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Montana Trust Laws: A Guide to the Montana Uniform Trust Code

Mon, 25 May 2026 19:28:37 GMT

If you’re creating a trust in Montana — or you’ve been named as a trustee — understanding the state’s trust laws is essential. Montana’s trust statutes define how trusts are created, what duties a trustee must follow, when a trust can be modified or terminated, and how trust income is taxed. Getting these details right protects your family and your assets.

This guide focuses specifically on Montana’s trust statutes and regulations under the Montana Code Annotated (MCA). If you’re still deciding which type of trust is right for you, start with our overview of revocable vs irrevocable trusts or visit our Montana trusts attorney page to learn about the trust planning services Tanko Law offers.

The Montana Uniform Trust Code

Montana trust law is governed primarily by Title 72, Chapter 38 of the Montana Code Annotated, known as the Montana Uniform Trust Code (UTC). Montana adopted this framework to align its trust statutes with modern estate planning practices, providing a clear and consistent set of rules for trust creation, administration, modification, and dispute resolution.

The UTC covers everything from how a valid trust is formed to the specific duties trustees owe to beneficiaries. For anyone creating or administering a trust in Montana, the UTC is the foundational legal framework.

Key sections of the Montana UTC include:

Part 4 (MCA § 72-38-401 through 72-38-417): Creation, validity, modification, and termination of trusts.
Part 5 (MCA § 72-38-501 through 72-38-507): Creditor’s claims and spendthrift provisions.
Part 8 (MCA § 72-38-801 through 72-38-817): Duties and powers of trustees.
Part 10 (MCA § 72-38-1001 et seq.): Liability of trustees and remedies for breach of trust.

Trustee Duties Under Montana Law

If you’ve been named as a trustee — or you’re selecting one — Montana law imposes specific duties that must be followed. Violating these duties can expose a trustee to personal liability under MCA § 72-38-1001.

Duty of Loyalty (MCA § 72-38-802)

A trustee must administer the trust solely in the interests of the beneficiaries. This means avoiding conflicts of interest and never using trust assets for the trustee’s personal benefit.

Duty of Prudent Administration (MCA § 72-38-804)

The trustee must manage trust assets as a prudent person would, considering the trust’s purposes, terms, and the interests of the beneficiaries. This standard applies to investment decisions, record-keeping, and day-to-day management of trust property.

Duty of Impartiality (MCA § 72-38-803)

When a trust has multiple beneficiaries, the trustee must act impartially. This means balancing the interests of current beneficiaries (who may want distributions now) against remainder beneficiaries (who benefit later).

Duty to Inform and Report (MCA § 72-38-813)

Montana law requires trustees to keep beneficiaries reasonably informed about the trust’s administration. This includes providing an annual accounting of trust assets, income, and distributions upon request. Failure to provide adequate reporting is one of the more common sources of trust disputes in Montana.

How Montana Trusts Can Be Modified or Terminated

One of the most common questions Montana families ask is whether a trust can be changed after it’s been created. The answer depends on the type of trust and the circumstances.

Revocable trusts can be modified or revoked at any time by the person who created them. This flexibility is one of the main reasons revocable living trusts are the most popular trust structure in Montana.

Irrevocable trusts are more complex. Under the Montana UTC, there are several paths to modification or termination:

Consent of all beneficiaries (MCA § 72-38-411): If all beneficiaries agree, and the modification is not inconsistent with a material purpose of the trust, the trust can be modified or terminated without court approval.
Court-ordered modification (MCA § 72-38-412): A court can modify the administrative or dispositive terms of a trust if circumstances not anticipated by the settlor make the modification necessary to further the trust’s purposes.
Decanting (MCA § 72-39-102 et seq.): Montana’s Uniform Trust Decanting Act allows a trustee with discretionary distribution authority to distribute trust assets into a new trust with different terms. This is an increasingly common tool for updating outdated trust provisions without court involvement.
Termination for uneconomic size (MCA § 72-38-414): If a trust’s value becomes too small to justify administration costs, a trustee or beneficiary may petition for termination.

These provisions give Montana families more flexibility than many people realize, even with irrevocable trusts. However, each path has specific legal requirements, and working with a trusts attorney is essential to avoid missteps.

Spendthrift Protections in Montana

Montana law allows trusts to include spendthrift provisions that protect a beneficiary’s interest from creditors. Under MCA § 72-38-502, if a trust includes a valid spendthrift clause, a beneficiary cannot voluntarily assign their trust interest, and creditors generally cannot reach the trust assets before they are distributed.

This protection is not absolute. Montana law recognizes certain exceptions — for example, child support obligations and claims by the state may still reach spendthrift trust interests. But for most families, a properly drafted spendthrift provision adds a meaningful layer of asset protection.

For families seeking stronger creditor protection, Montana’s Qualified Dispositions in Trust Act (MCA § 72-38-1001 et seq.) allows the creation of self-settled asset protection trusts. These trusts can shield assets from future creditors even when the person who created the trust is also a beneficiary. For more on this strategy, see our asset protection page.

Montana Trust Tax Rules

Trust taxation in Montana depends on the type of trust and the residency of its beneficiaries.

Revocable trusts are taxed as part of the grantor’s personal income during their lifetime. The trust does not file a separate tax return — all income flows through to the grantor’s individual Montana income tax return.

Irrevocable trusts file their own tax returns (Montana Form FID-3). Montana taxes trust income based on beneficiary residency: if the trust has Montana-resident beneficiaries currently receiving distributions, the income attributable to those beneficiaries is subject to Montana income tax. A nonresident trust with no Montana source income and no Montana-resident beneficiaries is generally not subject to Montana income tax.

Montana does not impose a state estate tax. However, estates exceeding the federal estate tax exemption threshold are still subject to federal estate tax. An irrevocable trust can help reduce the size of a taxable estate.

Tax planning is one of the areas where working with an attorney who holds both legal and accounting credentials makes a real difference. Brian Tanko’s CPA and CFE designations allow Tanko Law to evaluate the tax implications of trust structures with a level of depth that most estate planning firms cannot match.

Montana’s Rule Against Perpetuities and Dynasty Trusts

Montana follows the Uniform Statutory Rule Against Perpetuities (USRAP), codified at MCA § 72-2-1002. Under this rule, a trust interest must vest within the longer of:

The lifetime of a person alive at the trust’s creation plus 21 years, or
90 years from the trust’s creation.

This means Montana trusts can potentially last for several generations, though the state has not abolished or extended the rule like some other states (South Dakota and Nevada, for example, allow perpetual trusts). For Montana families focused on multi-generational wealth preservation, the 90-year window still provides significant planning opportunities when combined with proper trust structuring.

Common Legal Mistakes with Montana Trusts

Even well-intentioned trust plans can fail due to avoidable legal errors. These are the most common pitfalls we see among Montana families:

Not funding the trust. A trust that exists only on paper provides no protection. If your home, bank accounts, and investments are not retitled in the name of the trust, those assets will pass through probate regardless of what the trust document says.
Naming the wrong successor trustee. Your successor trustee should be someone you genuinely trust to handle financial matters responsibly and without conflict. For complex situations, consider a professional trustee or trust company.
Failing to update after major life changes. A trust drafted before a divorce, the birth of a grandchild, or the sale of a major asset may no longer reflect your wishes. Montana’s modification provisions (discussed above) make updates possible, but only if you take action.
Overlooking out-of-state property. If you own real estate in another state, that property may require a separate trust or deed transfer to avoid ancillary probate proceedings in that state.
Using a generic online template. Online forms may not comply with Montana’s specific execution requirements or reflect the nuances of your estate. A small drafting error can create significant legal problems down the road.

Frequently Asked Questions About Montana Trust Laws

Can a trustee be held personally liable in Montana?

Yes. Under MCA § 72-38-1001, a trustee who violates a duty owed to a beneficiary has committed a breach of trust. Remedies can include compelling the trustee to pay money, restoring property, removing the trustee, or voiding transactions. If you’re serving as a successor trustee, understanding these duties before you act is critical. Our trust administration team can guide you through the process.

Does Montana require a trust to be filed with the court?

No. Unlike a will , a revocable living trust is a private document in Montana and does not need to be filed with a court during your lifetime. This privacy is one of the reasons many Montana residents prefer a trust-based estate plan.

Can an irrevocable trust be changed in Montana?

Under limited circumstances, yes. Montana’s UTC allows modification with the consent of all beneficiaries, by court order when circumstances have changed, or through decanting under the Uniform Trust Decanting Act (MCA § 72-39-102 et seq.). Each path has specific legal requirements.

How is trust income taxed in Montana?

Revocable trusts are taxed as the grantor’s personal income. Irrevocable trusts file Montana Form FID-3 and are taxed based on beneficiary residency — income attributable to Montana-resident beneficiaries is subject to state income tax. Montana does not impose a separate state estate tax.

How long can a trust last in Montana?

Under Montana’s USRAP (MCA § 72-2-1002), trust interests must vest within the longer of lives in being plus 21 years or 90 years. Montana has not abolished the Rule Against Perpetuities, so truly perpetual trusts are not available under Montana law.

Do I need an attorney to create a trust in Montana?

You are not legally required to work with an attorney, but the risks of a poorly drafted or improperly funded trust are significant and often don’t surface until it’s too late. A Montana trusts attorney ensures your trust complies with state law, is properly funded, and works together with your will , power of attorney and healthcare directives.

Understand Montana Trust Law Before You Plan

Montana’s trust statutes offer real advantages — but only when your trust is properly drafted and administered under the right legal framework. At Tanko Law, we help Montana families navigate the UTC, structure trusts that comply with state law, and avoid the costly mistakes that come from generic planning.

Whether you’re creating a trust for the first time, serving as a successor trustee, or looking to modify an existing trust, our team is here to help.

Call Tanko Law today: (406) 257-3711 | Kalispell: (406) 257-3711 | Columbia Falls: (406) 897-7133

Or schedule your consultation online at tankolaw.com — serving all Montana counties, available online and by phone.

Revocable vs Irrevocable Trusts — Which One Is Right for You?

Fri, 22 May 2026 18:44:19 GMT

If you’re exploring estate planning options for your family, one of the first decisions you’ll face is choosing between a revocable trust and an irrevocable trust. Both are powerful tools for managing your assets and planning for the future, but they work in very different ways.

Understanding the difference between a revocable and irrevocable trust can save you time, money, and stress down the road. In this guide, we’ll break down how each trust type works, compare the key differences side by side, and help you figure out which option makes sense for your situation.

Whether you’re protecting assets, avoiding probate, or planning for long-term care, working with an experienced trusts attorney can make all the difference.

What Is a Revocable Trust?

A revocable trust, sometimes called a revocable living trust, is a legal arrangement where you transfer ownership of your assets into a trust while keeping full control over them during your lifetime. You serve as both the trustee (the person managing the trust) and the beneficiary.

Because the trust is revocable, you can change, amend, or dissolve it at any time. You can add or remove assets, change beneficiaries, or update the terms whenever your circumstances change. This flexibility is one of the main reasons a revocable trust is the most common type of living trust in Montana.

When you pass away, the revocable trust becomes irrevocable and your successor trustee distributes the assets to your beneficiaries according to the terms you set, all without going through probate.

Benefits of a Revocable Trust

Avoids probate — Your family can access assets faster without court involvement.
Privacy — Unlike a will, a trust is not filed with the court and stays private.
Incapacity planning — If you become incapacitated, your successor trustee can manage your assets without a court-appointed guardianship.
Full control — You remain in charge of your assets for as long as you’re able.
Flexibility — Modify or revoke the trust whenever your life changes.

It’s worth noting that a revocable trust does not protect your assets from creditors or lawsuits during your lifetime. Because you retain control, the assets are still considered yours for legal and tax purposes.

What Is an Irrevocable Trust?

An irrevocable trust is a trust that, once created, generally cannot be changed, amended, or revoked without the consent of the beneficiaries. When you transfer assets into an irrevocable trust, you give up ownership and control of those assets.

This might sound like a major disadvantage, but giving up control is exactly what makes an irrevocable trust so powerful. Because you no longer own the assets, they are typically protected from creditors, lawsuits, and certain taxes. Under Montana law, an irrevocable trust can also help with Medicaid planning and long-term care strategies.

Montana’s Uniform Trust Code (Title 72, Chapter 38, MCA) governs how irrevocable trusts are administered in the state, including provisions for modification under specific circumstances. If you’re considering an asset protection trust , Montana offers some of the most favorable statutes in the country for self-settled asset protection trusts.

Not sure which trust fits your situation? Schedule a free 30-minute consultation with Tanko Law today. Call (406) 257-3711 to speak directly with our team.

Benefits of an Irrevocable Trust

Asset protection — Assets in an irrevocable trust are generally shielded from creditors and lawsuits.
Estate tax reduction — Because the assets are no longer part of your estate, they may not be subject to estate taxes.
Medicaid planning — Assets placed in an irrevocable trust may not count toward Medicaid eligibility after the look-back period.
Probate avoidance — Like a revocable trust, assets in an irrevocable trust bypass the probate process.
Charitable giving — Certain irrevocable trusts, like charitable remainder trusts, can support philanthropic goals while providing tax benefits.

Revocable vs Irrevocable Trust: Side-by-Side Comparison

Here’s a quick look at the key differences between a revocable trust and an irrevocable trust:

Which Trust Is Right for You?

The best trust for your situation depends on what you’re trying to accomplish. Here are some common scenarios to consider:

Choose a revocable trust if you want to keep control of your assets during your lifetime, maintain the flexibility to make changes as your family or finances evolve, and your primary goal is avoiding probate and planning for incapacity. A revocable trust is often the starting point for most Montana estate plans.

Choose an irrevocable trust if asset protection is a priority, you want to reduce your taxable estate, you’re planning for potential Medicaid eligibility, or you have charitable giving goals. An irrevocable trust requires more commitment upfront but can provide significant long-term benefits.

Many families use a combination of both trust types as part of a broader estate plan . A trusts attorney can help you decide which structure, or combination of structures, aligns with your goals.

How Trusts Work Alongside a Will in Montana

A trust doesn’t replace the need for a will . Even if you have a revocable or irrevocable trust, you should still have what’s called a “pour-over will.” This ensures that any assets not already in your trust at the time of your death are “poured over” into the trust and distributed according to your wishes.

Montana follows the Uniform Probate Code, which means the probate process is relatively streamlined compared to many other states. However, avoiding probate through a trust still saves your family time, legal fees, and the stress of court proceedings.

Montana-Specific Trust Considerations

Montana offers several advantages that make it an attractive state for establishing trusts:

No state income tax on certain irrevocable trusts. Montana does not tax the income of irrevocable trusts that have no Montana-resident beneficiaries currently receiving distributions.
Favorable asset protection laws. Montana’s Qualified Dispositions in Trust Act (MCA § 72-38-1001 et seq.) allows you to create self-settled asset protection trusts that may shield assets from future creditors.
Uniform Trust Code. Montana’s adoption of the Uniform Trust Code (Title 72, Chapter 38, MCA) provides a clear legal framework for trust administration, modification, and dispute resolution.
Dynasty trust potential. Montana allows trusts to last up to 1,000 years, making it possible to protect wealth across multiple generations.

Frequently Asked Questions

What is the difference between a revocable and irrevocable trust?

A revocable trust can be changed or canceled at any time during your lifetime, giving you full control over the assets. An irrevocable trust generally cannot be modified once established, but it offers significant benefits like asset protection, estate tax reduction, and Medicaid planning.

Does a revocable trust protect assets from creditors?

No. Because you retain control of the assets in a revocable trust, they are still considered part of your estate and are accessible to creditors. If creditor protection is a priority, an irrevocable trust or a Montana asset protection trust may be a better option.

Can I be the trustee of my own revocable trust?

Yes. Most people serve as their own trustee when they create a revocable trust. You name a successor trustee who takes over if you become incapacitated or pass away.

Does Montana have a state estate tax?

No. Montana does not impose a state estate tax. However, your estate may still be subject to the federal estate tax if it exceeds the federal exemption threshold. An irrevocable trust can help reduce the size of your taxable estate.

How much does it cost to set up a trust in Montana?

The cost varies depending on the complexity of your estate and the type of trust you need. A simple revocable living trust typically costs less than a more complex irrevocable trust. Contact a trusts attorney for a consultation to get an accurate estimate based on your situation.

Can an irrevocable trust be changed in Montana?

Under limited circumstances, yes. Montana’s Uniform Trust Code allows modification or termination of an irrevocable trust with the consent of all beneficiaries and the court, or if the trust’s purpose has been fulfilled. A process called “decanting” may also allow a trustee to move assets from one irrevocable trust to another with different terms.

Do I still need a will if I have a trust?

Yes. A pour-over will acts as a safety net to capture any assets that weren’t transferred into your trust during your lifetime. It ensures everything ends up where you intended.

Find Out Which Trust Is Right for Your Family

Choosing between a revocable and irrevocable trust is one of the most important decisions in your estate plan. The right choice depends on your unique financial situation, your family’s needs, and your long-term goals. You don’t have to figure it out alone.

At Tanko Law, we help Montana families create estate plans that protect what matters most. Whether you need a revocable living trust, an irrevocable trust for asset protection, or a comprehensive plan that includes both, our experienced trusts attorney team is here to guide you every step of the way.

Schedule a consultation today. Contact our Kalispell office or call (406) 257-3711 to get started.

Do You Need a Lawyer to Start a Business in Montana?

Mon, 24 Nov 2025 09:09:37 GMT

Starting a business in Montana is an exciting prospect, drawn by the state’s scenic vistas, expanding economy, and a culture that encourages entrepreneurship. From Bozeman’s tech scene to the rural revitalization of small towns, Montana’s business environment is ripe with opportunity.

Naturally, this raises a crucial question for hopeful founders: Do you need a lawyer to start a business in Montana? The short answer is no—Montana law does not require entrepreneurs to hire an attorney.

However, relying solely on a do-it-yourself approach can carry significant risks. Legal counsel often proves invaluable, ensuring your business is built on a solid legal foundation and helping you avoid costly missteps.

The “Do-It-Yourself” Approach: Step-by-Step Guide

Many entrepreneurs choose the DIY route, leveraging online resources and the state’s accessible filing systems. Here’s what the journey typically looks like:

Choosing a Business Structure: Decide whether to operate as a sole proprietorship, LLC, corporation, or another entity. Each has different implications for liability, taxes, and management.
Naming the Business: Select a unique name and verify its availability via the Montana Secretary of State before registering.
Appointing a Registered Agent: Montana law requires every business to designate a resident agent who can accept legal documents.
Filing Formation Documents: For an LLC, file Articles of Organization; for a corporation, file Articles of Incorporation—these can be submitted online.
Obtaining an EIN: Secure an Employer Identification Number from the IRS for tax purposes and to open business bank accounts.
Registering for Permits and Licenses: Depending on your industry and location, you may need state or local permits and licenses.

DIY Resources make this process smoother:

The Montana Secretary of State’s website features an easy-to-use online business portal.
Free and paid templates exist for basic legal documents like operating agreements and bylaws.
Business formation services (LegalZoom, ZenBusiness, etc.) offer step-by-step assistance for a fee, but these won’t provide personalized legal advice.

The Hidden Dangers of Going Solo

While Montana makes starting a business accessible, there are pitfalls if you proceed without professional legal guidance:

Choosing the Wrong Business Structure: A mistaken selection can expose your personal assets to liability or result in unexpected tax bills. The stakes are even higher for partnerships or multi-member LLCs, where misunderstandings multiply.
Legal Documentation Errors: Without a tailor-made operating agreement or bylaws, disputes among owners become more likely. Incomplete or incorrect filings can delay the start of your business or threaten its legal standing. Most importantly, you may unknowingly sign documents with significant and sometimes detrimental legal weight.
Compliance Issues : Missing a single required license or failing to comply with Montana employment laws can lead to expensive fines, legal troubles, or even forced business closure. Overlooking trademark and copyright protections exposes you to intellectual property disputes down the road.

The Value of an Attorney: Far More Than a Form-Filler

An experienced Montana business attorney is more than just someone who files paperwork. They become a strategic partner who can:

Guide You to the Right Structure : Attorneys analyze your business goals and recommend the right entity for liability protection and tax efficiency, explaining the long-term consequences of each option.
Draft and Review Critical Documents: A lawyer crafts operating agreements or bylaws that reflect your business’s specific needs, making sure all paperwork aligns with state law and offers genuine protection.
Proactively Manage Risk: From anticipating disputes to helping with contracts and lease agreements, legal counsel protects you from costly mistakes. As your business grows, ongoing legal advice helps you navigate changes in law, ownership, or structure.

Conclusion

While Montana’s pro-business climate makes DIY company formation tempting, skipping legal counsel is a gamble. Mistakes in the choice of structure, documentation, or compliance can jeopardize both your investment and personal assets.

The cost of a lawyer may seem unnecessary up front, but it often saves much more by avoiding problems later. Ultimately, entrepreneurs should—at minimum—seek an initial consultation with a knowledgeable Montana business attorney.

Understanding your unique risks and requirements before launching ensures your new venture is both successful and secure.

If you’re looking for an expert Montana business attorney, contact Tanko Law !

Real Estate Laws in Montana

Mon, 24 Nov 2025 09:02:14 GMT

Montana’s real estate market is dynamic, with a blend of rural properties, growing urban areas, and a strong emphasis on land use and resource rights. Whether you are buying, selling, or investing, understanding Montana’s real estate laws is crucial to navigating transactions smoothly and protecting your interests.

Property Ownership in Montana

Ownership of property in Montana can take several forms, including sole ownership, joint tenancy with right of survivorship, tenants in common, and community property in some cases. The state also offers homestead protections that safeguard a primary residence from certain creditors.

Water rights are especially important in Montana’s largely agricultural and rural landscape, governed by prior appropriation laws, which can impact land use, irrigation, and development.

Real Estate Transactions

Sellers in Montana are required to disclose material facts about the property, including known lead paint, environmental hazards, and any defects. Real estate agents and brokers must be licensed by the state and uphold fiduciary duties of loyalty, confidentiality, and full disclosure to their clients.

Purchase agreements must clearly outline the terms of sale, contingencies, and obligations of both parties. Earnest money deposits are typically held in escrow to secure a buyer’s intent to purchase while inspections and financing are completed.

Title and Deeds

A thorough title search is crucial to verify ownership and uncover liens or encumbrances. Montana recognizes various deed types, including warranty deeds, which offer full protection to buyers, and quitclaim deeds, which transfer whatever interest the grantor may have without guarantees. Recording of deeds is done at the county level to provide public notice and establish legal ownership.

