6899.
• Western Montana Probate Support Group. https://www.facebook.com/groups/1359900611299229
• The      State Bar Lawyer Referral and Information Service (LRIS) refers      people to Montana     lawyers who might be able to help. Call LRIS at 1-406-449-6577.
• The      State Law Library can help you find and use legal resources such      as books, forms, and websites. You can visit the Law Library website at www.lawlibrary.mt.gov. Or you can      contact a Reference Librarian at (800) 710-9827 or by email at mtlawlibrary@mt.gov.