Zoning and Land Use Regulations

Local governments in Montana enact zoning ordinances regulating the use of land for residential, commercial, agricultural, or industrial purposes. These regulations determine what can be built and where, alongside subdivision laws governing land division and development. Building permits are required for construction and significant property modifications.

Landlord-Tenant Laws

Montana’s landlord-tenant laws regulate lease agreements, security deposits, and eviction procedures. Security deposits are limited and must be returned promptly with an itemized statement of deductions. Evictions require proper notice and legal process, protecting tenant rights. Landlords must maintain rental properties in habitable condition, complying with health and safety standards.

Property Taxes and Assessments

Property taxes in Montana are calculated based on assessed property value. Recent legislative reforms include a tiered tax rate system effective from 2025, with lower rates on the first $400,000 of residential property value and higher rates on amounts above $1.5 million.

Assessments are conducted regularly, and property owners have the right to appeal valuations if they believe their property has been overvalued. This process typically involves submitting evidence to support a lower valuation. Special assessments may apply for local improvements, while exemptions and rebates are offered for qualified homeowners.

Foreclosure Laws

Montana uses both judicial and non-judicial foreclosure processes, depending on the loan documents and the county. Homeowners have rights during foreclosure, including possible redemption periods where they can reclaim their property by paying debts. Deficiency judgments, where lenders pursue remaining debt after foreclosure sale, are permitted under Montana law.

Recent Legislative Updates and Trends

Significant legislative changes in 2025 have revamped property tax laws, introducing tiered rates benefiting primary residences and long-term rentals but increasing taxes on second homes and short-term rentals. Emerging issues include regulation of short-term rental properties, land conservation efforts, and impacts of remote work on real estate demand and zoning.

Understanding Montana’s complex real estate laws, from ownership structures and transactions to taxes and land use, is essential for protecting your investment and rights. Consulting legal professionals and using resources like the Montana Department of Revenue and local real estate agencies can help navigate these matters effectively. Staying informed about legislative changes also ensures you remain compliant and make sound real estate decisions in Montana.

Last Will and Testament vs. Pre-Nuptial Agreement: Which One Prevails?

Mon, 11 Aug 2025 09:28:28 GMT

Simple Answer: It depends on the language of the documents..

Prenuptial/Anti-nuptial Agreements

Generally speaking, a Pre-nuptial Agreement is an agreement that is entered into prior to marriage that delineates each person’s property and how that property is to be handled in the marriage and beyond. In Montana, these agreements are contracts that must be entered into with full disclosure and without coercion.

Prenuptial Agreements and Wills

If the terms of the Prenuptial Agreement conflict with the terms of either spouse's Last Will and Testament, a Montana probate court may choose to uphold the Agreement unless the deceased spouse's beneficiaries can show that the Agreement was created under duress, is unfair, or tended to “encourage” divorce, according to the Legal Information Institute. Montana probate courts tend to rule in favor of a Prenuptial Agreement when it appears that the Agreement was fairly negotiated and entered into with full and fair disclosure of assets and debts.

What If There Is No Will?

A Prenuptial Agreement may be used to distribute the estate if one spouse dies intestate, meaning without a will or estate plan, or if a will was later found to be invalid. Usually, the Montana probate court will apply state law to decide who receives the property left by an intestate person. However, since the Agreement is a contract made while the deceased person was alive that deals with that person's property, the court may use the Agreement to distribute the property. In this situation, the Agreement can over-ride Montana state law even if a will could not.

Specificity Matters.

A Prenuptial Agreement is more likely to take priority over a will in Montana if it contains a few specific clauses. The Agreement should state which law should be applied to interpret it, especially if it was made in a different state than Montana. Otherwise, the law in Montana will be controlled, even if that was not the law the couple had in mind when they made the will. A Prenuptial Agreement may also contain a “sunset clause”- a provision that delineates an expiration date for the Agreement. If that date has passed, the Agreement is no longer binding and the will may govern the distribution of the estate.

For more information, please contact Estate Planning Attorney Brian C. Tanko at Tanko Law Office 406-257-3711, or visit us on our website at www.tankolaw.com and Facebook at www.facebook.com/tankolaw.

Will vs. Living Trust: Which is Right for You?

Fri, 08 Aug 2025 09:39:59 GMT

Will vs. Living Trust: Which is Right for You in Montana?

Whether you are a person of modest means or someone with considerable wealth, you have an estate. Naturally, you want control over the allocation of your assets after you die and to be sure that your family is properly cared for. This is where an estate plan comes into play in Montana.

There are two strategies for allocating your assets after death: a will and a living trust. While the main purpose of both a will and a living trust is to allow you to designate beneficiaries for your property, they serve different purposes. Deciding which is right for you depends on what you’re looking to accomplish and your survivors.

Learn more about making a will or trust and find out which is more appropriate for your estate planning process from the professionals here at Tanko Law Office.

What is a Will and a Living Trust?

A will, a document that’s been signed and witnessed, dictates how your assets will be allocated after death. With a will, you can designate who will receive your assets. A Will can be revoked or amended at any time, and can also include an appointed guardian for minor children.

A living trust, on the other hand, provides asset management both during your lifetime and after your death. Unlike with a will, a trust requires you to designate beneficiaries and transfer property into the trust. You can serve as your own trustee with a successor appointed upon death or incapacity without the need for court intervention. This helps avoid the publicity, expense, and inconvenience of court-supervised distribution of assets.

Beyond that, there are some situations in which a will or a trust could be a better choice.

Leaving Property to Minors

Minor children can’t own any assets of significant value, so if you leave assets to them, it must be managed by an adult until they reach 18. Leaving assets to a minor in a will requires an adult to be named to manage it. You can also set up a testamentary trust or name a custodian under the Uniform Transfer to Minors Act. If you neglect to name an adult for this responsibility, the court will appoint one.

With a living trust, the appointed trustee manages the assets until the child reaches an age determined by you. There’s no need for the additional paperwork or planning involved.

Revising Your Document

Both wills and living trusts allow you to revise your document if your wishes or circumstances change. However, this is only true of revocable living trusts. Irrevocable trusts are finalized and not subject to revision, making them generally more complex to create than revocable trusts.

Probate Considerations

Probate is a judicial process in which a will is proven by the court and acknowledged as a valid public document that establishes the decedent’s last wishes. Probate can be a long and involved process, not to mention expensive, and it’s not always necessary. Because of this, many people choose to avoid probate in planning their estate in Montana.

Assets left in a will go through probate, but assets left in a living trust don’t. With a living trust, all assets can be distributed to beneficiaries right after death, without any additional fees or interference from the court. Even so, avoiding probate isn’t always a top priority. For individuals with few assets or significant debts, a living trust may offer little to no advantage.

Privacy

Living trusts must be signed and stamped by a notary public, whereas a will does not. Wills do require witnesses, however, which includes two people who aren’t included in the will’s beneficiaries. If getting through probate is a concern, a self-proving affidavit that’s notarized is helpful. After death, a will becomes a public document, while a living trust remains private. For this reason, people who value their privacy tend to prefer the discretion of a living trust.

Protection from Contest

Although a contest to a will or living trust is rare, it can occur nonetheless. Oftentimes this happens if the will doesn’t comply with legal requirements or the maker of the will wasn’t of sound mind. Generally, a living trust is harder to contest than a will.

Avoiding Conservatorship

If you become incapacitated or otherwise unable to manage your affairs, a living trust can appoint a spouse, child or other individual the authority to manage the assets. A will doesn’t offer this option, but a power of attorney does leave the option to appoint someone to manage finances.

Children’s Guardianship and Assets

If you have surviving minor children, a will allows you to name guardians and appoint individuals to manage the assets left to them. These options are not available with a living trust.

Naming an Executor

An executor is a person who is tasked with carrying out your last wishes and distribution of assets after your death. They must communicate with court, resolve debts and distribute any assets in probate. A will uses an executor, but a living trust does not. A living trust has a successor trustee who manages the assets in the trust. Most estates require an executor to keep the process streamlined, so it’s practical to create a will and name an executor, regardless of how much property is left in the trust.

Taxes and Debts

Before any assets can transfer over to beneficiaries, all debts and taxes must be paid. With a will, you leave instructions for how you want these debts handled, especially if you’re using your will to forgive debts owed to you. This isn’t a good idea with a living trust, since a creditor could go after the trust, seek its termination and gain access to the assets within it. This is because of the very terms of the trust, which allow it to be changed or terminated at any time.

Planning Process

When it comes to the estate planning process, wills are much simpler. A will is just a document devoid of difficult language, which must be witnessed by two impartial people and signed by the will maker. A living trust isn’t complicated either, but it’s not quite as simple as a will. Living trusts cover all the trustee’s responsibilities, making them longer and more complex overall. Living trusts also require more formality to form which adds a few steps to the whole process and a living trust must be funded in order for it to be effective.

What Do Wills and Living Trusts Not Cover?

No matter their differences, there are a few things that neither a will nor a living trust can be used for, including:

Reducing estate taxes: Neither document can reduce estate tax, but not all estates owe taxes.
Distributing money to pets: Pets are legal property themselves, so they can’t own property. Still, pets are important for some people, so a will can instead include provisions for a pet caretaker and a pet trust can be made.
Leaving final wishes: Final wishes, such as viewing or funeral instructions, can be left in a will, but not in a living trust. Instead, they should also be put in a separate document altogether.
Leaving passwords for accounts: The executor of your will may need to access your online accounts or devices after your death, so it’s important that they have login information. This information shouldn’t be in a will or a living trust, however. Instead, like the final wishes, sensitive login information should be left in a separate document that’s stored in a secure location with other estate documentation.

Learn More at Tanko Law

Everyone should have a will. Taking the step to form a living trust should be discussed with your estate planning attorney to confirm it will work for you. Factors like age, wealth and marital status all determine the need for a living will, so it’s best to speak with an estate planning attorney to decide if it’s the right choice for you.

If you’re ready to get started with your estate planning in Montana, Tanko Law can help. Our estate planning attorneys are here to offer advice and guidance in deciding between a will or trust, so contact us today to see what we can do for you!

She took the road less traveled to a law career

Fri, 01 Aug 2025 09:42:41 GMT

When Katherine Troiano was in law school, her classmates would come to her for advice.

“They called me law school Mom,” she said with a smile last week.

Troiano was definitely a non-traditional student. She had 20 years as a paralegal under her belt when four years ago, she decided her career was in a rut and she wanted to go further.

Brian Tanko, her boss at the time and owner of Tanko Law Firm , encouraged her to apply to the University of Montana Law School.

Read the entire article at https://hungryhorsenews.com/news/2025/jan/29/she-took-the-road-less-traveled-to-a-law-career/

Pros and Cons of Using a Trust to Protect Your Assets

Wed, 11 Dec 2024 09:55:20 GMT

Estate planning can be challenging, but it’s essential to ensure your wishes are honored and your loved ones are cared for. A trust is a powerful tool that allows you to protect and manage your assets , giving you control during your lifetime and simplifying the distribution process afterward. While trusts offer many benefits, they also come with potential risks.

What Is a Trust?

A trust is a legal arrangement that allows one party, known as the grantor, to transfer assets to another party, called the trustee, who holds these assets for the benefit of a third party, known as the beneficiary. By establishing a trust, you can define specific terms and conditions for managing and distributing your assets, providing more control over how they’re used and distributed, both during your lifetime and after.

Types of Trusts

There are several types of trusts, each with distinct characteristics and benefits. The two primary types are revocable trusts and irrevocable trusts.

Revocable Trusts

A revocable trust, sometimes called a living trust, can be modified, amended, or even revoked by the grantor at any time during their life. This flexibility makes revocable trusts an appealing option for those who want to retain control over their assets.

However, while revocable trusts offer ease of modification, they typically do not provide protection from creditors. Since the grantor still has control over the assets, they remain part of the grantor’s estate and can be subject to creditor claims.

Irrevocable Trusts

In contrast, an irrevocable trust is one that cannot be easily modified or revoked once it’s created. By placing assets in an irrevocable trust, the grantor effectively relinquishes control over them, which may offer distinct legal and financial advantages.

Irrevocable trusts provide a level of asset protection, as assets within the trust are generally shielded from creditors. Additionally, they can offer certain tax benefits, such as reducing the grantor’s taxable estate, which may be helpful for estate tax planning. However, because irrevocable trusts are more permanent, they require careful consideration and planning.

Purpose of Trusts

Trusts are established for a variety of reasons, tailored to meet personal, financial, and family needs. Some common purposes include:

Avoiding Probate : By placing assets in a trust, they can bypass the probate process, allowing for a faster and more private transfer to beneficiaries.

Asset Management : Trusts provide a structured way to manage assets, which is especially helpful for complex estates or when beneficiaries may need guidance in managing their inheritance.

Protecting Beneficiaries : Trusts can protect assets for beneficiaries who may be young, financially inexperienced, or facing personal challenges. They also allow the grantor to specify conditions or ages at which beneficiaries receive assets, ensuring financial stability over time.

Benefits of Using a Trust for Asset Protection

Trusts offer unique advantages for individuals seeking to protect their assets and streamline the estate distribution process. Here are some key benefits that make trusts a valuable component of a comprehensive estate plan.

Avoiding Probate

A significant benefit of a trust is that it allows your estate to avoid probate, the legal process required to distribute assets under a will. Probate can be lengthy and costly. By placing assets in a trust, they can be distributed to beneficiaries more quickly, avoiding the delays and expenses of probate. This can help your loved ones receive their inheritance faster and with less hassle.

Control Over Asset Distribution

With a trust, you maintain control over how and when your assets are distributed. This is especially valuable if you want to manage distributions for young or financially inexperienced beneficiaries. You can specify conditions, such as age requirements, ensuring that assets are distributed responsibly according to your wishes.

Protection for You and Your Loved Ones

Trusts can protect assets from being squandered by beneficiaries who may not be prepared to manage them. Additionally, certain trusts offer protection for you during your lifetime, providing financial assistance if needed. This level of asset control can safeguard both you and your beneficiaries in the long term.

Cons of Using a Trust for Asset Protection

While trusts offer significant benefits, it’s important to consider potential drawbacks to determine whether a trust is the best choice for your estate planning.

Cost and Complexity

Setting up a trust typically involves higher costs and more complexity than a will. Establishing a trust requires legal assistance, which can incur attorney fees and ongoing maintenance expenses. Additionally, once a trust is created, properly funding it—that is, transferring assets into the trust—is essential for it to function as intended. This process can be complex and may require legal and financial guidance to manage over time.

Loss of Control

With irrevocable trusts, the grantor gives up control over the assets once they are transferred into the trust. Unlike revocable trusts, irrevocable trusts cannot be easily altered or revoked, which can be a significant consideration for individuals who may want flexibility with their assets in the future.

Common Misconceptions About Trusts

Trusts are often misunderstood, leading to misconceptions that can deter people from exploring this valuable estate planning tool. Let’s address a few of the most common myths.

Misconception 1: Trusts Are Only for the Wealthy

Many people believe that trusts are only beneficial for those with substantial wealth, but this is far from the truth. Trusts can be valuable for individuals with various levels of assets. They provide flexibility, privacy, and control over asset distribution, which can be beneficial whether you’re safeguarding modest savings or a significant estate. By establishing a trust, individuals can customize how their assets are managed and distributed, making this tool accessible and advantageous for a broad range of financial situations.

Misconception 2: Trusts Completely Eliminate Taxes

While trusts can provide tax benefits, they don’t necessarily eliminate all tax obligations. Certain types of trusts, like irrevocable trusts, may reduce estate taxes and offer some income tax advantages.

However, tax treatment varies based on the type of trust and the assets involved. It’s essential to work with an estate planning attorney or tax professional to understand the specific tax implications of a trust and how it can fit into your overall financial strategy.

Misconception 3: Once Established, Trusts Cannot Be Changed

While it’s true that irrevocable trusts are generally permanent and cannot be altered, revocable trusts offer flexibility. With a revocable trust, the grantor can amend, add to, or even dissolve the trust entirely if their circumstances change. This flexibility allows individuals to adapt their estate plans over time, making revocable trusts an appealing choice for those who anticipate potential changes in their financial or personal situation.

Protect Your Legacy with Tanko Law’s Trusted Expertise

Creating a trust requires precision and understanding of legal requirements. A qualified trust attorney will ensure that your trust is properly structured, legally binding, and tailored to meet your estate planning goals. Tanko Law specializes in establishing trusts in Montana, ensuring your assets are safeguarded for your heirs and beneficiaries. Contact us today for a free initial consultation to learn more about how a trust could benefit you and your loved ones.

Managing Your Finances with Chronic Illness: Essential Tips & Strategies

Wed, 20 Nov 2024 10:10:06 GMT

Managing finances can be particularly challenging for those with chronic illnesses, as they face not only routine financial pressures, but also additional costs and uncertainties related to their health. Understanding the right insurance options and establishing legal safeguards are essential steps in securing a stable financial future. This guide provides key strategies and insights into navigating these complex issues effectively.

Preparing Financially for Long-term Healthcare Costs

When managing finances, especially with a chronic illness, it’s crucial to have a clear grasp of your monthly expenditures. Start by listing all your fixed and variable expenses . Fixed expenses include items like rent, mortgage payments, and insurance premiums, while variable expenses cover groceries, utilities, and medical costs.

Calculating Your Emergency Fund

To ensure financial stability during health crises, you should aim to build an emergency fund.

Here’s how to calculate the amount you need:

Sum Up Your Monthly Expenses: Add all your fixed and variable expenses to get a total monthly expenditure figure.
Multiply for Longevity: Financial experts recommend having at least three to six months' worth of expenses saved. For example, if your total monthly expenses are $3,000, your emergency fund should be between $9,000 and $18,000.

Strategies for Saving

Efficient Budget Management

Keeping your budget in check is simpler with a plan. Review your spending monthly and adjust as needed to avoid overspending in any category. Use budgeting apps or spreadsheets to track everything effectively.

Increasing Your Savings

Automated Transfers: Set up automatic transfers to your savings account right after you receive your paycheck. This “pay yourself first” strategy ensures you consistently contribute to your savings without the temptation to spend the money elsewhere.
High-Interest Savings Accounts: Invest your emergency fund in a high-interest savings account. These accounts offer better yields compared to regular savings accounts, helping your money grow faster while still being accessible for emergencies.

Understanding Your Healthcare Insurance Options

Choosing the right healthcare plan is essential, especially when managing a chronic illness.

Here are key factors to consider:

Premiums: This is the monthly cost you pay for your health insurance. While a lower premium might seem attractive, it often comes with higher deductibles and out-of-pocket expenses.
Deductibles: The amount you pay for healthcare services before your insurance starts to pay. A plan with a higher deductible usually means lower monthly premiums but higher initial out-of-pocket costs.
Coverage Specifics: Assess what types of services are covered under the plan, including specialist visits, outpatient services, prescription medications, and emergency care. Ensure that the services you require most are well covered.

Comparing Two Hypothetical Insurance Plans

To illustrate how to choose between plans, consider these two hypothetical options:

Plan A: Has a monthly premium of $250 with a deductible of $1,200. It offers excellent coverage for prescription medications and specialist visits, but has a higher cost for emergency room visits.
Plan B: Offers a monthly premium of $150 with a deductible of $3,000. It covers primary care visits and generic prescriptions well, but requires higher co-pays for specialist services.

In choosing between these plans, consider your regular medical needs. If you frequently require specialist care or expensive medications, Plan A might be more cost-effective despite its higher premium. Conversely, if your medical costs are generally low, the lower premium of Plan B might save you money overall.

The Role of Health Savings Accounts (HSAs)

Benefits of Using an HSA with High-Deductible Health Plans

Health Savings Accounts (HSAs) are powerful tools for managing healthcare expenses, particularly in conjunction with high-deductible health plans (HDHPs).

Here are some benefits:

Tax Advantages: Contributions to an HSA are tax-deductible, the money grows tax-free, and withdrawals used for qualified medical expenses are not taxed.
Flexibility: The funds in an HSA roll over year after year. You’re not required to spend it within a calendar year, providing flexibility and a means to save for future healthcare needs.
Investment Potential: Over time, you can invest HSA funds in stocks, bonds, or mutual funds, potentially increasing your savings significantly.

Importance of Disability Insurance

Disability insurance is a critical component for anyone, particularly those with a chronic illness, as it provides financial stability if you're unable to work due to your health.

How Disability Insurance Works

Disability insurance policies provide financial assistance by replacing a portion of your income if you become disabled and are unable to maintain your current employment. These benefits are typically a percentage of your regular income, ranging from 50% to 70%.

Why It’s Essential for Those with Chronic Illnesses

For those living with chronic conditions, the risk of suddenly being unable to work is a serious concern. Disability insurance acts as a financial buffer, helping to cover living expenses and medical costs during periods of reduced income.

Choosing the Right Disability Insurance Policy

Benefit Period: Consider how long the policy will pay out after you become disabled. Options typically range from a few years to until retirement age.
Waiting Period: This is the time between becoming disabled and when benefits start. Shorter waiting periods generally increase premiums.
Coverage Scope: Ensure the policy covers disabilities related to your specific chronic illness and check for any exclusions.
Premiums: Weigh the cost of the policy against the benefits it provides. Sometimes, paying a higher premium is worthwhile for more comprehensive coverage.

The Benefits of Life Insurance

Life insurance provides financial security to your dependents and can be an integral part of estate planning.

Types of Life Insurance

Term Life Insurance: Provides coverage for a specific period, such as 10, 20, or 30 years. It's often less expensive and suitable for those needing coverage during critical earning years.
Whole Life Insurance: Offers coverage for your entire life, combining a death benefit with a savings component that accumulates cash value.

Determining the Best Type for Your Situation

Choosing between term and whole life insurance depends on your financial goals, your age, and your health. Term life might be sufficient if you only need coverage until your children are financially independent. In contrast, whole life insurance can be used as part of a long-term financial strategy.

Life Insurance as Part of Comprehensive Estate Planning

Including life insurance in your estate planning ensures that your beneficiaries have the financial resources they need after your passing. It can help cover estate taxes, debts, and provide an inheritance. Consulting with an estate planning attorney can help integrate life insurance effectively into your broader financial plans as we’ll explore next.

How an Estate Planning Attorney Can Protect Your Financial Future

Estate planning attorneys play a crucial role in helping individuals secure their financial future, especially those dealing with chronic illnesses. These professionals are not just for the wealthy; anyone who wants to manage their financial matters effectively can benefit from their services.

How Estate Planning Attorneys Help in Managing and Safeguarding Assets

Estate planning attorneys provide expert guidance on how to protect and efficiently manage your assets. This includes:

Creating Wills and Trusts : They help draft legal documents that specify how your assets should be distributed upon your death, ensuring that your wishes are honored.
Planning for Incapacity: They prepare directives and powers of attorney that allow designated individuals to manage your financial and healthcare decisions if you are unable to do so yourself.

Specific Services Beneficial for Individuals with Chronic Illnesses

For those with chronic conditions, estate planning can involve additional layers of consideration:

Special Needs Trusts : These trusts ensure that beneficiaries with chronic illnesses can receive inheritance without losing access to essential government benefits.
Medical Directives: Attorneys draft living wills and other directives that specify your preferences for medical treatment if you become incapacitated.
Long-Term Care Planning: They can advise on legal and financial strategies to afford long-term care, considering the high costs associated with ongoing healthcare needs.

Secure Your Financial Future with Expert Guidance from Tanko Law

In managing finances with a chronic illness, it's essential to carefully plan and seek expert advice . Ensuring a robust emergency fund, selecting the right healthcare and insurance options, and securing your assets through estate planning are crucial steps. Contact us today to schedule a consultation and take proactive steps towards financial stability and peace of mind.

9 Critical Estate Planning Mistakes to Avoid in Montana: Expert Advice for All Income Levels

Fri, 06 Sep 2024 10:17:54 GMT

When you think of estate planning, do you think of planning your own future, or simply the lives of the rich and famous? Exotic destinations, sports cars, luxury yachts, mansions and the like? Well, the truth is everyone from society’s elite to the elderly widow on Main Street, USA has an estate worth planning, which means everyone, regardless of their wealth can suffer the same mistakes in doing so.

Planning for Incapacity: Legal Documents You Need

In Montana, you are considered an adult at age 18. Up to that time, an individual younger than 18 is considered a minor and his or her parents or legal guardians make decisions concerning that person’s health, welfare, and financial well-being. On your 18th birthday, you become solely responsible for own personal, health care and financial decisions. To address these needs in time of incapacity, it is necessary that you appoint an agent to make health care decisions for you and manage your financial affairs. The only way to do that is to create a Durable Power of Attorney for Health Care Decisions and a Durable Power of Attorney for Asset Management. Minus these documents, the only way to cure these legal “illnesses” is through court proceedings involving as many as 3 attorneys – a very expensive endeavor indeed.

Protecting Minor Children: Importance of Guardianship Designation

What happens to your minor children if you were to become incapacitated or pass away? For us parents, the very thought of leaving children in such a vulnerable state is unfathomable, but sadly this story unfolds time and again. Thankfully, under Montana law, you are permitted to name “backup parents,” called Guardians. These persons may be designated in your Last Will and Testament, and would receive preference before the court in so serving. A Guardian is vested with the same duties and responsibilities as a parent, and most importantly, the persons you believe best share your values and moral code to impart upon your children. Absent these designations, it is possible your children could be wards of the State, falling into foster care, or be ordered to spend their remaining youth with persons you least likely would have chosen.

Estate Taxes: Strategies to Minimize Tax Burden

The only two certainties in life are death and taxes. – Benjamin Franklin. Our form of government has made sure it will collect its rightful share during your lifetime and even at death. To keep the government at bay, our Supreme Court has ruled that no person should be forced to pay more than his or her share of taxes. A proper well drafted, proper estate plan can ensure you pass on to your loved the ones the maximum amount quickly and efficiently.

One tool used quite often is a Revocable Living Trust. This document can avoid probate , streamline administration, and under specific circumstances, eliminate the payment of federal estate taxes. Living Trusts are just one of a variety of estate planning tools available to you to protect your assets and minimize taxes.

Long-term Inheritance Planning: Protecting Your Legacy

You’ve worked hard to earn your fortune. You saved, invested, and protected your wealth for your own well-being, and those you love. Nothing is more maddening than seeing a lifetime of success squandered by spendthrift children, malcontent spouses, or plain misfortune – divorce, bankruptcy, etc. Long-term Inheritance Planning allows you to devise the terms and conditions upon which your estate will pass to your loved ones. Planning alternatives may include age timing of distributions, education requirements, asset protection planning, and more to best carry out your legacy.

Multi-State Property Ownership: Avoiding Probate Complications

Multi-State Administration. Generally, personal property, such as bank accounts, insurance proceeds, stocks, bonds, etc. are subject to estate administration under the laws of the state where the deceased was a resident. Real property, be it a home, commercial property, or unimproved land, is subject to administration in the state where that land is located. Unless you take legal precautions to address the administration of your personal property and real estate holdings, your estate could be diminished by the expensive costs of probate in multiple jurisdictions.

Retirement Planning: Preserving Wealth for Spouses and Heirs

Retirement plans single-handedly hold the largest amount of wealth for American today. Preserving this wealth between spouses and for heirs is risky business. Without careful consideration of your retirement plans, you could lose a majority of that to the government. The question you have to ask

yourself is can you afford not to plan?

Business Succession Planning: Ensuring Your Company's Future

Even though 70% of America’s businesses are considered small businesses, less than 30% survive following the death of their founder. Family businesses have provided growth, prosperity, and opportunity for families and without succession planning there is no hope that this will continue. Business succession planning can involve the use of insurance products, estate planning tools, and asset protection tools to meet the demands of today’s complex business environment.

Joint Tenancy: Potential Pitfalls to Avoid

A common misconception is that people believe titling all of their assets jointly with their spouse or children or heirs will best avoid the complications of estate administration. Nothing could be further from the truth. Assets left in joint tenancy will undoubtedly avoid probate administration, but the costs may be too much to bear. Joint tenancy assets are subject to creditor claims of all of the joint tenants, even those who contributed nothing towards the property. Furthermore, such transfers upon death may actually increase the amount of federal estate taxes paid on the property.

The Importance of Creating and Updating Your Estate Plan

A mere 30% of Americans have actually taken the care and time to create an estate plan. And of those who have, very few have reviewed or updated their existing plans. The result is an unintended cost of administration, frustration among family members, and unrealized expectations. If you have an estate plan, now is the time to review it carefully. If you have no plan in place, now is the time to create one. Call us today for your free consultation to see what we can do for you.

For more information, please contact Estate Planning Attorney Brian C. Tanko at Tanko Law Office 406-257-3711, or visit us on our website at www.tankolaw.com and Facebook at :www.facebook.com/tankolaw

How to Start a Business in Montana (2024): Strategies, Financing, and Legal Insights

Sun, 30 Jun 2024 10:53:33 GMT

In the world of entrepreneurship, where the landscape is ever-evolving and competition is fierce, the saying "fail to plan, plan to fail" has never been more fitting.

Turning a vision into a viable business in Montana demands more than just a great idea—it requires rigorous planning, financial savvy, and the right legal structure. Here's how to get started on the right foot in the Treasure State:

The Importance of a Well-Formed Business Plan

Turning a business idea into reality starts with a solid plan. Here's why a well-crafted business plan is your first big step toward success:

Refines Your Idea: Writing down your plan helps you sort through your ideas, keeping the great ones and ditching what doesn’t work. It's like a reality check for your business dreams.
Sets Your Foundation: Your plan lays out who you are as a business—your values, your mission. It's the core from which everything else grows.
Plans Your Finances: It’s your financial crystal ball. A good plan forecasts your budget, helping you keep your business financially healthy from the get-go.
Leverages Montana’s Benefits: If you're in Montana, your plan should reflect the local perks. With friendly tax rates and a supportive environment for small businesses, your plan can tailor strategies to make the most of these advantages.

A business plan isn’t just paperwork. It’s your roadmap, financial guide, and a reflection of your values. Especially in Montana, where the climate is ripe for small businesses, a thoughtful plan sets you on the path to success.

Choosing the Right Business Structure

Choosing the right business structure is a critical decision for any entrepreneur. This choice impacts your legal liabilities, tax obligations, and the ability to raise capital. It's all about finding the right balance between personal asset protection and tax implications. Here's a breakdown of the common business structures and their benefits to help you align this choice with your business plan:

Sole Proprietorship

Advantages:

Easy and inexpensive to form, complete control by the owner, and simplified tax preparation.

Considerations:

The owner is personally liable for all business debts, which can put personal assets at risk.

Partnership

Advantages:

Easy to establish, with more resources for the business due to the combination of skills, knowledge, and financial contributions from multiple owners.

Considerations:

Partners can be jointly and individually liable for the actions of other partners, which can introduce risks you might not have considered

Considerations:

Can be more complex to set up than a sole proprietorship or partnership. Regulations vary by state. Must be created through the Secretary of State and requires annual reporting.

Advantages:

Offers personal liability protection to owners (members) and has the flexibility of being taxed as a sole proprietor, partnership, or corporation. It's a popular choice for balancing asset protection with tax benefits.

Limited Liability Company (LLC)

Corporations

Considerations:

Can be more complex to set up than other entity options. Regulations vary by state. Must be set up through the Secretary of State and requires annual corporate documentation and reporting.

Advantages:

Offers personal liability protection to shareholders and has the flexibility of being taxed as a sole proprietor through an S-Corporation tax status election. It’s an excellent choice for going-concern type businesses with employees

Making Your Choice

The right structure for your business should support your financial goals, growth plans, and operational needs, while minimizing risks and tax liabilities. Aligning this choice with your business plan ensures that your entity structure compliments your business strategy, market, and future goals.

Navigating Montana Taxation and Regulation

Montana's tax benefits for businesses continue to stand out, especially the absence of excise and sales taxes. This unique position reduces the overall tax burden on businesses, making it an attractive location for startups and small enterprises. Moreover, Montana consistently ranks favorably in business tax climate comparisons, thanks to its straightforward tax structure and incentives aimed at fostering business growth.

Licensing, Permits, and Regulatory Compliance

The evolving regulatory landscape demands that businesses stay informed about licensing and permit requirements. This includes understanding local zoning laws, which may affect where certain types of businesses can operate, especially with the rise of remote and digital work trends.

Moreover, sectors such as food service, healthcare, and education may face additional layers of licensing and permits due to the sensitive nature of their operations. It’s essential for businesses in these and other regulated industries to conduct thorough research and possibly consult with legal experts to navigate the complexities of state and federal regulations.

Digital and Remote Work Considerations

The shift towards digital and remote work models introduces new considerations for business compliance. For businesses embracing remote work, understanding the implications for tax obligations, data protection laws, and employee rights becomes even more critical. This shift may also affect the need for physical permits and how businesses engage with regulatory bodies online.

Ensuring your business is compliant in the digital age means staying updated on cyber security regulations, data protection laws, and remote work policies. It also means leveraging technology to streamline compliance processes, such as using digital platforms for permit applications and renewals.

Securing Financing and Managing Finances

The Vital Role of Financing

Securing the right financing is the fuel that powers your business from an idea into a fully operational entity. Modern strategies for obtaining investment, grants, and loans have evolved, offering a variety of opportunities for entrepreneurs. Whether it’s angel investors, crowdfunding platforms, venture capital, or traditional bank loans, selecting the right financing path depends heavily on your business model, industry, and financial projections. A well-crafted business plan not only showcases the potential of your business idea, but also acts as a persuasive tool in these efforts, demonstrating to potential investors or lenders the viability of your business and your capability to repay.

The Importance of a Polished Business Plan

As mentioned earlier, a detailed and polished business plan is indispensable when seeking financing. It serves as a roadmap of your business, outlining your vision, mission, market analysis, operational strategy, and, importantly, financial projections. This document should highlight how investments, grants, or loans will be utilized to achieve business growth. It reassures investors and lenders of your commitment and the potential for a return on their investment.

Managing Finances with Precision

Once financing is secured, the focus shifts to meticulous financial management, crucial for navigating the early stages of your business and beyond. Central to this is the establishment of a dedicated business banking account, separating personal finances from business transactions. This segregation simplifies the accounting processes, aids in tax preparation, and enhances financial clarity.

Effective management of finances encompasses more than just keeping track of income and expenses. It involves:

Regularly reviewing and adjusting your budget
Monitoring cash flow closely to prevent shortfalls
Keeping detailed records for all financial transactions
Planning for tax obligations well in advance

Connect with Tanko Law for Your 2024 Business Planning Needs

As we look toward the future, the importance of careful planning, seeking expert legal counsel, and implementing strategic actions in business cannot be overstated. These pillars form the foundation of enduring success in an ever-evolving commercial landscape. For Montana businesses, navigating the unique opportunities and challenges of this environment requires a keen understanding and a proactive approach.

Tanko Law, with our deep expertise and commitment to the local business community, stands ready to guide Montana enterprises through these complexities. Whether you're laying the groundwork for a new venture in 2024 or looking to expand your existing operations, the right legal partner can make all the difference. Tanko Law offers comprehensive consultations to ensure your business planning is robust, compliant, and strategically aligned with your long-term objectives. Contact us today to get started!

Will You Owe Taxes on Your Inheritance?

Sun, 30 Jun 2024 10:23:22 GMT

The idea of inheritance tax is one that terrifies many people. Will you be able to keep the house in which you grew up? Are you going to lose your parents’ antique furniture? What about the family farm or the lake house? How are you going to pay all the bills like funeral and creditor claims, when the government wants their cut first? Losing a loved one is already hard enough, but having the government treat it like their profit source can leave cold and frustrated. Take a deep breath, because it’s not all that bad.

First, for most people it is unlikely you’ll need to pay any death taxes based on your inheritance. However, there can be exceptions to this rule, which can have a measurable effect on what, if any, bills you pay. Let’s explore the specifics of inheritance taxes and estate taxes, how they might affect you, and what you can do to hang onto your inheritance and memories.

Key Takeaways

Inheritance taxes (also known as “state death taxes”) vary by state, with some states imposing taxes on heirs/beneficiaries inherited assets, estates, or both.
Estate taxes (also known as the “Federal Estate Tax” or “Death Tax”) are incurred when a decedent has a taxable estate greater than the Estate Tax Exemption amount, which is currently $13.61 million. This tax undergoes periodic changes, impacting taxpayers’ obligations and planning strategies.
Montana and several other states do not have an inheritance tax, offering tax advantages for residents.

Understanding Inheritance Taxes

Inheritance taxes are often a source of confusion and concern for individuals navigating the complexities of estate planning. To gain clarity on this matter, it’s crucial to understand the distinction between inheritance taxes and estate taxes.

Defining Inheritance Taxes vs. Estate Taxes:

Inheritance taxes and estate taxes are two distinct concepts, although they are often used interchangeably. Estate taxes are imposed on the total value of a deceased person’s estate before it is distributed to beneficiaries. This tax is typically paid by the estate itself and is calculated based on the overall value of assets, including cash, real estate, investments, and personal property, less certain types of approved deductions against the overall value.

Inheritance taxes are levied on the assets received by individual heirs/beneficiaries after the estate has been distributed. Unlike estate taxes, inheritance taxes are assessed at the state level and may vary depending on the beneficiary’s relationship to the deceased, value of the inherited assets, state in which the estate was administered, and the state in which the heir/beneficiary resides. The tax can be assessed against the Estate for the heir/beneficiary or it can be assessed and due directly from the heir/beneficiary.

Assessment of Inheritance Taxes:

Inheritance taxes are typically calculated based on the fair market value of the assets received by beneficiaries. The tax rate and exemption thresholds vary from state to state, with some states offering exemptions for certain types of assets or for beneficiaries who are immediate family members of the deceased.

For example, in Pennsylvania , inheritance taxes are imposed at rates ranging from 4.5% to 15%, depending on the beneficiary’s relationship to the deceased. However, spouses are exempt from inheritance taxes entirely, while children and grandchildren enjoy a lower tax rate compared to other beneficiaries.

Do I Have to Pay Inheritance Taxes in Montana?

Montana residents can breathe a sigh of relief when it comes to inheritance taxes, as the state does not impose an inheritance tax. This means that heirs/beneficiaries in Montana are not subject to state-level death taxes on the assets they receive from a deceased individual’s estate. This absence of an inheritance tax provides a significant advantage for individuals inheriting assets within the state.

However, there is a twist . Montana residents may still face inheritance tax obligations if they inherit from someone who lived in one of the six states that charge an inheritance tax.

Exceptions to inheritance being non-taxable:

Inheritance is generally tax-free, but there are situations in which an inheritance or part of it may be subject to taxation. If you inherit money from the following sources, a portion of it may be taxable:

Income earned by the decedent but received after death: salary, wages, commissions, rents, dividends, bonuses, etc.
Funds in traditional retirement accounts like 401K or IRA (These plans have specific rules regarding distributions.)
Appreciated gain in certain situations could be deemed income received, and thus taxable.

It is always best to consult with your tax professional to determine what, if any, portion of your inheritance is subject to income tax or a death tax.

Other States Without Inheritance Tax Laws

Additionally, it’s worth noting that Montana is not alone in its “no inheritance tax status.” Several other states also do not have inheritance taxes, offering similar benefits to their residents. Those states include:

Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Wyoming

Residents of these states can inherit assets without the burden of state-level inheritance taxes, providing a favorable environment for wealth transfer and estate planning.

Secure Your Legacy: Schedule a Consultation with Tanko Law Today!

Ready to take control of your estate planning and safeguard your legacy? Contact Tanko Law today to explore further resources and schedule a consultation with our estate planning experts. Let us guide you through the intricacies of inheritance taxes and ensure that your wishes are honored while minimizing tax complexities for your beneficiaries.

Don’t wait until it’s too late. Plan ahead with Tanko Law and secure your family’s financial future today.

Tips for the Elderly to Avoid Scams

Fri, 07 Jul 2023 11:05:18 GMT

Sadly, we live in a world where scammers are a huge part of everyday life.

Even worse, they frequently prey on the elderly. Scammers have manipulated the elderly into giving them money, access to their insurance and computers, control over their bank accounts. Scammers even lie about family members in distress to force the elderly individual to give up assets. Scammers use coercion, bullying, tricking, and outright lying in order to get the elderly to relinquish their assets.

Here we’ll discuss common scams that target senior citizens, what can be done about them, and how to protect yourself and your loved ones.

Common Scams That Target Seniors

There are a number of scams that target senior citizens. Some of the most common are:

Fake Lottery Scam

A senior gets a call saying they’ve won millions of dollars and they need to pay the administrative fees or taxes in order to receive it.

Grandparent Scam

A senior gets a call or email from someone posing as law enforcement or a medical professional who claims to be reaching out on behalf of a family member in financial distress (overdue rent, payment for car repairs, etc.). They might even be so bold as to pose as a “grandchild.”. The scammer asks for money to be wired to pay for whatever the manufactured “financial crisis” is.

Fake Virus or Ransomware

Pop-up windows simulating virus-scanning software will fool victims into either downloading a fake anti-virus program (at a substantial cost), OR the pop-ups claim that the computer has been locked and they must call a number and make a payment within a very short time or their computer will be wiped.

Tech Support Scam

Scammers who claim to be from legitimate companies demand payment for unnecessary tech support services, or to fix a problem that doesn’t actually exist. Sometimes they will even create fake websites with a number to call to receive support.

False Online Shopping Scam

Websites that seem like legitimate storefronts are set up by scammers…but they only exist to collect your payment information, or to sell stolen goods. These sites can look surprisingly real, and you may find them on social media or in a websites’ comment section.

Email/Phishing Scam

Email messages are sent to a senior from what appears to be a legitimate company or institution, asking them to “update” or “verify” their personal information. Scammers also will use Facebook or LinkedIn to gather this information. They can then use the victim’s connections to trick the victim into thinking their contact is messaging them.

Romance Scam

A scammer will use a fake online identity to gain a victim’s affection and trust. The scammer then uses the illusion of a romantic or close relationship to manipulate the victim. This kind of scam occurs on dating and social media sites.

Crime Scam

A senior gets a scary phone call saying that their name or identifying information was used in a crime such as a stolen car or illegal drug purchase.

Refund Scam

Scammers will claim that the senior was given too much money due to an accounting mistake and demand it back.

Deals on Prescriptions Scam

Scammers offer discounted medications. They may even send a “sample drug” that could be harmful if taken.

Social Security Scam

Scammers will pretend to represent the Social Security Administration and that the senior’s COLA (cost of living adjustment) went through and they need additional money.

IRS Scam

A senior receives a call from someone saying they are with the IRS and that they owe money from back taxes and could be sent to jail if they don’t receive payment immediately.

These are just a few of the scams that scammers have come up with to torment and terrorize these most vulnerable individuals.

Financial Abuse Is The Most Common

Of all of the scams out there, financial abuse tends to be the most common. It makes sense. After all, most scammers are after money!

One of the key problems with this is that only 1 in 44 seniors actually report the crime. This may be especially true if the senior knows or is related to the scammer. Most of these crimes are perpetrated by people that are known to the victim, not by strangers. Although, scams by strangers often happen more quickly and result in much larger financial losses.

A conservative estimate of annual losses is around $3 billion, although to many, that’s far too conservative. A 2015 study by the financial services company TrueLink put the figure at $36.5 billion, more than ten times the original “conservative estimate”.

What’s Being Done About It?

More and more, both government and financial institutions are working to stop this abuse. House Bill 2610 was passed in October 2020, by a wholly unanimous vote in both the Senate and the House. It would seem that protecting the elderly is something where political differences mean nothing. Nobody wants to think of their elderly friend, relative, neighbor or anyone else they know or care about, being tricked or coerced into financial ruin. HB 2610 brings together experts to develop educational materials for online and walk-in retailers, financial institutions, and wire transfer companies to use to prevent the types of scams that occur in those areas.

Businesses Take Action to Stop Elderly Abuse

Moreover, many retailers are training their employees to spot this kind of situation when it is happening right in front of them. Potential victims are identified by their behaviors – generally, if they seem antsy, anxious, nervous, unusually aggressive, while doing a wire transfer or a credit card transfer, the clerk will stop and ask them a few questions to try to determine what is actually happening, and if it is, in fact, a situation where a fraud or scam is being perpetrated.

Increasingly, the companies involved in these types of situations are doing more. Transferring money via wire has become one of the biggest ways to steal from an elderly victim. Because of that, some wire transfer companies have added certain questions about the wire transfer that the customer must answer satisfactorily before the transfer can be initiated.

What You Can Do to Help Elderly Friends and Relatives Avoid Scams

It may seem like a helpless situation, but there are things you can do , too.

Regularly call or visit your friends or relatives who are seniors and make sure everything seems all right with them.
Be suspicious if they have a new “best friend” or something along those lines, and try to find out more about that relationship.
Block solicitations via email or text message to their phones.
Set up banking safeguards for their accounts so that too much cannot be withdrawn from their account.
Educate them on what is currently happening so that they are aware of what to look out for.

With your help, your senior friend or relative won’t become a victim of scammers’ activities.

Protect Your Loved Ones with Elder Law Services from Tanko Law Office

Making sure that elderly loved ones are adequately cared for can be an exceptionally difficult task. At Tanko Law Office , we offer a variety of elder law services to help clients and their loved ones. We take a compassionate approach to helping our clients with their legal needs, and we strive to ensure that the elderly and their families are properly protected.

The Ultimate Guide to Inherited 401(k)s

Fri, 07 Jul 2023 10:57:54 GMT

So, you find out that you are inheriting a 401k. This is great news! The questions now are: what do you do with it? How can you pay the minimum taxes on the amount left to you? Are there going to be any penalties for withdrawing funds from that account? If so, how much will they be? The questions, it seems, keep steadily increasing.

The associates at Tanko Law are here to help demystify your inherited 401(k). In our Ultimate Guide to Inherited 401(k)s, we’ll help you to navigate these waters and determine a strategy that works best for you.

What is a 401(k)?

A 401(k) account is a popular choice to save for retirement offered by many employers throughout the United States. It allows employees to deduct an amount from their paycheck to set aside for retirement from their pre-tax (gross) income. Frequently, employers also “match” the funds allocated to the 401(k) account by employees by a certain percentage: 50%, 100%, etc. So, if employee Bob puts $6 into his 401(k) every pay cycle and his employer matches 50%, then the actual amount Bob puts into the account is increased by $3. Many employees look at this match as “free money”.

Taxes must eventually be paid on funds in a 401(k) account, however, and they can be considerable, and even include penalties, if the account holder tries to withdraw them early. Many 401(k) accounts also offer employees the option to borrow against their 401(k)s and repay the amount borrowed over time through payroll deductions. Most people plan to use their 401(k)s and exhaust them during their lifetime. Life; however, doesn’t always go to plan.

What is an Inherited 401(k)?

An inherited 401(k) is an employee-sponsored 401(k) retirement account that was left by a person who passed on without spending everything in their 401(k). The person who passed on contributed to their 401(k) throughout their working life. Certain tax and financial laws govern this asset a little differently than others, so it’s important to understand the various options you have as the inheritor.

Different inheritors are designated by the account owner. The 401(k) allows its owner to designate a primary beneficiary (usually their spouse) and contingent beneficiaries (this can be anyone they choose). If the primary beneficiary has passed away or cannot be located, the account is inherited by the contingent beneficiaries. Funds are allocated to beneficiaries based on the account owner’s preferences.

What are your options when you inherit a 401(k)?

The spouse and the contingent beneficiaries have varying options in terms of how they can access the account’s funds. Overall, however, the beneficiaries have the following options:

Roll over the money into their own 401(k) (only spouses have this option)
Take a lump-sum distribution (get the entire amount of the account paid to you all at once)
If the account owner passed in 2019 or before, all of the funds must be withdrawn by the end of five years following the owner’s death (five year rule)
If the account owner passed in 2020 or after, all of the funds must be withdrawn by the end of ten years following the owner’s death (ten year rule)
Spread the withdrawals out over your lifetime (life expectancy method) by taking the required minimum distributions (RMDs) - this is limited to certain eligible beneficiaries, and applicable only if the owner died in 2020 or later

401(k) Spouse Beneficiary

When the account holder’s spouse inherits their 401(k), they have one option that differs from the rest: the opportunity to roll the money into their own retirement account . This is frequently the most attractive option because it defers all of the taxes on the inherited account to when they begin to draw on their own 401(k), which can be months or even years later. The government basically treats these funds as though they had been in the spouse’s account all along.

The only drawback is that those funds are inaccessible if you are younger than 59 ½, and until you begin to take withdrawals from your own retirement account. If you try to withdraw any of the funds any earlier, you’ll get hit with a 10% early withdrawal penalty and have to pay all of the taxes owed on the funds.

All of the other methods of withdrawal available to non-spousal, contingent beneficiaries, are also available to spouses, as we’ll discuss in the next section.

Inheriting a 401(k) as a Non-Spouse

As a non-spouse or contingent beneficiary, all of the other options outlined above are available to you. They are also available to the spouse.

Lump-sum distribution

With a lump-sum distribution, you withdraw all of the money from your inherited 401(k) all at once. This is quite simple and it gives you a large influx of cash, but the taxes on those funds must be paid back within a single year. Typically, you lose more of your inheritance to the government than you would have if you’d used another distribution strategy, but it can be nice to have the option if you’re in need of quick cash.

Five-year rule

If the account holder passed away in 2019 or earlier, the beneficiary can spread out the tax burden and the distribution of funds over five years from their date of death. This can help a beneficiary who is nowhere close to their own retirement maximize the amount of funds they receive and minimize the taxes they must pay.

Ten-year rule

Like the five-year rule, the ten-year rule gives the beneficiary ten years to withdraw all of the money from the account while paying the minimal possible taxes on those funds. This rule went into effect in 2020, so it doesn’t apply to the account of anyone who passed in 2019 or earlier.

Life Expectancy Method

The life expectancy method requires that you take RMDs -required minimum distributions- out of the account based on your life expectancy. You calculate your life expectancy by dividing the total value of the inherited 401(k) by the distribution period for your age in the IRS Single Life Expectancy Table . For every subsequent year, you subtract one from the distribution period and divide the remaining balance by the number that results.

This method fully minimizes the amount of taxes you pay on a 401(k) in a year. While this strategy was available to any beneficiary prior to 2020, after 2020 the only beneficiaries who can use this are:

Surviving spouses
Minor children of the account owner (until they reach the age of majority)
Disabled or chronically ill individuals
Anyone not more than 10 years younger than the account owner at the time of their death

In fact, not all 401(k) plans allow the use of this method, even if you do qualify for it. You can, however, request that the employer transfer the account funds to an inherited IRA, and then use this approach with the distribution of that account.

Seek Financial Advice

Like many major financial decisions, if you’re determining how to manage a newly-inherited 401(k) it makes sense to enlist financial professionals to guide you through the process. At Tanko Law, our attorneys can help you get the ball rolling on the best possible strategy for your newly-inherited 401(k) account. Contact us today!

What Role Does An Attorney Play In Forming A LLC?

Tue, 20 Dec 2022 11:12:28 GMT

You’ve made the decision to move forward with your business and form an LLC. Lucky for you, doing so seems so easy! A brief Google search returns a plethora of DIY products and services to help you get your new LLC off the ground. You’re on your way!

Actually, forming an LLC isn’t quite as simple as it seems. The drafting and filing of legal documents like the Articles of Organization, electing the type of LLC structure to be used, paying the correct filing fees, tax considerations, management responsibilities and even deciding if an LLC is the right way to go can complicate things quickly.

Fortunately, with an experienced business planning attorney at your side, these corporate lawyer issues can be simplified and ironed out early for successful entity launch! Working with a corporate lawyer is the tried-and-true way to take your business to the next level rapidly and effectively, while ensuring all of the necessary “i’s are dotted” and “t’s are crossed.”

Benefits of Using a Lawyer to Form an LLC

The benefits of hiring a business planning attorney to assist with the creation of your LLC are numerous. Your attorney will:

Help you decide if you should form an LLC instead of another business entity
Provide you with details as to why an LLC may be the most appropriate legal structure
Determine if your business is eligible to register as an LLC with your state
Determine in which state you should register your LLC, if not in your own state
Draft and file the Articles of Organization, an Operating Agreement, and Initial Minutes for your business, which provide the foundation for the workings of your LLC
Assist you in understanding state-specific LLC laws and compliance
Maintain detailed corporate books and records (important if needed for lawsuits or audits)
Check for name availability of your business name and filing a d.b.a. for your LLC
Investigate licensing specific requirements for your business

As you can see, much is involved with forming an LLC well beyond simply filing for a name with the secretary of state or buying a kit. Laws governing the operation of LLCs are quite serious, and failure to follow all statutory requirements can result in adverse liability consequences and potential financial loss. An experienced business planning attorney can make sure you aren’t missing critical information necessary for a successful business venture..

How To Determine Whether an LLC Is the Right Legal Entity for You

An LLC is only one of multiple options available for business incorporation. Various other corporate entities exist, and it might turn out that your business would be better suited for:

a corporation
a limited partnership
a sole proprietorship
a general partnership
another form of limited liability entity

A corporate lawyer will assess your business and help determine what type of entity is best.

Numerous Legal Requirements Exist To Create an Effective LLC

The legal requirement that exist in order to create an effective LLC are considerable. While it may seem that you simply need to file some paperwork and get started, doing so can put you in the line of fire for audits and lawsuits down the road.

Working with a corporate attorney ensures that your LLC is created within the existing legal framework. Your attorney will make sure that all of the proper Articles of Incorporation and various other paperwork are completed and that you are poised for success from the beginning.

Additionally, multiple corporate formalities must be maintained for your LLC’s successful start. These include maintaining bylaws, adhering to operating agreements, formalizing meetings of shareholders and directors, filing the proper DBA paperwork for any names your business will use, issuing stock certificates, and maintaining a corporate book.

They may also advise you on tax issues and file the necessary paperwork, ensure your registration with all required government agencies, and work with you to build a relationship for any future business needs.

State Offices Cannot Provide You With Legal Advice

It’s important to note that while state offices, such as the Secretary of State’s office for your state, can offer useful tips endpoint you in the right direction, they cannot offer you legal advice. Only your attorney can do so.

The Manual for Your LLC: The Operating Agreement

Your operating agreement specifies the nature of your business, its conduct, and its ground rules. Your operating agreement dictates all of your rights and obligations as an LLC. It lays out all of the groundwork of your business clearly and gives the government transparency in how your LLC will function.

You can find many free, do-it-yourself, print-from-online operating agreements simply by searching for “operating agreement LLC”, but these tools don’t conform to the specific foundation, requirements, and operations of your LLC. Using one of these tools may leave your business open to threats of audits and legal actions.

Legal Guidance in Creating Your LLC

Your corporate attorney can provide you with all of the legal requirements to successfully create your LLC. In doing so, your attorney provides you with a framework for setting up your business to succeed and thrive. From the determination of an LLC as the right entity for your business to the printing of stockholder certificates, your attorney is there every step of the way to help ensure the successful creation of your business. From there, it’s all yours!

How Much Does A Corporate Attorney Cost?

Don’t let the term “corporate attorney” scare you away from making the best possible decisions in creating your LLC. On average, corporate attorneys change around $425 to assist in creating a new LLC and getting the business started by filing all of the proper paperwork, and adhering to any other requirements.

Creating your LLC is an exciting and adventurous process. The various and complex requirements to ensure it is set up correctly are best navigated by a corporate attorney familiar with your state’s requirements for business entities.

Are you looking for an attorney to assist you in creating your LLC? Find Montana’s best at Tanko Law Firm .

Do You Need a Will If You Have No Kids?

Thu, 20 Oct 2022 11:17:38 GMT

Many people begin the process of creating their Will after getting married or as they start to have children, wanting to ensure their dependents are taken care of to the best of their ability. What about those who choose a child-free life or remain single?

Do You Need a Will If You’re Child-Free?

The answer is simple: you should always maintain a valid, legal will no matter if you have kids or not. Keep reading to discover why people, including those who are child-free, should have a will during any stage of life.

What is a Will?

A Will is a legal document that is created and written while a person is still alive that clearly spells out how their assets should be divided. A Will is one, if not the most common, estate planning tools utilized today. These make clear exactly what your intentions are for your more significant financial obligations like a home, car, and bank accounts and sentimental items like family heirloom jewelry, collectibles, and even digital assets .

KEEP IN MIND: A will does not stop the probate process – a way for creditors and other beneficiaries to be made aware of your death and to settle any debts or obligations that are still outstanding.

What Happens if You Die Without a Will in Place?

If you pass away without creating a Will , the term is called Intestate. Your assets are divided between heirs assigned based on your state’s law. These heirs are almost always family members (often referred to as Kin) and are ranked in order of how close they are related to you.

If you do not have living parents or siblings, your estate may default to a distant relative rather than a close friend or charity of your choosing.

Suppose you have a romantic partner that you haven’t legally married upon your death. They will not be designated as an heir in most cases, even if you’ve listed them as a beneficiary in life insurance policies or retirement plans you may carry.

Having a valid Will drafted will help those closest to you avoid costly and time consuming legal battles in probate since your wishes will be clearly outlined.

What Happens to Your Pet When You Pass Away?

Pets are a part of the family. Animals like parrots and tortoises can live a very long life, often outliving their owner. You can easily add a pet clause to your Will to make sure your beloved companions continue to receive the care they deserve and have been provided with prior to your passing. While you can’t leave money directly to a pet, you can direct money to be given to a family member or friend with the sole purpose of pet care costs.

Petbest.com offers another alternative: “Some pet owners may want to create a trust to ensure the care of their pet by allocating money specifically for the care of the pet after the owner’s death. An estate lawyer would need to be consulted to create a trust in this circumstance…A trust provides the maximum assurance that a pet will be cared for in accordance with an owner’s wishes.”

Should You Write Your Own Will?

There are websites and templates available online that allow you to “draft your own” Will. While these documents can be helpful in guiding you through estate planning, keep in mind that they often do not take into consideration your state’s specific probate laws. DIY estate planning kits can save you money now but may end up costing your loved ones legal fees to fix mistakes down the line.

A Will can be typed or handwritten, but you’ll need to review your state’s procedures to ensure it is signed correctly in order for it to be considered valid. You may need witnesses or specific language for your state to recognize the document, so be sure to do thorough research or have an attorney review what you have written.

Is a Will Enough Protection for my Assets?

A Will allows an executor to carry out your wishes upon your death, but what happens if you become incapacitated by an illness or accident? Many choose to create a living trust to protect their business and other assets in case of this very scenario. A trust is “funded” by adding your assets to it, like real estate titles, bank accounts, and stocks. These funded assets will not be considered during probate court (but will be subject to creditors if money is owed), which is a considerable advantage over the standard Will.

Tanko Law has a team of experienced lawyers who specialize in estate planning and probate matters. We are ready to guide you every step of the way, including drafting and administering wills and trusts, assisting you with probate court, and offering sound guidance so that you are well-informed and can confidently make decisions about your assets and estate. Call (406) 257-3711 or leave us a message on our contact page to begin the process of drafting your will and gaining peace of mind.

6 Reasons to Retire in Montana

Wed, 06 Jul 2022 11:21:28 GMT

Are you thinking about retiring and are wondering where to go when you do? Many people retire and stay right in the state where they have lived for years. Others look for places where they can enjoy a quiet life in their twilight years, looking for different scenery, a change of pace, new activities, and new friends.

Many places come to mind like Florida, Tennessee, Arizona, and North Carolina all rank among the most popular places to retire, but not all of those places are for everyone.

We are here to convince you to consider a State that you may not have thought of. Montana can be a great place to lay down roots in the later years of life. The long summer days are known for their beautiful sunsets and scenery, fresh air, and open spaces.

Here are six reasons why you might want to retire in Montana. Also, learn more about how the elder law attorneys at Tanko Law can help you with your estate and end-of-life planning to make retirement even easier.

TAX-FRIENDLY RETIREMENT

One of the best reasons to retire in Montana is that it's one of the most tax-friendly states for retirees in the union. Not only does this state have an overall lower tax burden than the rest of the United States, but its income tax rates are also capped at 6.65 percent. Certain amounts of social security payments and pensions aren't taxed, and there is no sales tax in Montana at all.

For retirees looking to stay comfortable late into life, the value they get out of their dollar is important. In Montana, the cost of living is significantly cheaper than the US average, meaning that your dollar will go farther here.

BEAUTIFUL AND TRANQUIL SETTINGS

As we get older, we start to look for a life that moves to a better pace. We have spent most of our time moving as fast as possible for our working carrier.

There needs to be time to enjoy the sunlight in summer and the company of friends and family at the dinner table. There is no need to hustle any faster than you want to when you retire in Montana.

Montana is consistently rated as one of the most naturally beautiful states, featuring a long stretch of the Rocky Mountains and beautiful seasons.

If you're looking for a place to live your life in peace and harmony with gorgeous vistas, mountains, lakes, and a great community, Montana has some of the best retirement towns around. The most popular is Whitefish, with its upscale sensibilities and beautiful mountain and lakeside location. Other great retirement locations are Missoula, Helena, and Bozeman.

RECREATION AND ACTIVITIES

The natural setting of Montana offers a range of great recreation and activities to keep you healthy and active in your later years. There is no shortage of things to do with like-minded people your age, like hiking, birding, fishing, hunting, photography, golfing, and more. With a temperate climate, Montana is a state where there is always something to do.

If you want to get away to town or make a day trip out of visiting one of Montana's larger cities, there is always something to do inside too.

FOOD FRESH FOOD

Though it may not come to mind at first, but it is true. There is an abundant food culture centered around farm-fresh ingredients with many farms and wildlife, including fish and game, like elk and deer.

You'll never be short fresh fruits or vegetables for your cooking. When you eat at local restaurants, you'll get to experience the freshest ingredients.

Around August through September, locals like to pick the wild huckleberries that grow in parts of our great state.

As we age, it becomes increasingly important that we eat well and maintain regular exercise. The locally-sourced food we are known for in Montana can help you eat healthily.

GREAT HEALTHCARE

Doctors are like attorneys; you need someone you trust to ensure that you are given the best care you can get. In retirement, we have to plan around our health needs and the eventual decline of our health. Having access to the best medical care available is non-negotiable.

In 2014, CNN Money and Bankrate ranked Montana among the best states to retire, citing plenty of room to move about, large lakes, and one of the top hospitals in the nation in Kalispell Regional Medical Center.

Healthcare is a vital part of the equation for those looking for a great place to retire. Planning for what may happen later in life is critical, and having access to the medical care you need right now can make all the difference.

The question isn't why you should move here, but why you wouldn't move somewhere boasting such a highly-ranked hospital.

MONTANA ELDER LAW ATTORNEY

You wouldn't settle for less than the best from your doctors, don't settle for less with your law attorney.

One of the most important parts of retirement is planning for your future and the generations after you. This means getting your affairs in order with the help of an attorney you trust.

When it comes time to plan your will, manage your estate, and determine who will make vital decisions for you in terms of finances and healthcare, should you become unable to do so, you'll want the services of an experienced Montana elder law attorney .

An elder law lawyer isn't just someone to sign off on your will; they're someone who knows how to make tough decisions and can be a trusted advisor and confidante on these issues.

Many planning solutions are available that can help uncomplicate the complicated issue of end-of-life planning. Not only will a well-made estate plan put your mind at ease, but it will also help make the lives of your family members much easier too.

If you're thinking about retiring in Montana and would like help with your estate planning, you can trust Tanko Law to help. Contact us today to get started or for answers to any questions you might have today!

Copy of 6 Reasons to Retire in Montana

Mon, 14 Mar 2022 11:24:40 GMT

As a caring parent, you have probably made an estate plan and allocated your assets to your children. However, you might be a bit uncertain whether your son or daughter married the right person and if what you leave them with will someday be given to their ex-spouse. Each state in the US is different, but when assets are inherited by your child, the assets typically do not become part of the marital estate. It is important to understand how properties are divided during a divorce in order to know how to protect your child’s inheritance in the event of a divorce. Here is everything you need to know about your estate plan and whether it can protect your children in the event of a divorce.

Estate Plan and Divorce

It is commonly stated that inherited assets are separate property, and they are not subject to a divorce . However, while this is true on the surface, it can easily become slippery down the road. Once your child inherits the property, it will depend on what they do with the property. Mostly, your child will mix the money and other assets with marital assets. They might use the money to pay for mortgages or decide to use marital assets to renovate inherited properties. When the spouse is filing for divorce, they will claim that inherited assets have been converted to marital assets because marital funds were used for renovations or other purposes.

If your child receives an inheritance and combines it with assets they own jointly with their spouse, the inheritance may become subject to marital property division in the event of a divorce. You need to structure your estate plan in a way that funds are held for your children’s use and benefit, and continue to be separate and protected even in the event of a divorce. The most effective way of protecting such assets is to keep the inheritance in a trust account, which further protects inherited wealth from a potential future divorce.

Options for Protecting your Children’s Inheritance in the Event of a Divorce

Trusts are usually an effective option for protecting your children’s inheritance in the event of a divorce. Trusts also come with other benefits besides protection. There are revocable trusts as well as irrevocable trusts, and they all have their own advantages depending on your key needs. A revocable trust can be revoked, making it more flexible. The grantor (you’re the grantor) usually controls the assets in the trust, sets primary terms of distributions, and can easily appoint an independent successor trustee to manage the trust after their death. In this case, assets are assumed to be owned by the trust and those intended for your children can never become marital property. Essentially, these assets are not subject to division in the event of a divorce.

For irrevocable trusts, they cannot be revoked as in the case of revocable. Since this trust cannot be revoked, you cannot reclaim asset ownership as the grantor. In this case, the estate is not only protected from future creditors and potential divorce, but also from you. Irrevocable trusts entail lack of potential flexibility, depending on the design of the trust. If you change your mind and decide to make some changes to your inheritance allocation, you will be barred from doing this. This makes it important to consult with professional and experienced estate planning and trust attorneys, such as those at Tanko Law .

Benefits of Estate Planning

Here are the benefits of estate planning and why you should consider it:

1. Protect Your Children

If you don’t have an estate plan, your children end up with less and it takes them longer to access it. This causes your children problems and they may not have enough to pay for their livelihood in case of a demise. An estate plan protects your children and ensures that they have their rightful share at the right time. Even for younger children, estate planning ensures that they receive the care you would want them to have.

2. Reduce your Estate Taxes

Estate planning is all about protecting your children and family, which also means protecting them from the Internal Revenue Service (IRS). Estate planning makes it possible to transfer assets to your children while creating the smallest possible tax burden for them. Without an estate plan, the amount of taxes your children will be required to pay can be quite huge.

3. Calculate Sustainability

You might have a clear idea of what you would like to leave for your children, but how does that correlate to your income? Estate planning helps you to reconcile your income with legacy plans. It also creates an opportunity for you to assess how sustainable your income is over a specific period. You can easily estimate how much you intend to leave your children with when you already know your approximate expenditure.

4. Make Retirement Easier

Estate planning is not just for your family, but it can also benefit you while you’re alive. In particular, estate planning can help you make sure that you’re eligible for government benefits, such as Medicare. By sorting out your financial life, you’re more likely to take advantage of government programs available to you during your retirement. This will also give you peace of mind, knowing that your family and children are taken care of in any circumstance.

Why Choose Tanko Law?

Tanko Law has been providing the best in Montana probate services, estate planning, wills and trusts and elder law since he opened his office doors in 1995. Tanko Law Office was founded with only one mission, providing the best legal advice in a caring manner and with outstanding customer service.

Learning how to protect your assets , get a loved one’s estate through probate, or otherwise ensuring that your loved ones are cared for after a loss can be complex and difficult. Tanko Law Office will walk you through every step of the process and ensure that every legal need you have is covered. Contact us today to learn more and get started with your estate planning.

Nine Estate Planning Trends for 2022

Thu, 10 Feb 2022 11:36:23 GMT

Estate planning is the preparation that serves to manage or dispose of an estate in the event of incapacitation or death. Planning for your estate is vital since it determines what happens to your asset after your death or incapacitation. The plan will guarantee ease in passing on your property to loved ones.

An estate plan is critical for anyone who owns an asset, irrespective of age. To create an estate plan, you require a few documents. The documents include a last will, living will, letter of instructions, and a life insurance policy. Also, you need a power of attorney to allow you to name someone to make decisions on your behalf.

Estate planning has been changing over the years. There are emerging trends in estate planning today. Keep reading to find out the nine estate planning trends for 2022.

Qualified Personal Residence Trust

A qualified personal residence trust is an irrevocable trust created to transfer the grantor’s residence outside of the grantor’s estate. The estate is transferred at a low gift tax. The grantor receives a retained income period allowing them to continue living in the house. At the end of the retained income period, the grantor pays rent to their beneficiary if they continue living in the home.

Qualified personal residence trust helps hedge against reduction tax exemptions. With the residence trust, you will not have to pay gift taxes if the value of your home is significant. Besides, it also hedges against appreciation.

Recapitalizing Using Non-Voting Common Stock

Recapitalization involves changing a company’s capital structure. If you have a closely held company, you can recapitalize to help in estate planning. Recapitalization allows senior family members to transfer business interests to other family members. Recapitalization helps avoid estate taxes after death.

The grantor may not be ready to take up control of a company. One feasible solution is to issue non-voting common stock. Non-voting common stock does not give the beneficiary a say in the business until an appropriate time.

Grantor Retained Annuity Trust (GRAT)

A grantor retained annuity trust (GRANT) is an irrevocable trust that reduces taxes on large financial gifts to beneficiaries. The retained annuity trust is established for a specific number of years. The gift value is determined by the creator when creating trust.

After the assets are transferred into the trust, the creator begins to make annuity payments yearly. The property locked in the annuity trust earns an annual income. When the annuity trust expires, the beneficiary receives the assets free of tax. GRANT is suitable for wealthy individuals who want to minimize tax liabilities.

Family Limited Partnership

Family limited partnerships allow a grantor to give lifetime gifts without relinquishing control of the business. Family partnerships are created to allow the younger generation to participate in the administration of the family business. The beneficiaries benefit from any interest, profit, or dividends generated by the family limited partnership.

Giving lifetime gifts through family partnerships allows for a reduced gift tax. In addition, future returns are excluded from estate taxes. Individuals can also give interest-tax-free gifts to other individuals up to the annual gift tax exclusion.

Generation-Skipping Trust (GST)

Generation-skipping trust (GST) passes down the grantor’s estate to their grandchildren. GST skips the grantor’s children and passes over assets in the trust to the grantor’s grandchildren. GST is also used to pass over assets to individuals below 37.5 years. By this, it skips one generation to the next.

The owner’s children are not liable for taxes due from the estate. This is because they are skipped by the opportunity to own the assets. However, the grantor’s children can still benefit from the assets without taking the title of the assets. If the amount transferred in GST exceeds $ 11.7 million (in 20121), the trust becomes liable to taxes. This threshold amount is adjusted annually.

Buy/Sell Agreements

Buy/sell agreements should exist in the family business to regulate the transfer of interests. The agreements minimize uncertainties when funds are inadequate for passing business interests to beneficiaries. The agreement is in force during and after the life of the owner.

The agreement also gives mechanisms for purchasing a share of a deceased owner from other businesses. The agreement provides terms for reaching a fair price for the shares. This gives assurance to the owners that upon their death their beneficiaries will get their shares.

Dynasty Trust

Dynasty trusts are long-term trusts designed to pass wealth to many generations. Assets in the trust do not incur gift tax or estate tax. The distinctive characteristic of a dynasty trust is that it can last for a very long time.

The dynasty trust allows grantors to leave assets for future generations. Dynasty trust is irrevocable, and its terms cannot be changed once funded. Currently, an individual can pay up to $11.58 million into a dynasty trust.

Grandchildren’s Trusts

Grandchildren’s trusts are created by guarantors for the benefit of their grandchildren. Most grantors create grandchildren’s trust for specific purposes, such as education. The trust not only benefits the children, but also helps the grantor reduce estate tax. However, the generation-skipping tax is applied to grandchildren’s trust.

The generation-skipping tax and gift tax have annual exclusions. The annual exclusions amount is reviewed yearly. The maximum amount you can transfer GST tax-free is $ 1 million per lifetime.

Charitable Remainder Trust (CRT)

A charitable remainder trust is an irrevocable trust that gifts the beneficiary cash or property. The owner receives income for a term or life. Upon expiry of the term or death of the owner, the named charity receives a stream of income from the remaining assets.

The owner receives an income tax deduction if the trust is funded based on the face value of the assets. Besides, CRT liquidates appreciated stock with no capital gain tax. It is advisable to consult an estate planning attorney to help you choose a trust that provides your expected results.

Let Us Support You

Are you a resident in the state of Montana looking for an estate attorney? Look no further. Ensure you contact Tanko Law today to get legal advice on how to plan your estate. Tanko Law Firm has been providing the best probate services, estate planning, wills and trusts, and elder law since 1995.

Navigating Through the Complicated Montana Notary Laws

Tue, 28 Dec 2021 11:45:04 GMT

COVID has led to a shift in many aspects of life. Part of that shift is increased awareness of how life can be fragile. That's why there's an increased need to put things in order and write and revise documents related to life's sunset, such as wills and trusts .

Sure, maintaining an updated will or trust is often enough. But you may want to self-prove it to speed up the probate process .

That's where notarization comes in.

Notarization is where a notary public verifies that a document before them has the authentic signature of the signer. Notaries are government agents that witness the signature's authenticity.

Montana doesn't require you to notarize your will or trust for it to be legal. But the notarized will or trust can be acceptable in a court of law without the lengthy process of contacting all the witnesses that signed it.

The Montana Notary Laws provides several notarization guidelines . Read on:

1. Appear Before the Notary Personally

The law requires the signer to the will to appear before the notary in person during the notarization process. According to Montana law, personal appearance is where you present yourself physically or, in unavoidable circumstances, through two-way, real-time audio and video communication (remote notarization).

2. Submit Your Document

A notary doesn't have to read the will or trust to verify or validate its content. However, the notary needs to glance through it to help them:

Be sure you understand what you're signing
Ascertain the type of notarial act needed
Be sure that you're the right person or representative

3. Identification of the Signer

The notary will verify that you're indeed who you claim to be. Under Montana notary law, a notary in Montana can verify your identity through:

Personal Knowledge

They have known you for a considerable period and wouldn't mistake you for another person- would identify you easily anytime, anywhere. You won't have to produce any proof of identity. In Montana, a notary can notarize your spouse or relative's signature provided that the notary isn't a direct beneficiary or mentioned in the document.

Satisfactory Evidence

Here, credible witnesses or documentary proof will save the day:

Documentary proof

If the notary doesn't know you personally, they'll request a signed and pictured government-issued ID, such as:

State ID
Driver's license
Passport
Student ID
Military ID

Some forms of identification don't pass as primary identifiers. They include non-pictured government-issued ID (Medicare and Social Security cards), credit cards, and bank cards. Therefore, you may have to produce more than one identification document for conclusive identification.

Be sure the ID document isn't tampered with or altered. Also, the description and picture therein should match you, the signer.

Credible Witness

A credible witness can be used to identify you for notarial purposes. They must be:

Known to you personally.
Known to notary personally or identified based on relevant documentary proof.
Physically present (not virtually or through audio) together with the signer before the notary during the notarization.
An unbiased party with no benefit from or interest in the will.

4. Determination of The Signer's Willingness and Competence

The notary officer must ensure that the signer is willing and competent to sign the will. They will use "reasonable care" as a standard for determining your competence and willingness.

The notary can infer willingness from your request for notarization. However, some situations might require the officer to exercise extra care. For instance, when you are under the influence of a substance or duress. The notary should request other people to vacate the room and then talk with you about the document to be notarized.

The notary may not notarize the document if they feel that the signer is unwilling or incompetent.

5. Completion of Notarial Certificate

The notarial certificate is completed contemporaneously with the notarial act's performance. It includes the following information:

The venue: The county and state where the notarization was done.
The statement of particulars: A declaration that describes the type of notarial act, date, and signer.
Notary's official signature and the Notarial Seal: The notary will endorse the certificate with their wet or electronic signature. Their official name must match their commissioned name.

Notary Acts

According to Montana Notary Laws, a notary public can perform five notarial acts:

1. Taking acknowledgments

While the signer needs to be physically present before the notary, the officer doesn't need to witness the signing act. The notary should review the document, identify the signer, and verify the signer's signature.

2. Witnessing signatures

Here, the notary must be present and watch the signer signing the document. Even if the signer signed the document, they'll do it again near the already existing signature (without crossing out anything).

3. Verification upon oath or affirmation (Jurat)

The officer performing the jurat must witness the signer and administer an oath. If the information in the document is found to be false, the signer might face a penalty of perjury.

4. Administering oaths

While the notary doesn't have full authority to administer oaths as a separate act, a jurat will mostly need an oath.

5. Certifying copies

A Montana Notary Public may need to attest or certify that a copy of a record or document is an accurate and true transcription or reproduction of the copied document. They don't need to ask for the presence of any particular person since they are not verifying a signature. The certification may be made by copies or document custodian.

The law prohibits Montana notaries from making and certifying public documents' copies:

Birth certificates
Death certificates
Marriage licenses
Divorce decrees
Court orders
Adoption records
School transcripts
FBI fingerprint cards
Motor vehicle titles
Any recorded document

The notaries may copy "private" documents like:

Driver's licenses
Student ID cards
Employee ID cards
Passports
Diploma
Certificates or awards
Professional licenses
Invoices or bills
Photographs

Wrap Up

Notarization of your will, trust, or other sunset-related documents can save you a lot of headaches down the road. So grab your document and contact a notary public officer.

And if you're looking for a professional law firm that provides wills, trusts, probate , and estate planning services , consider Tanko Law Firm!

What Are Your Rights If You’re Left Out of Your Spouse’s Will?

Tue, 19 Oct 2021 08:55:53 GMT

The death of a spouse ranks as the most stressful life event a person can experience. As a surviving spouse, it is natural to be overwhelmed with grief, sadness, and despair. But imagine coping with the loss of your husband or wife and then discovering that they left you completely out of their will. Suddenly, you face the prospect of living alone without your spouse and without the assets you thought you would receive.

If you find yourself facing this grim set of circumstances, it is important to remain calm and seek the guidance of a trusted estate planning lawyer in Montana. By following these three steps, you can make the best of an unpleasant situation:

Step One : Contact a Montana wills lawyer right away. Do not delay.

Step Two : Learn about your rights as a surviving spouse. Your attorney will outline the assets to which you are entitled.

Step Three : File a right of election with the court. Your lawyer can guide you through this process to ensure you are compensated.

Do you have rights as a surviving spouse?

Yes. If you are left out of your spouse’s will, you have specific rights outlined by the state of Montana. The right to a portion of your spouse’s estate is called an “Elective Share” and is outlined in Montana Code 72-2-232:

“The surviving spouse of a decedent who dies domiciled in this state has a right of election, under the limitations and conditions stated in this part, to take an elective-share amount equal to 50% of the value of the marital-property portion of the augmented estate.”

– Montana Code Annotated 2021, 72-2-232

Could you possibly receive your spouse’s entire estate?

No. If your spouse has a legally executed will that omits you while designating assets to other living relatives and beneficiaries, then you are not eligible to receive the entire estate. The only circumstance under which a surviving spouse may inherit 100% of an estate is if the spouse fails to prepare a will altogether. In this case, you may receive 100% of the estate if your deceased spouse has no other living parents or descendants.

What portion of your spouse’s estate are you entitled to receive?

The answer depends on several factors, including your state of residence and the number of years you were married. In Montana, you can request an elective share that is equal to 50 percent of the augmented estate value. To determine the augmented estate value, you add the following together:

Your deceased spouse’s net probate estate
The sum of any nonprobate transfers from your deceased spouse to other people or creditors
Any nonprobate transfers made to you as a surviving spouse
Any property or nonprobate transfers you have made to others

After calculating the sum of these four figures, you multiply the result by a percentage that reflects the length of time you were married. In general, the share to which you are entitled increases with the total length of your marriage. For instance, a spouse who was married for two years would receive a smaller share than a spouse who was married for 10 years.

Why is acting quickly so important in Montana?

It is important to act swiftly because eligible petitioners have a limited timeframe within which they may file their election. If you let a year pass by before you decide to file your petition, your request will likely not be considered. Ideally, it is wise to speak with an attorney as soon as you discover you were left out of your spouse’s will.

“The election must be made by filing in the court and mailing or delivering to the personal representative, if any, a petition for the elective share within 9 months after the date of the decedent’s death or within 6 months after the probate of the decedent’s will, whichever limitation later expires.” –

– Montana Code Annotated 2021, 72-2-241

Can you withdraw your request for an elective share?

Yes. You have the right as a surviving spouse to withdraw your petition for an elective share of your spouse’s estate. While this is not common, you have the right to withdraw your demand at any point in time prior to the court issues a final determination.

Are there any other rights that I have as a surviving spouse?

Yes. As a surviving spouse in Montana, you likely have rights to a homestead allowance, a family allowance, and possible property exemptions. A skilled estate lawyer can review your circumstances in detail to confirm whether you are eligible for these allowances and help you receive the maximum amount to which you are entitled.

What step should you take today to protect your future?

Clearly, there are many factors to consider if your spouse passes away without referencing you in their will. Fortunately, you are not powerless and have specific rights as a surviving spouse in Montana. The key is to take action right away – preferably before your spouse passes away.

The single best thing you can do to protect your future is to seek the guidance of an experienced estate planning attorney today . Tragedy can strike at anytime and it is up to you to ensure you are prepared. A Montana wills attorney will guide you through the simple steps to ensure you are protected in the event of your spouse’s passing. If you need a dependable wills lawyer in Kalispell , here are some specific ways an estate lawyer can help you protect your future:

Prepare a will for you if you do not currently have one
Update your existing will if you have experienced a major life change
Help you establish a trust to ensure your assets are distributed according to your wishes
Make sure your will is comprehensive and inclusive of all your assets
Ensure your will is valid according to Montana law

We encourage you to contact us today to schedule a consultation with one of our estate planning lawyers. We look forward to serving as your trusted legal representative!

6 Frequently Asked Questions About Retirement Accounts

Mon, 04 Oct 2021 09:03:58 GMT

As you manage your end-of-life plans, you may have a number of critical questions about your retirement accounts. Does a 401K have to go through probate? What about other types of retirement accounts? What happens to the money in those accounts after your death? Take a look at some of the most frequently asked questions related to retirement accounts and estate planning.

1. Does a 401K have to go through probate?

When you set up your 401K, you probably had to designate beneficiaries: people who would receive those funds if something happened to you. Ideally, you should designate both primary and alternate beneficiaries in case something happens. For example, if you designate your spouse as the primary beneficiary, you might want to designate your children as alternate beneficiaries in cases something happens to both you and your spouse at the same time, or something happens to your spouse before the date of your death.

If you have set up those accounts properly, with clearly-designated beneficiaries, your 401K account will not have to go through probate.

2. If I named one person as the beneficiary on my 401K account, but changed my mind and want to designate someone else while writing my will, will my will take precedence?

Your will cannot change the directives already named on your 401K account. If you have a beneficiary listed on that account, but change your mind–perhaps you divorced the person you were married to when you set up that account, for example, and do not have any legal arrangement as part of the divorce decree that designates that you must leave part of that account to your former spouse–you will need to change your 401K beneficiary directly, rather than relying on your will to take care of it for you. The beneficiary named directly on your 401K will override any directives that you set out in your will, even if the will is the more recent document.

3. What happens if I did not name a beneficiary on my 401K or retirement account?

If you did not name a beneficiary on your retirement account, your 401K will be distributed to your heirs, based on the terms of your will. The funds in that account will become part of the estate and can be taxed accordingly. However, the funds from that account will not be used to pay your final bills before passing to your heirs, unlike other funds in the estate at the time of your death.

4. Are other retirement accounts handled the same way as a 401K? Do they have to pass through probate?

Most retirement accounts , regardless of the type of account you opened, will have you designate beneficiaries. That includes IRAs, 403Bs, and other types of retirement accounts. Those funds are intended to be set aside for a long time: until your retirement, which will typically be decades after you open the initial account. Once you set up the beneficiaries on that account, your beneficiaries can use those designations to help bypass probate on those funds. As a result, they can get those funds in their hands sooner–which can offer immense benefits in the event of your untimely death, including providing your heirs with the money they need to take care of immediate expenses.

5. What happens to my retirement accounts when I die?

When someone who holds a retirement account dies, the financial institution that hosts the accounts will pass the assets to the named beneficiaries in the account. They will pass directly to the beneficiaries, without going through probate or becoming a direct part of the estate. However, the person that inherits those funds may, in some cases, have to pay taxes on them. It’s important to carefully consider what taxes your beneficiary may have to pay and how that may impact them ahead of time.

If you have not named a beneficiary, or you name your estate as the beneficiary of your retirement accounts, the funds will pass into the estate, where they will be used to settle your final debts and handle many of your last expenses.

6. What should I do if I inherit a retirement account?

When someone you love passes away, you may wonder about your next steps and what to do with the funds you inherit. If you inherit a 401K or other retirement account, you may have a couple of options. First, you can take a lump sum distribution on the account, which may require you to pay any associated taxes on that account immediately. You may also choose to spread that withdrawal over several years (10 years, if the owner of the account dies after 2020; five years, if the owner of the account died before that date) so that you can alleviate some of the tax burden or spread out spending reasonably. You may also have the right to spread withdrawals out over your lifetime, depending on your needs and the amount of money in your account.

Finally, if you are the spouse of the deceased, 401K benefits–and those in other retirement accounts–are assumed to be community property unless they have been assigned otherwise. Most states, in fact, will require you to sign a waiver in order for your spouse to designate another beneficiary for his retirement accounts. If your spouse dies, you may choose to roll over the funds from that 401K into your own retirement account. Once it’s there, the government will treat those funds as though they have always been yours, so you won’t have to pay any taxes on the money until you withdraw it after you retire.

Managing your retirement accounts is just one important part of estate planning . There are many factors that may go into the distribution of your final assets and how you want to handle those needs. Do you have more questions about estate planning or how to ensure that your beneficiaries receive the maximum benefit from their inheritance? Contact us today for more information.

What Effect Does Marriage and Divorce Have on Your Will?

Mon, 06 Sep 2021 09:09:40 GMT

Creating a will can be a dense and complicated experience for many of us, but the peace of mind that comes from the security you have built for your family will ease tensions you may not even realize that you have. Did you know that there are circumstances, though, that may invalidate or change your will after it's been created and accepted as legitimate?

The subject of marriage comes up often. For example, a person who makes the time to work with an attorney to create a will in their twenties or thirties cannot know what life changes could be coming their way in their forties, fifties, and so on.

Will you get divorced? Married? Remarried? Will you adopt a child? Will you lose or gain assets that affect their inheritance?

If you have changed spouses, or are thinking about getting divorced, married, or remarried, there is information that directly concerns the legitimacy of your will and how your assets will be distributed after your death.

How Does Marriage Affect an Existing Will?

Your will should reflect your life as it evolves and changes. Marrying someone, or remarrying, after you have created your will can immediately alter that will because your spouse will legally become your main heir, unless there is already specific language or provisions made in the initial will for the inclusion or exclusion of a new spouse.

The language of your document may sound vague, such as referring to 'any future spouse' instead of adding a specific name, but such stipulations can be easily added to a will in order to protect yourself and your family from future problems or confusion. We don't want our families and our legal matters to be in any disarray after our deaths, which is the entire point of creating a will in the first place.

Montana's equitable distribution laws state that if a person dies without updating or creating a new will, their entire estate may be inherited by their spouse and not the inheritors named by you in your directive. It would be up to the living, inheriting partner to then distribute assets to your heirs as THEY see fit, not as how you planned. Even the most well-meaning spouse can make mistakes.

This can cause many problems within families and the safety and security that you want to leave behind for your children, grandchildren, or various charities can be disrupted and even canceled. The future of your assets, and your family, may be left up to someone unaware, or even uncaring, of your wishes. Those whom you wished to provide for may be out of luck if you don't update your will to reflect your life changes.

If you pass away without updating your directive, your wishes can be ignored or changed in favor of our state inheritance laws.

What if a Person In Montana Dies Without a Will?

State inheritance laws can give the spouse a portion of the estate , while reserving the rest of your assets to any of your natural children. The state may also release the entirety of your estate to your spouse, instead of your children and/or other heirs. It all depends on the construction of your family.

The distribution of your assets when there isn't a directive will be based upon how many heirs that you leave behind, meaning your spouse and children. If you have a living spouse as well as children, your spouse will inherit everything. But if this spouse has children from another relationship/marriage, then the spouse will inherit $150,000 and then half of whatever is remaining. The rest goes directly to your children.

For the record, adopted children, your children's half-siblings, and common-law partners are all legal heirs.

If you are the spouse with children from another relationship, or if you both have children from other relationships, the surviving spouse will receive $100,000 and then half of the remaining balance. Of course, the rest will go to your children.

How Are Step-Children Handled in a Will?

The rules can be tricky. For example, you created a will as a single person. You marry later on and gain step-children who you love as your own. If your will isn't re-created or updated around your new life, your step-child(ren) will not be able to legally inherit from you, even if it is what you wished. It must be written legally, fully reflecting your current circumstances and personal wishes.

Pretermission: How Does it Work?

If you have made the decision to specifically leave someone out of your will that would ordinarily inherit, referred to as pretermission , they may inherit anyway if that information is not in your will at your time of death. Your spouse, even if they are not mentioned in the will, will legally inherit everything due to their position as your partner, even if you didn't wish to leave them anything (which can happen if both parties have plentiful assets, for example).

How Does Divorce Affect a Will?

If you decide on divorce after your will has been created, anything that would have been left to the former spouse will be revoked as you have severed legal ties to that person. This does not affect the inheritance of your shared children. The will itself will not be revoked, the divorced party will simply be removed or ignored and your children will replace them in succession if a new spouse isn't acquired beforehand.

If a divorce occurs while the children are young, it may be best to name someone to control their inheritance until they are older. A trusted family member or attorney, such as the person you have chosen to organize your will, would be best, especially if your divorce was at all contentious.

Updating your marriage information as soon as you can allows your will to grow with you and evolve along with your changing life. A local Montana Will and Probate Attorney is your best bet for the future security of your family.

Contact us at Tanko Law to begin discussing the details of your will. Our team will protect your assets with expertly crafted and legally valid wills that represent you and your life, right now and years in the future.

Can You Put Your Pet in Your Will? Estate Planning for Pet Owners

Tue, 23 Mar 2021 09:30:18 GMT

Have you thought of what will become of your pet after your demise? If not, this is an excellent time to think about it. It’s essential to have a plan that quickly provides for your pet’s shelter, food, and care. Montana State University Extension points out some tools that pet owners can use to ensure their pets continue to receive good care.

In Montana, a pet refers to any domesticated animal that is maintained near or in the owner’s household. A pet is considered tangible property, just like cars or furniture. When the owner dies, a pet can be passed to a beneficiary as provided in the owner’s will or trust documents. A priority list of heirs may also inform the succession if a will or trust doesn’t exist.

The specific estate planning approach you use depends on your goals, financial resources, and pet’s needs. When you work with your attorney, you will create the best approach to ensure your pet continues to have a high-quality life.

Options for Estate Planning for Pets

You have various alternatives to choose from in planning for your pet’s life after you’re gone. The alternatives range from simple non-legal choices to complex arrangements. However, just like you would be willing to make legal arrangements for your property, the same should happen for your pet. Here are some options to consider.

Testamentary Gift

You can appoint a beneficiary in your will who will take over your pet’s ownership. This should be a trusted individual who will also receive a portion of your money to enable them to care for your pet. Consider putting up an Individual Retirement Account (IRA) at any bank with a minimal deposit.

Name your chosen beneficiary so that they will have access to the money for your pet’s upkeep after your demise. This is a simple solution that works well as long as the beneficiary doesn’t die before your pet.

Pet Trusts

Your other option is to create a trust fund for your pet. In this arrangement, a third party will hold the funds for your pet’s benefit. The terms of the trust may require you to appoint a ‘protector’ to enforce the pet fund’s fiduciary obligation. The protector will ensure the trustee honors the arrangements to oversee your pet. They will also ensure the funds are only used for your pet’s upkeep. Related expenses include:

Feeding and boarding
Grooming
Emergency vet care
Routine vet check-ups

With a pet trust, you can also name successive caretakers. This takes care of the situation where your preferred caretaker becomes incapacitated or is unwilling to take care of your pet.

A pet trust allows you to have the upper hand over your pet’s succession in your absence. The trust can remain in place until your pet’s demise or up to 21 years , whichever occurs first. Ensure your pet trust is drafted by a professional estate planning attorney for the life-ling protection of your pet.

Without a pet trust, whoever assumes care of your pet after your demise becomes the legal owner. The new owner can make decisions about your pet’s future, which you may disagree with. On the other hand, they may fail to make any formal arrangements, putting your pet’s life at risk.

Types of Pet Trusts

Your pets cannot be beneficiaries of a traditional legal trust because they can’t enforce the terms of the trust. Pet funds include:

Statutory pet trust entrusted to a third power to enforce the terms
Honorary trust set up for a specific purpose without a definite beneficiary
Traditional legal trust where your pet and the funds are the body of the trust. Your attorney will name a trustee of your pet as the beneficiary. You will name a protector who will manage the funds

Pet Foster Programs

Look around for pet foster programs within your area. An excellent place to check is your local Humane Society. A search is carried out for a suitable caregiver who will take over your pet’s stewardship after your demise.

The agreement allows you to provide your wishes concerning the care of your pet in your absence. The Human Society will take custody of the pet while searching for a caregiver to place the pet. The Society will also monitor the care and could take back the pet if the care provided is wanting.

Durable Power of Attorney for Pet Care

In this pet care arrangement, you can authorize someone else to seek medical care for your pet. You need to specify the extent to which the agent can act on your behalf. You can choose to make your Durable Power of Attorney “effective immediately” rather than “upon death or incapacitation.” You can add all the provisions for your pet in this document.

Letters of Instruction

A letter of instruction is an estate planning tool that works in conjunction with your trusts and will. It’s an informal device and is not legally enforceable, like wills and testaments. A letter of instruction allows you to leave instructions or express your wishes that don’t impact heavily on your property or assets. For example, you can use the device to say how you wish to be buried or where your beneficiaries can find important documents.

Letters of instructions don’t meet any legal requirements and are easy to change or update whenever needed. This factor makes them well-suited for leaving instructions for your pet’s care. You can use the letter to state who you want to care for your pet and the kind of care to give. However, don’t use letters of instructions to set aside pet care assets since they’re not enforceable by law.

Final Thoughts

Incorporating your pet’s care in your estate planning is a sure sign that you love and care about them. While it’s easy to overlook these arrangements, ensure that you don’t. Having a pet plan gives you peace of mind. You can rest easy knowing that your beloved animal will be in good care once you’re gone. If you don’t have an estate plan for your pets, consult an estate planning attorney to guide you in the right direction.

How To Prepare For Your First Estate Planning Consultation

Thu, 18 Feb 2021 09:41:24 GMT

When you’ve decided to plan your estate, the chances are that you don’t know what to expect in your first estate planning consultation. Understandably, you may feel nervous because estate planning also means coming to terms with your mortality. However, acknowledging that it’s time to plan your estate is the right decision, no matter how old you are. An estate plan ensures that you protect your property and beneficiaries when you’re gone.

At Tanko Law, we’ve found that we utilize your time effectively when you know what to bring to the first consultation. Here is a checklist of how to prepare for your first estate planning meeting.

Fill Out The Intake Questionnaire

When you first consult your estate attorney at Tanko Law, they may issue a questionnaire. The purpose of the document is to collect details about your family and financial situation. All the information you provide is confidential, which means you don’t have to worry about safety.

You must provide all the details in the questionnaire to save time during the first meeting and help the estate attorney prepare for you. While there are laws governing estate planning in Montana, there is no one-size-fits-all approach. Each plan may vary depending on family circumstances such as estranged family members, prenuptial agreements, children, and divorces.

In addition, questionnaires before the first meeting ensure that nothing is missed. It’s easy to forget crucial details during the session. Remember that your estate planning attorney will use the information you provide to prepare the right plan for you. Missing or excluding information only lengthens and complicates the process.

Carry All the Documents

Gather all financial and family paperwork to make the most of your first estate planning consultation—some of the documents you should bring or make copies of include.

Grant Deeds to Real Estate

A grant deed is a legal document that transfers property from a grantor to the grantee. Your attorney needs grant deeds because they show who holds the title or ownership of real property. With the right title, the attorney can transfer the property to a trust if it’s your chosen estate planning method. Note that the details in your deed must match those in the deed before yours.

Financial Statements

You need to bring updated monthly statements about your bank and investments. These include documents about:

Savings
Checking account
Money market funds
Stocks and bonds
Retirement accounts
Taxes
Debts: loans, mortgage, credit card debt

The statements should show who owns the accounts, the account numbers, and balances. Your attorney uses these documents to separate the assets into different categories for purposes of inheritance.

For instance, community property is equally owned by each spouse and is acquired during the marriage. In contrast, separate property belongs to each individual because it’s assets that each spouse has before the marriage. There are also assets such as qualified retirement accounts that may not be transferable to trusts and may only require a beneficiary change. When the attorney has a better understanding of what you own separately or jointly, they can advise you accordingly.

Business Agreements

If you own a business or are a partner in a company, your attorney needs to see your signed business agreement. In most cases, the business agreement stipulates the disposition of interests after your passing.

Patents, Trademarks, and Copyrights

Your intellectual property also matters. You can include it in your will and pass it to a chosen beneficiary or a trust.

Life Insurance and Policy Information

If you have a life insurance policy, the payout goes to the people listed as beneficiaries. Bringing your life insurance policy documents during estate planning helps you review the amounts and beneficiaries..

Estate Plan Documents

If you have written a will, created a trust, have the power of attorney or an advance healthcare directive, bring them. Your attorney will need to review each document, discuss the provisions with you, and amend them as required. In some cases, it may be crucial to destroy previous wills or supersede them to avoid confusion when it’s time to distribute your estate.

Divorce Documents and Prenuptial Agreements

Marriage and divorce affect your estate plans. It’s important to review all documents to ensure that you either list or delist spouses. Your attorney will also advise you on laws that affect the disinheritance of spouses.

Think About Your Estate Distribution Beforehand

Your lawyer may help you navigate the legal hurdles of estate planning, but they cannot define your desires. Take time to think about how you’d like to distribute your assets. Ask yourself questions such as:

Who would I want to inherit my property after my passing?
Who can I trust to make decisions about my health when I am incapacitated?
Who would I trust to take care of my children when I die?
What are all my assets?
Who do I trust to be an executor for my will?
Are there unique beneficiaries I would like to include?
How can I ensure the proper use and distribution of my estate when I die?

Never hesitate to ask your attorney questions. Your Tanko Law estate attorney has the knowledge and experience to respond to any of your queries. You can also prepare a list of questions for your lawyer. Feel free to ask for clarification in any matter.

Your attorney’s estate planning process. Should you fill in questionnaires, book an initial consultation or walk in, organize a video call, or chat on the website?
The purpose of any estate planning documents.
The tax implications of estate planning.
Your attorney’s experience and background in estate planning.
The cost of estate planning.
What type of will or trust is best for you.
How does your estate plan affect your spouse, children, and other beneficiaries?
Do you need to update or destroy previous wills?
How can you ensure a smooth inheritance process after your death?
How can you reduce disputes among your beneficiaries after your passing?

Tanko Law Is Here For You

Estate planning is a process that is personalized to meet each client’s needs. Our estate attorneys at Tanko Law look forward to serving you and providing the best estate plan for you and your beneficiaries. Feel free to contact us for your first estate planning consultation.

5 Things about Montana Wills You Wish You Knew Sooner

Tue, 26 Jan 2021 09:57:31 GMT

Preparing the appropriate documents to transfer the ownership of your assets to loved ones after your death is an emotional and critically important task. Your will is your statement of how you want your property distributed, to whom, and in what proportions, upon your death. The questions and answers below describe five things about will preparation that you may wish you knew sooner.

Why Hire an Attorney to Draft Your Will?

In Montana, any person over age 18 can make a will if your mind is rational and you are not under undue influence from another person. The will must be in writing; Montana law does not accept verbal or video wills. That does not mean, however, that you cannot have a video that shows you signing the will. Attorneys often use videos of the will signing to demonstrate the “of sound mind” and not “under undue influence” part of the law.

That begs the question: why hire an attorney to create your will? It is possible under Montana law to write your own will in your own handwriting. A handwritten will is called a holographic will. You must take care, however, that both the signature and the actual distribution provisions of the document are in your valid handwriting.

Experience has shown that holographic wills often result in problems for the court. Wills can be denied by the Probate Court if the provisions contain errors. Also, the Probate Court may not interpret the words used in holographic wills the way they were intended by the author. Even self-help computer programs may result in unintended consequences and legal perils. Experienced probate attorneys, on the other hand, undergo specialized training in the field of knowledge. They know the precise language to use to put your desired distributions into effect and to have them interpreted by the court as you intended.

What is Probate?

Probate is the legal process where the Probate Court Judge reviews the will to determine whether the will is valid and to whom the property/assets will descend. It is also the place where a person’s will is administered and it is the appropriate place for the administration of the estate of someone who dies intestate (without a will). If a person dies after having signed a valid will, then the Probate Court will appoint the executor named in the will to administer the estate.

Not all estates require probate proceedings, especially those with low asset value. Estates with high-value assets require probate proceedings.

If you die without a will, the Probate Court will distribute your property and assets in the order specified by Montana laws of intestacy to:

your spouse and/or children; or, if none,
your grandchildren or your parents.

The court will continue down the list of your relatives until it finds none by blood or marriage. At that point, the state takes your property in an action called escheat.

What Kinds of Provisions Must Be in a Will?

Montana’s laws regarding wills require that certain provisions appear in a valid will. For example,

The will must state that the testator is 18 or older and is of sound mind and not under undue influence.
If you are married at the time of your death, your will must make provision for your surviving spouse under Montana law. At a minimum, your spouse is entitled to a percentage of your estate based upon the length of the marriage. If you make no provision in your will for your surviving spouse and instead leave all your assets to your children, your surviving spouse will be entitled to elect the appropriate spousal percentage against the amounts you intended to distribute to your children.
You do not have to include bequests to your children in your will or leave a nominal dollar amount to prove you did not forget about them. It is a good practice, however, to recognize your children by name when creating the will to avoid a child contesting the provisions after your death.
If you have minor children, you must include a provision for guardianship of those offspring and conservatorship of any assets you bequeath to them. Alternatively, you may leave money and property to children in a trust until they are of age. The appropriate age for distribution under a trust is up to you. You may use the age of majority (age 18 in Montana) or some later age.
A valid will must be signed by two adult witnesses who are not beneficiaries (and not a spouse of a beneficiary) under the provisions of the will.
The law permits you to name a personal representative in your will to see that its terms carry out as you intend.

While Montana does not require a notary to certify the witnesses to a will, a notarized will may help speed probate proceedings along. A notarized will in Montana is known as a “self-proving will” which means that the court does not have to contact the witnesses before it can accept the will.

Taking Steps to Finalize a Will

The following steps will help you finalize your will:

Read the provisions carefully to make sure they distribute your property the way you want and to whom you want. Make sure you’ve included all your property in the listing.

Have an expert review your will for legal and tax implications, especially if you have questions regarding certain provisions.

Make sure you sign and date the will in front of two witnesses over age 18, of sound mind, who also sign and date the document.

If you want a self-proving will, have the signatures notarized.

Making Changes in Your Will.

You are allowed to make changes in your will but do it the right way. There are two ways:

Make a new will that supersedes the first one.
Create a formal addition to the will, called a codicil, that describes the change you want to make.

And, of course, you will need to sign and have witnesses for either of these paths.

To talk more about this, or anything else, please contact us . We look forward to helping you with all your legal questions.

You may enjoy the July 2020 article from Montana State University entitled “MSU Extension Suggests Montanans Consider Writing an Ethical Will During the Pandemic.”

What Is The Difference Between A Will And Living Trust?

Wed, 09 Dec 2020 10:05:06 GMT

Estate planning , especially before your demise, is a crucial element of wealth and estate management. Last wills and testaments and living trusts are both suitable methods of distributing your assets to your beneficiaries in a legal manner and according to your wishes. However, these methods differ in the mode of creation and execution. Read on as Tanko Law explains the difference between a will and a living trust.

What is a Will?

A will is a legal document that describes the deceased’s wishes (testator) as to how their property (estate) should be distributed among their beneficiaries. If you create a will, you are the testator. The testator appoints an executor to administer and dispose of the estate, as stated in the will.

What is a Living Trust?

A living trust or inter vivos is a legal document, which creates a special form of fund known as a trust. The estate or assets owner, also known as the grantor or settlor, transfers assets to the trust. Next, the grantor names a trustee responsible for managing assets for the grantor’s benefit and distributing the estate among beneficiaries after the grantor’s demise.

What is the Difference Between a Will and a Living Trust?

The major difference between wills and living trusts is that a will takes effect upon a testator’s death, while a living trust takes effect when the grantor is still alive. A living trust also offers better control and management of assets after your passing to give the beneficiaries a continuous cash flow.

Openness To Change: Living Will vs. Trust

If you’re creating a legal document that determines your property’s distribution, you probably want to know if you can change it. Fortunately, both wills and trusts offer an opportunity for change should you change your mind.

A living trust is known as a living revocable trust because the grantor can change the trust’s terms at any time or revoke its operations altogether. These changes may include removing or adding beneficiaries, changing who gets what, or modify how assets in the trust are managed. While the flexibility of a living revocable trust is great, it also means that property owners cannot enjoy the benefits of an irrevocable trust.

For example, if you have debts, your creditors can sue to liquidate assets to settle debts. Also, upon your death, the assets in the trust are subject to both state and federal taxes.

You can also update a will after significant events such as marriage, divorce, getting a child, or a beneficiary’s or executor’s death. However, it’s essential to know that you cannot write on the will after witnessing and signing. Typing or writing on it, or even making a mistake such as stapling it, invalidates the will. Instead, you can revoke the old will by writing a new will or making a codicil. It’s best to destroy the old will when you write a new one.

A codicil is an official testamentary document that revokes, alters, or supplements the existing will. It’s a cheaper alternative to creating a new will and helps you make minor adjustments without rewriting the entire will.

Requirements For Validity: Living Will vs. Trust

Both wills and living trusts need to fulfill legal requirements to remain valid in the eyes of the law. In Montana, the legal requirements for writing a will are:

The testator must be 18 and above.
The testator must be of sound mind. This means that you must be aware that you’re writing a will and understand your property and beneficiaries when creating and signing the will.
The will should be in writing and signed by the testator, signed by two witnesses, and name an executor.
If your will is handwritten (holographic will), you’re allowed not to have witnesses, but you should sign at the end.
While this isn’t mandatory, the will should be notarized to be self-proved. This means that no testimony from the witnesses is necessary when the will is presented in probate court. To notarize a will, witnesses should provide a self-proving affidavit to a notary public (officer of the court).

Whether you choose to create a living trust alone or with the assistance of an attorney, the trust should have the following:

The legal document for creating the trust, also known as a declaration of trust or trust agreement.
The name of the person creating the trust or the owner of the assets. This person is also called a grantor, settlor, or trustor.
The name of the trustee of the initial trustee who manages the trust. In this case, it’s the grantor.
The name of the successor trustee. This is the person who takes over the trust management after the grantor passes or becomes incapacitated.
The beneficiaries to receive assets.
The person to manage assets left to young beneficiaries.
The assets- the grantor, should transfer ownership of the assets to the trust using the required transfer documents.
After writing the document, you should sign it before a notary.

What About The Probate Process?

Under Montana law, the executor or administrator should file a will with the court within a reasonable time after the testator’s death. Filing the will begins a legal procedure known as probate , where the court supervises the distribution of the deceased’s estate.

A living revocable trust avoids the probate process , which accelerates the transfer of assets to beneficiaries and avoids costs associated with probate procedures. It’s also easier to disinherit anyone that challenges the trust and preserve the privacy of your estate after your passing.

What Property Can You Place Under a Will or Living Trust?

You can place the following under a will:

Cash accounts and savings
Business interests such as shares and partnerships
Valuable items such as antiques, artworks, furniture, and jewelry.
Pets

You can place the following under a living trust:

Real estate property
Securities such as mutual funds, bonds, and stocks
Company or partnership interests
Valuable jewelry, art, antiques, and other personal items
Cash and bank accounts

Do You Need an Attorney for a Will or Living Trust?

An attorney is not required to write a will in Montana. However, seeking legal advice from a will attorney can help you avoid ambiguity in your will, handle taxes, and navigate complex situations when children and guardians are involved.

You can also create a living trust without an attorney. To do this, purchase a legal boilerplate and fill in the necessary details.

Conclusion

Wills and living trusts are excellent methods of estate planning after your passing. Before choosing either, it’s best to weigh each legal document’s qualities and decide what suits you according to costs, the size of your estate, debts, and control. Consult a Tanko Law attorney today to select the right estate planning method for you.

5 Common Sources of Confusion with Wills for Recipients and Beneficiaries

Thu, 02 Jul 2020 10:09:46 GMT

Executing the wishes of a testator starts with reading a will and applying the bidding as listed. However, sometimes, it may be challenging to honor the wishes of a loved one if the terms are ambiguous. Any elements of uncertainty in a will are cause for agitation and confusion among beneficiaries. If you plan to write your will and ensure that your beneficiaries enjoy your inheritance, it’s wise to hire a qualified attorney to guide you through the process. It’s also wise to understand common sources of confusion and how you can avoid them when drafting your will.

1. Vague Recipients

Selecting beneficiaries is an essential component of any will. For clarity when listing the beneficiaries, it’s best to use specific names and titles to prevent future confusion. Words such as “nieces,” “nephews,” or “spouse” without specific names beside them are open to interpretation. While this problem may seem dismissable at first, it’s essential to consider the weight of unspecified titles. What happens if you get divorced after listing your spouse as the beneficiary? What happens if you have more than one person claims to be your niece?

After your passing, the beneficiaries go through the probate process, which takes time and also consumes money. If your will is unspecific, your loved ones waste even more time and money fighting over property. Specificity saves time and money when it’s time to redistribute your wealth. With specific names, your beneficiaries need only fill out a few forms and get their inheritance without lengthy court processes.

When naming your beneficiaries, think critically of how they can distribute the inheritance among themselves and how they’re likely to use it in the future. At Tanko Law, we guide you through the execution process to help you list your beneficiaries correctly and apply the right legal terms.

2. Undefined Items

If you own multiple assets and heirlooms, using unique identifiers and names is essential to avoid confusion. Imagine that you have several houses in Montana, which can be listed as your home. If you state that your “home” should be left to your spouse, there may be arguments as to which property defines your home. In this example, it’s essential to state the address and the contents of the home. Listing the contents is essential to prevent future arguments whether the contents on the home should be distributed among several beneficiaries. If you wish to leave an heirloom or a specific piece of jewelry, describe it, and list the specific beneficiary.

Sometimes, people list all personal property under one general name and state the recipient. This may work if you have few personal possessions, and there’s no cause for future conflict. It’s also common because most people don’t want to create a long list of items with their specific recipients. However, you can look into drafting a personal property memorandum with your attorney. In that way, while the majority of your personal property may go to family, friends, or charity, you’ll have tangible personal property preserved for precise recipients. Reach out to Tanko Law for further guidance on naming items in your will.

3. More Than One Will Version

Every will should be executed according to the law, but more problems arise when there is more than one version of your will. While it’s not unusual to update your will in time due to changes in assets, relationships, and laws, having several versions is confusing for your recipients.

One of the biggest challenges of having multiple wills is that your wishes may be ignored. Older wills drafted at a different part of your life may give your property to the wrong beneficiaries, or loop your recipients in unending court battles. The courts examine the documents to determine which will takes precedence. In most cases, the newest copy wins, but only if executed correctly. If one of the contestants to your will can prove undue influence, lack of capacity, or fraud, the courts may rule in favor of previous copies.

It’s essential to take measures that override all prior copies of your will and only recognize your last copy. A great measure to prevent several versions is to use one office to execute your will. The attorney ensures that all your wishes, including those you draft in writing, are included in the latest will.

4. Lack Of Valid Execution

A will requires several elements to be valid and executable. For example, the lack of a signature on a will is cause for questions. A testator needs to sign the will at the end to prevent any arguments about their intentions. Without a signature, anyone can argue that the testator did not draft the will.

The lack of witnesses and their official signatures also affects the validity of a will. When signing, a testator should have two witnesses to confirm that the will was indeed signed accordingly. The witnesses should also be available for recall once the will comes into effect for the proper distribution of a testator’s assets. It’s also crucial that the witnesses sign the will in the presence of the testator to prevent any claims that invalidate the will.

Other circumstances may also affect the validity of a will. For example, marriage can render a will void if it was drafted when the testator was single. However, a testator can include a clause to address the marriage and preserve the will as it was. It’s wise to consult an attorney to determine what happens in instances where there’s a new spouse or children that may have protections under the law.

5. Unfulfilled Expectations

Your beneficiaries have certain expectations of your will. Sometimes, recipients may contest a will if you award them less than they expected. Some claims may be valid or invalid, but consume time and cause further confusion. In some instances, it may be beneficial to manage expectations to prevent nasty surprises.

How To Draft Your Will In Montana

To write a suitable will and prevent any confusion and mistakes, consult a professional and qualified attorney. At Tanko Law, we understand your need for a well-crafted estate plan and will that ensure all your recipients honor your last wishes. Contact us today for more information on managing your estate in Montana.

6 Strategies to Ensure Your Beneficiaries Won’t Disregard Your Will

Wed, 17 Jun 2020 10:13:59 GMT

It’s easy to assume that none of your beneficiaries will contest your will. Unfortunately, this assumption isn’t true. The beneficiaries of your estate may contest your will, especially if they can establish the need for more provision. It’s essential to create a will that none of your beneficiaries will disregard. At Tanko Law, we help you create a will that will keep your last wishes safe long after you’re gone.

1. Write Your Will Early and Update Regularly

The best time to write your will is when you are in good health, and no one can contest your capacity. Your beneficiaries may challenge your testamentary capacity. As you grow older, it becomes easier for your beneficiaries to argue that you were not of “sound mind.” When you write the will early, you eliminate any doubts about your mental health. Also, you can sign your will when you understand all your assets and beneficiaries.

Beneficiaries may also contest your will if they believe that you signed it under duress. Undue influence is a suitable reason to disregard a will, mainly if you lived with a caretaker who controls everything you do. Also, after you write your will, remember to update it regularly. The circumstances in your life will change, and adapting your will ensures that your inheritance goes to the right beneficiaries. You can engage one of the attorneys at Tanko Law annually, to ensure that your will meets your wishes and has no room for a contest.

2. Include a No-Contest Clause

A no-contest clause, also known as a terrorem clause, is a provision which states that a person who files a lawsuit to contest your will shall receive nothing from your estate. No-contest clauses are beneficial if the beneficiary has something to lose. If the value of the inheritance is worthwhile, you can prevent contests. However, if a person is completely left out of your will, there is no incentive not to disregard your will.

Whether or not a no-contest clause is legally enforceable depends on the laws of the state. In Montana, a no-contest clause is enforceable unless there is a probable cause. If evidence exists that there is a probable cause, the no-contest clause is unenforceable. For instance, if the testator was under undue influence or if fraud was committed, the beneficiaries can disregard the will and contest it.

3. Execute Your Will Properly

Your beneficiaries may disregard your will if you fail to execute it properly. Any problems in the execution process are valid grounds for heirs to contest your will. First, ensure you sign the will when you have the capacity. This will prevent any contests concerning your mental wellness.

Also, remember to select two witnesses to oversee the signing. Ensure that you choose witnesses who are not beneficiaries of your estate. You should also choose witnesses that will be alive after you’re gone. This is because the courts may call them after your death. Remember to also sign the will in the presence of your attorney and witnesses.

It’s also useful to record your will execution process. This will provide concrete evidence that you were fully aware of your actions and had your witnesses in place.

4. Discuss with The Beneficiaries

It may be a good idea to discuss your estate with your beneficiaries to avoid unpleasant surprises. In most cases, family members and other close members contest wills because they feel disenfranchised. Talk to your heirs and help them understand your decision. You may also settle disputes and understand your beneficiaries better. It’s also wise to remember that while you can disinherit any of your beneficiaries, including your children, you cannot cut off your spouse. The courts will award a certain portion of your estate to your spouse. It’s, therefore, best to settle any disputes and assign the part of the estate you wish.

5. Create A Trust

Let’s say you have a large estate and aren’t sure how to divide the property and assets equally. Or maybe, you do not trust the beneficiaries to ensure the protection of your estate. What can you do? Try setting up a trust . When you set up a trust, your assets no longer belong to you. Instead, they belong to the trust and can be distributed by a trustee, who you can also appoint.

Revocable living trusts are a suitable option if you want to preserve the size of your estate. Unlike a will, a living trust prevents your details from being made public to anyone not privy to the trust. If you create the trust early in your life, you can revoke the trust, claim the assets, or divert certain assets to different beneficiaries. You also have the option of managing your trust and appointing a trustee later in life to avoid contests based on your mental capacity.

After your death, a revocable trust automatically changes into an irrevocable trust. Your successor trustee takes over and handles your estate to pay all debts and bills, and also distribute the estate to your beneficiaries. What’s more, is that you can include clauses that prevent overspending.

6. Separate Your Assets from Your Estate

Non-estate assets, such as property under joint tenancy, can ensure that the property passes on to the beneficiary you want them to pass to. For example, if you own property with your spouse or sibling, your share of the property will pass on to them under joint tenancy, without consulting your will.

Usually, assets with rights of survivorship, whether under joint tenancy or group or community ownership, cannot be included in a will. Contesting assets listed under joint tenancy is difficult for anyone looking for ways to disregard your will. Other assets such as joint bank accounts also pass on your share to the surviving joint bank account owner. You can use the right of survivorship to ensure that the property goes to the right beneficiary, and also prevent anyone from contesting your will since the property is not listed in the will.

Find Professional Help in Montana

Protecting your estate after you’re gone requires an expertly written will. With Tanko Law , you can receive information and assistance with your will, and also ensure that it’s enforceable after you are gone. Contact us today for professional guidance.

How to Prepare Your Legacy Wealth Plan with Montana Real Estate

Fri, 27 Mar 2020 10:24:43 GMT

You spend an entire life working hard and building an admirable estate. You may have managed your finances into a comfortable nest-egg, or invested well in the stock market. You may have an admirable collection of properties, vehicles, or small businesses. This is the kind of estate worth planning for, because it took so much planning to achieve.

When you pass your estate on to family and loved ones, of course you would want it handled sensibly. The best way to do that is estate planning. Once, a Will would have been enough to sort out your affairs sufficiently after death. But today, wills are so tied up in court and taxes that the best approach for your family is a Legacy Wealth Plan instead.

With the right legacy plan in place, you can be sure your assets and family matters will remain privately managed when your family needs those things most. Here’s how to make it happen with Montana Real Estate.

What is a Legacy Wealth Plan?

The best type of estate planning on the market is the Legacy Wealth Plan. This is a comprehensive package built for experienced professionals and savvy seniors who have a potentially long retirement ahead. A legacy wealth plan is, at it’s heart, a living trust. Unlike a will, it is easy to manage, and to update when life changes as you gow older. There’s a good chance you won’t need estate planning for another fifteen to twenty years, which is why it’s so important to work with a living estate planning structure.

A Legacy wealth plan is a complex way to build a living trust that contains all your assets and enforces conditions through which your assets are accessed after death. A legacy wealth plan starts with the legacy plan. You decide what you want your legacy to be in terms of both values and directed inheritance. Your goals and values are then built into the rules of the trust. The second half of the legacy wealthy plan is the living trust, a financial structure that can officially own your property for you.

Identify All Your Estate Assets

The beginning of building your own legacy wealth plan is to list all of your assets, including those that might be overlooked. Unlike a traditional estate plan, a legacy wealth clan includes non-financial assets like property, investments, and heirlooms with may only have their highest value only inside the family.

Consider all assets that are within your estate. Go over all of your accounts and, for things worth more than $500, consider having them appraised for final value as you organize your assets.

Financial Accounts
Start with financial accounts. All banking, savings, checking, retirement, and investment-savings accounts fall into this category. Consider accounts that may have been opened on your behalf. Hunt down old employers and determine what happened to your old retirement-fund payments to rope these accounts into your financial estate as well. Many people have abandoned IRAs in their name, left by previous employers with some local bank.
Investments
Your investments are another important asset. Whether you have an investment fund or directly play the market, your stocks, bonds, and other investments need to be catalogued and bequeathed through the trust just like all your other assets. Even if the values are, by definition, variable.
Properties
Every home, business, and vehicle you own falls under properties. So do your personal possessions, in many legal considerations. List all the properties you own and their last assessed value.
Businesses
Owning a business is one of the great ways to be financially and functionally independent. Some people make a career of opening or buying small, successful shops. The businesses you own, if any, will become a part of your estate plan so that they, too, will be passed on smoothly when you are no longer around to manage them.
Heirlooms
Don’t forget your personal possessions that mean something to family members. Heirlooms kept through the generation and keepsakes that saw important events with the family are worth listing in your estate plan, no matter how much or how little they are worth monetarily. These are items the family would want to see well-cared-for, as would you.
Personal Possessions
Then there are all the simple possessions of a daily life. The things that fill your house and that you life with every day are also aprt of your estate. They will need to be dispensed with when you are gone. You may leave them to your spouse, as part of your shared lifestyle, or even leave instructions on which charities would do the most good with your wardrobe or entertainment system.
Just remember to give your loved ones a chance to claim mementos personal items that held meaning to them.

Identify Your Legacy Goals

The other half of your legacy wealth plan is the legacy you want to leave. With a legacy wealth plan, you have the tools to shape the dispensation of your estate to provide for your family, encourage certain behaviors, and reinforce family values. You can make decisions that are more personal than bequeathing lump sums and physical items to specific people. The living trust you are creating can turn your estate into a pillar of the family when you are gone.

So sit down and think about the values, goals, and legacy you want to build into your legacy wealth plan.

Carrying on Family Values
If you want each of your grand-children to attend college, you can craft your legacy trust to provide them money and incentive to achieve this goal. You might set aside a fund for small gifts when a grandchild or great-grand-child ends a school year with As. Or you might continue a family tradition of wedding gifts . Or just create a practical emergency fund for family medical expenses.
Whatever your strongest family values, you can continue them with special dispensations, funds, and rules built into your legacy trust.
Meaningful Inheritance
You can also make inheritance mean something more to your surviving family. You might provide inheritance on meaningful life landmarks instead of automatically at death, or only provide inheritance if certain behavior standards are upheld. Provide the same decisions and loving support you would have, whether or not you are present.
Purpose-Dedicated Funds
You can also build funds and inhreitance designs specifically to further a purpose. Funds that only provide to inheritors who meet qualifications or reach for the goals you wanted your family to achieve. Money for college and graduation gifts are a classic. You can leave funds to help raise future generations or a surprise wedding fund for your latest-blooming child.

Organize and Bequeath

Once all of your assets and goals are listed, it’s time to decide “who gets what”. In a legacy wealth plan, this process can be far more personal and complex than with a simple will or even a traditional estate plan or living trust. Choose your successor trustee, the person who will inherit control of the trust after you. This is traditionally your spouse, or whoever you would normally name as your will’s executor.

Then go through the long and personal process of leaving specific sums or items to each member of your family.

Periodically Update Your Legacy Plan

Finally, be prepared to update your legacy wealth plan from time to time. Seniors are living much longer than they used to, and you may have this plan in place for decades before it ever becomes necessary. Because of this, your life is likely to take a few turns along the way, and your legacy may need to be updated.

Changes in Wealth and Assets
If you gain a significant amount of money, lose funds, or simply transform liquid capital into property, you’ll need to update your trust. The assets and numbers must remain accurate to aptly provide answers should you suddenly no longer be present.
New Members of the Family
New grandchildren, nieces and nephews, and even great-grand-children/nieces/nephews could be a part of your future. When this happens, no doubt you will think new thoughts about leaving your newest relatives something special from your legacy. New family members ar a wonderful reason for an update.
Update Accounts and Details
Finally, your accounts and other salient details may change. You may change who you’re banking with, or make significant changes to your stock market portfolio. No matter what the differences, they may be enough to update your legacy plan for accuracy.

At Tanko Law, we understand Montana Real Estate Law and Estate Law. You need a comprehensive plan to handle your estate when you are gone. Working with our skilled and dedicated team, you can build the perfect legacy wealth plan to manage your estate and uphold your family values for generations to come. Contact us today to find out more.

Planning Your Estate: What Assets are Subject to Probate?

Wed, 18 Sep 2019 10:30:50 GMT

If you are planning your estate, it is important to understand the probate process as well as what assets are subject to probate. The attorneys at Tanko Law are well versed in the estate laws of Montana and can help you organize your estate in the most efficient, cost-effective way possible. Contact us today for assistance and read on to learn more about probate laws and how they can affect your estate planning.

What is Probate?

Probate is the legal process used to distribute a deceased individual’s estate to heirs, designated beneficiaries, and any creditors. The details of the probate process will depend on whether the deceased individual has a valid will

Probate with a Will

If the deceased person has left a will, probate will generally follow this process:

The court will identify the personal representative named in the will. If no personal representative is named, the probate court will appoint one.
The validity of the will is proven in court based on the state requirements for validity.
The property is identified, inventoried, and appraised. Assets are generally frozen until the probate process is completed.
Any remaining debts and taxes are paid.
The remaining assets are distributed in accordance with the will.

Probate without a Will

If the deceased has not left a will, the probate process will differ in one important way: the probate court must determine how any assets without a designated beneficiary will be distributed. Each state has laws that govern who receives assets when there is no will; this is called intestate succession.

Approximately 70% of individuals in Montana make no plans for the distribution of their assets after death. This can leave their families heavily reliant on the probate court to make determinations about the distribution of assets. To understand how assets will be distributed without a will, you can walk through this interactive website .

Time and Costs

While the time and costs of probate can vary from state to state, most states have tried to reduce both. The typical cost of probate is $1,500 and takes, on average, six to nine months to complete. The time and costs associated with probate are likely to increase if the estate includes difficult-to-value assets or any disputes around asset distribution.

The longest the probate process can drag on in Montana is for two years from appointment of a personal representative, at which point the Supreme Court will notify the district judges. The personal representative and their attorney must appear to explain the delay, which can result in a mandatory closure date or penalties for the personal representative and attorney.

Will My Estate Be Subject to the Probate Process?

Many individuals prefer to structure their estate to avoid the probate process to the extent possible. Avoiding probate often relieves unnecessary stresses from the heirs of the deceased individual as they aren’t forced to endure the time and expense and they receive their designated assets more quickly.

In Montana, there are certain classes of assets which are not subject to probate and estates below a certain value which are not subject to probate. If your assets do not fall into these categories or your estate exceeds the value limit, you could also consider creating a living trust . We have discussed each of these below.

If your assets or estate do not fall into one of the categories below, you can anticipate that they will be subject to the probate process.

Non-Probate Assets

The following assets are not subject to probate under Montana law:

Property held in joint tenancy with right of survivorship;
Life insurance payable to a named beneficiary
Payable-on-death (POD) deposits at financial institutions;
Assets in a pension plan to a named beneficiary;
Individual retirement accounts to a designated beneficiary; and
Transfers-on-death (TOD) registrations of securities and securities accounts such as stocks and bonds

One important thing to note about many of the non-probate assets is that they require a designated beneficiary. If you have one of the noted assets but have not designated a beneficiary, it will still need to go through the probate process.

Small Estates

If the value of an estate is less than $50,000, the beneficiaries will have the option to skip probate. Under this process, an individual inheritor can collect assets through an affidavit process. An inheritor claiming property under this process must submit an affidavit to the holder of the property stating the following:

The value of the entire estate is less than $50,000;
At least 30-days has passed since the death of the property owner;
No application or petition for the appointment of a personal representative is pending or granted in any jurisdiction; and
The claimant is entitled to the property at hand.

There are two instances in which an individual may claim property if the estate is valued over $50,000:

If the value of claimed property is $5,000 or less, the department of revenue may refund the unclaimed property; and
A security such as a stock or band can be registered to the claimed inheritor if an appropriate affidavit is submitted.

While the affidavit process is faster than probate, it still requires legwork from the inheritors to ensure they receive their assets. There is also possible room for dispute if there isn’t a clear will designating how assets should be allocated.

Create a Living Trust

If you have assets that are not considered non-probate assets and your estate exceeds Montana’s $50,000 threshold for small estates, you may want to consider setting up a living trust . In Montana, almost every asset you own can be included in a living trust.

To establish a living trust, a legal professional must design a trust document for you which names a successor trustee to handle the trust upon your death. You will continue to control the trust while you are alive, but after your death the successor trustee will take control. The successor trustee can manage the assets, including distribution to beneficiaries, without involvement of a probate court.

Prioritize Estate Planning

There is certainly no time more saddening and stressful than dealing with the loss of a loved one. This time can be made increasingly stressful if family members also have to manage the deceased individual’s estate without clear guidance.

Make estate planning a priority and contact Tanko Law today. We can help you plan for the future and ensure your legal needs are covered.

Understanding Special Needs Trusts

Wed, 12 Jun 2019 10:35:29 GMT

When you have a loved one who suffers a physical or mental disability or is unable to manage their own finances, you may be tempted to bequeath a certain amount of funds to help them financially. However, Supplemental Security Income (SSI) and Medicaid benefits could be impacted if you opt to leave a lump sum to someone who is dependent on these government benefits. The better option is to create a special needs trust .

Types of Special Needs Trusts

There are three specific types of special needs trusts which are:

First-party special needs trust – when the assets placed into a trust belong to the beneficiary entirely, then a first-party trust is set up. The assets in the trust generally come from an inheritance, or from some type of settlement. For the purposes of determining government benefits, the assets are not considered in the calculation for the beneficiary. It is important to note that upon the death of the beneficiary, the government does have the right to demand reimbursement from the remaining assets for reimbursement of any expenses paid on behalf of the beneficiary.
Third-party special needs trust – when the assets in a trust belong to the donor to the trust, it is considered a third-party trust. The most significant difference with this type of special needs trust is upon the death of the beneficiary, the funds could then be bequeathed to other family members, donated to charity, or held in the trust for the benefit of other family members.
Pooled trust – the least commonly used since the funds are administered by a non-profit organization. These funds hold assets for multiple beneficiaries who all have their own “sub-accounts” but the assets are held and managed by one entity.

At Tanko Law , we focus on both first-party and third-party trusts which are the two most commonly used. Before establishing a special needs trust, it is important to understand what your goals are and how to avoid having the trust assets counted towards the criteria necessary for the beneficiary to collect government benefits.

Third-Party Trust Offers the Best Protections

Since a third-party trust does not interfere with government benefits, it is important to understand how they work and what language must be included in the documentation to make sure the assets are not counted towards the beneficiary’s assets.

The named trustee has full control over the assets in a third-party trust. Funds cannot be paid directly to the beneficiary. Instead, the trustee disburses funds based on specific needs, for example to pay rent, to pay for medical care not covered by Medicaid, or to made modifications to the beneficiary’s living quarters.

It is important to remember a special needs trust may be funded with various assets. In some instances, parents, grandparents, or other family members may place cash, or investments including stocks, bonds or real estate into the trust for the benefit of the beneficiary. Any assets remaining in the trust upon the death of the beneficiary may be directed to another family member, the beneficiary’s estate, or to a charity or organization of the donor’s choosing.

One of the most important parts of establishing a special needs trust is the language contained in the trust documents. To ensure the assets placed in the trust are not subject to being counted to determine the beneficiary’s eligibility for government benefits, the documents must specifically state “the trust is intended to provide “supplemental and extra care” beyond that which the government provides”. Additional language should also state the trust is not intended to be used for “basic support”.

Trusts an Important Tool for Tax and Estate Planning

When you are creating an estate plan, trusts can be one way to help preserve your assets by protecting them from creditors. Using a trust may also help reduce your tax liability. When you have a loved one who has special needs, a trust can help provide you with the assurance their quality of life will not be diminished upon your passing.

While there are several types of trusts which you may want to consider, ensuring your loved one still qualifies for government benefits is important since you want to provide them with a source of stable income. You should also be aware that a special needs trust, like other trusts, may be revocable or non-revocable.

Revocable Trusts vs. Non-Revocable Trusts

You should be fully aware of the long-term ramifications of setting up both revocable and non-revocable trusts . First, if your interest is in obtaining tax advantages by setting up a trust, the trust should be non-revocable. Primarily this is because until the date of the grantor’s death, the trust may be amended or revoked at any time. This makes the trust subject to estate taxes among other problems including being subject to liens or seizure by creditors.

A non-revocable trust is one that may not be altered or changed during the lifetime of the beneficiary. Once an asset is in the trust, it may not be transferred out of the trust without the permission of the beneficiary. Should an asset be removed from the trust with the permission of the beneficiary, the asset immediately becomes part of a taxable estate.

Hire a Knowledgeable Estate Planning Attorney

The best way to deal with a special needs trust, or any other type of trust is to make sure you are working with a knowledgeable lawyer who understands all aspects of estate planning . Trusts are a vital tool that can be used to avoid the probate process and preserve your assets and wealth during your lifetime. A special needs trust should be used to help ensure a loved one who is unable to manage money on their own or depends on you for a portion of their support will continue to have the same level of support after your death.

While many people do not believe estate planning is something they need to concern themselves with, this simply is not true. Estate planning is even more important when you have loved ones you wish to protect after your passing. Contact Tanko Law today and let us help you determine the type of trust which best meets your estate planning goals and helps meet the needs of your loved ones.

Top 11 Tips for Creating an Effective Business Plan

Wed, 15 May 2019 10:41:26 GMT

Oftentimes when starting a business, new entrepreneurs overlook one of the most important documents they will create which is their business plan. Business plans serve dual purposes; first, they provide a roadmap for a new business owner to monitor their progress against their goals, and they can help when you are seeking financial backing.

To make sure your business plan is as effective as possible, you should first understand the target audience. If you are using it for internal purposes only, you would need to have less information than if you were presenting it to a lender for the purposes of seeking financing. Here are some of the top tips to create an effective business plan designed to meet your specific needs.

Spell Out a Clear Vision – an effective business plan will have your vision for your business clearly explained. This is a blueprint for your goals for your business, where you expect to start, your expectations for the future, and your overall business goals.
Define Your Strengths and Opportunities – have an explanation of various opportunities your business may capitalize on and define what strengths you have which allow you to capitalize on those opportunities. This should be done after using various analysis including Strengths, Weakness, Opportunity, and Threats (SWOT), Political, Economic, Social, and Technological (PEST) and Social, Technological, Economic, Environmental, Political, Legal, and Ethical (STEEPLE).
Set Realistic Goals – most entrepreneurs are ready to hit the ground running and most have grand ideas for their business. However, an effective business plan cannot be built on imagination alone, it must be grounded. Not only will this allow prospective investors to see that you are considering all possibilities, it also allows you to celebrate progress. Since you may be hiring new employees, having clear, attainable goals also helps keep morale strong.
Use Realistic Time Frames – while it may be tempting to set up deadlines to accomplish various goals, make sure you take a close look at what your goals are and what is reasonable to expect for reaching those goals. It may also be beneficial to set up multiple time frames and see which ones are most logical for the market.
Allow for Worst-Case Scenarios – part of developing an effective business plan is being a realist. This means making sure you have a best- and worst-case scenario for each of your business goals. Your sales, hiring strategies, equipment needs, etc. should all be based on what happens if you are not reaching your immediate targets.
Know your Market – it is imperative you understand your target customer. For example, if your business is consumer driven, you should have an idea of what time of year they are most likely to need your products or services. If your target market is other businesses, you will have to determine when they sign contracts for purchases of products and services.
Back Up Your Claims – once you set up your financial projections, be prepared to back up your projections. This is important, particularly if you are seeking financing. Lenders will want to understand why you reached the conclusions you reached. This is done by having documentation available to demonstrate your claims are reality-based.
Introduce Your Management Team – your business plan should have information about your management team included. This is important, particularly if you are entering a competitive field. Make sure your management team resumes and other supporting documents are included in your business plan. This helps provide investors with a comfort level about the team operating the business.
Solid Financial Data – your business plan financials are one of the key elements of an effective business plan. Remember, this is one area of your business plan where you will want to be ultra conservative. It is better to underestimate than set expectations too high, particularly when you are just starting out. Account for all potential expenses including business licensing, start-up costs, taxes, as well as legal and accounting assistance.
Clearly Define Outside Help – there are few entrepreneurs who have all the skills needed to operate a business on their own. Make sure you clearly define consultants, IT personnel, accountants, etc. whom you may need to help you turn your idea into reality.
Seek Quality Legal Assistance – every entrepreneur should be in contact with a skilled business attorney. Contacting an attorney when starting a Minnesota business is important for several reasons. While you may write your business plan yourself, having an attorney help you with the structure and formation for your business is important.

Some of the issues Tanko Law Firm can help you with include:

Determining business structure – understanding whether to set up a partnership, LLC, or Corporation is important for numerous reasons including your tax-filing status. It is also important to remember your business structure may determine your personal liability.
Assist with needed contracts – every business owner will need to have certain contracts. You should have an attorney who can review and help manage vendor, employee, partner, and outside contractor contracts.
Business succession planning – the time to develop a succession plan is when you are starting your business. You need to consider what happens if you suddenly fall ill, should you decide to retire early, or what might happen if your business fails. Having an exit plan makes good business sense.
Address Risk Management Issues – business owners are often unaware of the various risks that are inherent in owning a business. For example, what happens if someone is injured on your property, what do you do if your business is sued, and what happens if a customer is injured because of a product your manufactured. An attorney who has experience dealing with business law can help you develop a risk-assessment and management plan.

Montana entrepreneurs should work with a skilled business attorney when they are forming a business and when developing a business plan . If you are one of the many residents who are considering starting a business, contact Tanko Law Office at 406-257-3711 or use our online contact form to schedule a free initial consultation with a Montana business attorney.

Do Revocable Trusts Protect Assets From Creditors?

Tue, 26 Mar 2019 10:46:10 GMT

The decisions you make when setting up your estate plan have a powerful effect on the legacy you leave behind to your loved ones and heirs. A proper estate plan can help to ensure that your end-of-life financial needs are met, your final wishes seen to, your assets protected and your children and other heirs spared the hardship of court battles and probate .

One of the most popular ways to handle asset protection is through the establishment of a trust. Different kinds of trusts exist, however, and choosing the wrong one can mean your assets aren’t actually protected. When making your estate plan, remember that your heirs aren’t the only ones to consider — creditors will also seek to recover their losses from your estate. Let’s look at the different kinds of trusts — revocable and irrevocable — and whether they can protect assets from creditors looking to recover credit debt.

Irrevocable vs. Revocable Trusts

There are two major categories of trusts you can set up: revocable and irrevocable trusts . An irrevocable trust means that the trust cannot be shut down, and anything that you put into it is no longer yours. It legally belongs to the trust. The trust manages and distributes any assets put into it. You are, in creating such a trust, surrendering your ability to modify these assets at a later date.

While this might sound scary, it also means that any assets in the trust aren’t yours, and therefore cannot be targeted for the collection of credit debt. A creditor cannot touch assets placed into an irrevocable trust, except in very specific circumstances, which we’ll look at a bit later.

A revocable trust, on the other hand, doesn’t require you to completely surrender control over the assets placed into it. These trusts are also called living trusts, in which you will still own the assets placed into it. While you can make changes to a living trust and still have a degree of control over the assets, creditors can also force the surrender of those assets to collect on debt owed.

When an Irrevocable Trust Doesn’t Protect Assets

The degree to which assets are protected in an irrevocable trust is generally adjudicated by the individual state. In general, however, there is one way that creditors can still access assets within such a trust. If the courts find that you made the transfer of assets with the specific intention of defrauding your creditor, the transfer itself is considered fraudulent and not only carries legal penalties, it can also open up the assets within the trust to seizure for credit debt collection.

That’s why it’s so important to enact your asset protection early, before you even become the subject of liability. A strong history of asset protection will help to fight off accusations of fraudulent transfers and can help to keep creditors at bay.

When Should I Use Revocable Trusts?

Revocable trusts are also sometimes called living trusts . This kind of trust exists specifically to spare the family the expense and stress of going through probate courts. This is a worthy goal, as it greatly streamlines the process of distributing your assets, much more so than a simple will. Property that you leave to others via a revocable trust does not need the approval of probate courts before it’s passed on.

A simple will, on the other hand, can require probate approval. The probate process can get expensive and complicated, taking up to a year and absorbing as much as 5 percent of the estate in costs, depending on your individual situation and where you live.

Further, living trusts allow you to name a successor trustee, which is the person who takes over management of your estate after your death. This person can also step in and manage the assets of the trust should you ever become incapacitated from accident or illness, ensuring your ongoing expenses are met.

Why Living Trusts Don’t Protect Assets From Creditors

We live in one of the most litigious countries in the world and, unfortunately, revocable trusts can be targeted by someone who has a legal claim against you. Even though the trust itself is established as a legal entity, you own the assets within the trust. You are the trustee of the trust, and you have absolute control over any assets held by the trust. You can place property in, take it back out, sell it or make a gift of it as you like, without restriction.

In addition, you can revoke the trust. That means you can simply make the trust go away and all assets will revert to your personal ownership again. Any income generated by assets in the trust while it is active is taxed on your personal income tax every year. Though the trust is a legal entity, it is not a tax-paying entity.

For these reasons, anyone who has a legal claim against your assets, such as creditors seeking to recover any credit debt you owe, can target the assets in the living revocable trust. It will not protect your assets from debt collection.

How Can I Protect My Assets?

Protecting assets is not always as simple as it might appear. If you don’t have a history of asset protection , there’s a risk of any effort you take being found fraudulent as an effort to avoid paying your debts. If, however, you have the right help, you can take steps to make sure that your assets are secure and your heirs get the money you intend for them to have. A homestead exemption can protect a certain amount of money from creditor claims, so investing in your home or property can help.

Life insurance and retirement accounts are also typically protected from creditors, as are any annuities you purchase. Transferring ownership of assets into a limited liability company or a limited family partnership is another way to protect assets. Finally, an irrevocable trust can present effective asset protection options against credit debt.

In the end, it comes down to your specific needs and the assets you have to protect. The right estate planning and trust attorney can help you set up an irrevocable trust or advise you on other steps to protect your assets and ultimately ensure your heirs receive what you intend, without undue hassle. Tanko Law Office is here to Montana residents with asset protection and estate planning in all regards. Give us a call to schedule a free consultation with one of our attorneys.

Can a Trust Protect Your Assets During Divorce?

Mon, 18 Mar 2019 11:00:34 GMT

Yes, a trust can potentially protect your assets during a divorce, particularly an irrevocable trust, as it generally removes the assets from your personal ownership. However, the protection offered by a trust can depends on various factors, including the type of trust, when it was established, and state laws.

It’s no surprise that asset division according to divorce law can be complicated, but your Montana Trusts Lawyers are here to shed some light on the role trusts play in divorce proceedings.

Irrevocable Trusts vs. Revocable Trust

A living trust is one that the grantor, the individual who creates and funds the trust, sets up while alive.

Living trusts come in two forms:

Irrevocable: A trust that can’t be modified, amended or terminated without the permission of the beneficiary. After transferring assets into the trust, the written terms can’t be changed.
Revocable: A trust that can be altered or cancelled at any time by the grantor. Income earned from the assets are distributed to the grantor and the assets won’t transfer to beneficiaries until after death.

In addition to these important differences, there are also some protections and drawbacks to each type of trust when it comes to the division of assets in divorce.

Irrevocable Trusts

An irrevocable trust can’t be withdrawn or changed once established, which simply means that the assets transferred into the trust are no longer in possession or control of the grantor. This is an important distinction, since it provides tax advantages to the grantor and protects those assets from creditors.

In the case of divorce, the property in an irrevocable trust may still be subjected to division between spouses, but it depends on whether it was formed during or prior to the marriage.

Classification of Assets

If an irrevocable trust was established before marriage, the funds are usually considered separate property and aren’t subjected to asset division. This can vary by state, however.

If the trust was established during the marriage, many states will subject it to asset division, unless it can be proven that it was created with the sole purpose of keeping assets separated. Proving this can be challenging, however, especially in cases when other assets were joined during the marriage.

Spouse as Beneficiary

A spouse is often the beneficiary of a trust that was established during the marriage. Even if it can be proven that the trust was formed with the intention of keeping assets separate, the trust document can’t be changed to prevent a spouse from inheriting assets according to its terms. As a result, the spouse could receive assets distributed under the terms of the trust long after the divorce is complete.

Some states allow language in the trust that provides an alternate beneficiary in the case of divorce, however.

Fraudulent Conveyance

Establishing a trust after marriage problems occur can present a problem in court. Many courts see the attempt to reduce your assets with the intent of limiting your spouse’s entitled share as fraudulent conveyance.

For example, a grantor may try to place assets in a trust that would prevent them from being awarded to the spouse in the event of marital misconduct, like adultery, on the grantor’s part. In a case like this, the court may void the transfer and terminate the trust, ensuring that your spouse will get their fair share.

Impact on Support

Even if an irrevocable trust is successful in shielding assets from division during divorce, the income received from the trust is often used to calculate child support and alimony. So, if there are significant gains from trust assets, it’s likely that the spouse will be awarded part of the income as fair spousal support or child support.

Revocable Trusts

Revocable trusts involve the transfer of property to another individual to “hold” on behalf of a beneficiary, but the grantor is still permitted to revoke the trust and remove the assets.

Revocable trusts are typically used to avoid probate or to keep beneficiaries from squandering trust assets, but they can create unique complications in divorce cases.

Is a Revocable Trust Marital Property?

No, generally trusts – revocable or irrevocable – are considered the separate property of the beneficiary spouse. The only exception would be if the funds from the trust were put into a joint account and used for marital assets or expenses; those funds would be considered marital property.

Classification of Assets in a Beneficiary Divorce

Each state has its own laws regarding asset division in divorce. Though most states won’t allow the court to divide property by gift or inheritance, some do allow it. Because a beneficiary has no legal rights to principal or income with an irrevocable trust, it’s not technically owned assets to be divided.

In this case, a revocable trust is helpful for grantors looking to keep a former spouse of a beneficiary from trust assets or income in states that allow gifts or inheritance.

Classification of Assets in a Grantor’s Divorce

A revocable trust allows the grantor to revoke the trust and recover the assets at any time, and the assets held within it can be divided by the court during a divorce. Legal title to the trust assets may reside the with trustee, or the individual holding the property for the benefit of the beneficiary, but the right to repossess the assets has real value in terms of dividing it between spouses.

If the grantor funds the trust with assets that would otherwise be considered separate in states that acknowledge separate property, the right of revocation is also separate. In states that allow the division of gifts or inheritance, however, placing assets in a revocable trust doesn’t protect them from division in a divorce.

Impact on Support

State child support guidelines take the parents’ income into account from all sources, which includes revocable trusts. This means that the assets held in the trust can be used in calculating child support under the state’s guidelines.

The income in revocable trusts can also be used to calculate the ability to pay spousal support or the need for spousal support.

Get Help From Tanko Law

Though trusts can impact divorce proceedings, it’s important to consider the difference between irrevocable and revocable trusts and how they affect the division of assets.

With so much at stake, it’s important to discuss your estate planning with a qualified attorney to ensure your loved ones and assets are protected. At Tanko Law , we’re proud to offer a range of estate planning services, including trusts, to our clients in Montana. Contact us today to find out how we can help you!

How Does Probate Court Work?

Mon, 04 Mar 2019 11:08:33 GMT

Probate is the court-supervised process of collecting a decedent’s property and assets and distributing them to their beneficiaries. Unless there are family members fighting over the assets, there’s very little actual court time involved. Probate is mostly paperwork.

If probate does move to court, however, the process is a little bit different. Find out how probate court works and what to expect.

Probate Without a Will

When someone dies without a will or a revocable living trust, the assets need to be distributed to the heirs, which is detailed in the state’s probate law. The order in which the assets are distributed among the heirs is stated by the law of intestate succession.

The surviving spouse is entitled to a portion of the decedent’s property, but then the law designates which assets the children, grandchildren, parents, siblings or other family members inherit. The order and details of intestate succession vary by state.

Probate With a Will

When someone dies with a will in place, the assets are distributed to the beneficiaries and organizations listed in the document.

The court needs to determine that the will is valid. If the validity of the will is challenged, such as by a family member, the court must verify it.

In all states, regardless of whether there’s a valid will, the surviving spouse is entitled to a portion of the decedent’s assets. This is known as the spouse’s elective share, and how much they receive can vary by state.

In states with community property , one-half of the shared property owned by the couple during the time of the marriage is given to the surviving spouse. The will also dictates how the decedent’s portion of the community property and separately owned property are divided among heirs.

The Probate Process

The probate process starts with filing a petition for probate in the court. This is typically completed by a person named in the will.

A copy of the will should be filed with the court, unless it was already filed in a different state, and there are official probate court forms that should be filled out.

The court will issue an order to appoint an executor of the will. This person will handle the estate. If there’s no will, this person is known as an administrator.

The executor or administrator is tasked with handling the distribution of assets in the state, as well as other administrative tasks. The executor must open an estate bank account, arrange the legal notices in the newspaper, send notices to heirs, sell assets and handle validity claims from creditors and settle the debts. They must also file a tax return for the decedent and transfer the assets to the heirs. In many cases, the executor will enlist the help of a probate lawyer.

How Long Does Probate Court Take?

The probate process can take several months or years to finish, depending on the size of the estate. On average, the probate process takes between six months and two years.

The longer the probate process is, the more money it will cost. If any beneficiaries contest the will, the process becomes more expensive and time-consuming.

Probate also makes the decedent’s financial circumstances public record, which includes the type of assets, the value of the assets, the existing debts and the beneficiaries. For this reason, many people with large estates or privacy concerns will avoid probate by using a revocable living trust rather than a will.

If a person doesn’t have an estate plan or missed funding for a revocable living trust, then the surviving family members will need to enter into probate for some or all of the assets.

The cost of probate varies as well, depending on the type and value of the assets. Generally, the higher the probate property value, the more it will ultimately cost.

Probate Court Fees

Probate court involves locating various individuals to whom assets and property must be distributed, so it’s far more expensive without a will or irrevocable trust. Here are some common fees associated with probate court:

Personal representative fees: These probate fees are often required by state law. This is referred to as a “reasonable fee” in many states, but it could also be a percentage of the total assets in probate. The executor can ask for extraordinary fees as compensation for services that go above the basic probate services as well.
Attorney’s fees: These probate fees are also required by law and are calculated similarly to the personal representative fees. Like the executor, the attorney can ask for extraordinary fees as compensation for services that are above the basic probate services.
Accounting fees: These probate fees vary according to the value of the estate and the kind of assets included. For example, a small estate with numerous stocks and bonds will likely have greater accounting fees than a large estate with only a solitary property and a few bank accounts. If the estate has private investments that are difficult to determine the value of, there are additional fees. Accounting fees may also include the preparation and filing of state or federal taxes.
Appraisal fees: These probate fees are necessary to determine the true value of the assets at the time of death. This includes business interests, antiques, jewelry, artwork, vehicles and more. The valuation of a business may take more time and effort than other assets, since the goal is to have it valued as low as possible.
Bond fees: If a person dies without a will that waives the posting of the bond before the executor is appointed, then the executor needs to pay for and post a bond. This amount is determined by the probate court judge.
Miscellaneous fees: These probate fees can range from postage on the mail correspondence to the bill for the notary. These fees are typically smaller, but they can add up.

In total, the cost of probate court is roughly 3 to 8 percent of assets. If the estate value is greater than the estate tax exemption for the year, then estate and income taxes are owed as well. This taxation rate is fairly high.

Plan for the Future

Now that you’re aware of how pricey and complicated probate court can be and the stress it can cause for your surviving family members, you understand the importance of estate planning . At Tanko Law , we’re proud to offer a range of estate planning, wills and trusts, and probate services to our clients in Montana. Contact us today to learn more about our estate planning services and get started!

What are the Rules of Intestacy?

Mon, 26 Nov 2018 11:12:21 GMT

If a person passes away without a valid will, all the assets in their estate must be distributed to beneficiaries according to legal guidelines known as the rules of intestacy. In these cases, only married or civil partners, along with some other relatives, are able to inherit intestate assets.

Intestacy can also occur if someone has a will that has been deemed invalid according to the law. In this case, the court will follow the rules of intestacy to distribute the property, which may or may not be according to the wishes expressed by the decedent in the will.

If you’re wondering what happens if you die without an estate plan, learn more about the rules of intestacy and find out how to ensure your family is protected in the event of your death.

1990 Uniform Probate Code

The 1990 Uniform Probate Code serves as a general guideline for intestacy, but each state can have additional laws in place for how assets are distributed.

Under the 1990 Uniform Probate Code, the closest relatives inherit assets instead of distant relatives or friends designated by the decedent. Generally, this begins with the surviving partner, descendants, parents, descendants of the parents, such as siblings, nephews or nieces, grandparents and descendants of the grandparents, such as uncles, aunts and cousins. Children who were adopted are treated as biological children, provided the adoption is legal. If there are no legal descendants, the estate goes to the state by default, which is known as “escheats.”

Married Partners and Civil Partners

Under the rules of intestacy, married partners and civil partners may inherit the deceased spouse’s property if they are legally married or in a civil partnership at the time of death. If you’re divorced or the partnership has been ended at the time of death, however, the surviving spouse will not inherit any of the deceased spouse’s property. Partners who are informally separated may still inherit property, provided they’re not legally separated.

The surviving spouse inherits the entire estate if there are no surviving parents and all the surviving children are from both the decedent and the surviving spouse.

If the decedent’s parent or parents survive but there are no surviving children, the spouse inherits $200,000 of the estate, as well as three-quarters of the remaining assets.

If the decedent is survived by children who are also descendants of the surviving spouse and the decedent and the surviving spouse also has any surviving descendents who are not also descendents of the decedent, the surviving spouse inherits $100,000 of the estate, as well as one-half of the remaining assets.

Descendants and the Right of Representation

If a decedent leaves behind no surviving spouse, but has direct descendants, the descendants inherit the entire estate under the right of representation. The right of representation gives the descendants of the beneficiary who passed away the right to collect the property originally intended to go to another decedent, in this case, the surviving spouse.

Surviving Parents

If a decedent has no surviving spouse or descendants, all property is distributed to the decedent’s surviving parents equally. In the case of only one surviving parent, the entire estate goes to the sole surviving parent. This is another example of the right of representation, since the estate would originally be intended for the surviving spouse or surviving children, but none exist.

Other Relatives

In the case of a decedent with no surviving spouse, descendants or parents, the entire estate goes to the biological or legal siblings of the decedent. If there are no surviving siblings, the entire estate passes to the siblings’ children. If there are no children, the estate goes to the decedent’s grandparents or their descendants.

Net Estate

The entire estate left to the surviving descendants is the “net estate,” which is what’s remaining after all debt, taxes, protections and administrative costs are paid. Protections may include family allowances, homestead allowances and exempt allowances.

Jointly Owned Property

Jointly owned property comes in two forms: with rights of survivorship and without rights of survivorship.

Jointly owned property with rights of survivorship means that two or more individuals own the account or real estate together, so if one owner dies, the remaining owner fully owns the property. A special type of ownership with rights of survivorship between married couples is “tenancy by the entirety” in some states, while “community property” is another type of joint ownership in other states.

Jointly owned property without rights of survivorship means that two or more individuals own a percentage of the account or real estate together. Joint ownership without rights of survivorship is often referred to as owning the property as “tenants in common.”

In the case of intestacy, tenants in common property, or property without rights of survivorship, will go through court-supervised probate to determine the distribution among heirs. Nonprobate assets include property owned jointly with the rights of survivorship, including tenancy by the entirety and certain community property.

In some cases, property is “title by contract,” which means that the property has a beneficiary named on the title to receive the property after the owner’s death. This often means bank accounts or investments that have “transfer on death,” “payable on death” or “in trust for.” Life insurance, retirement accounts such as IRAs, 401(k)s and annuities, and life estates that have transfer on death or beneficiary deeds.

Get Estate Planning Help

With so many rules of intestacy, you can see why it’s so important to have a valid estate plan in place to protect your loved ones in the event of your death, especially if you have many qualified descendants and a lot of assets.

If you need help planning your estate, Tanko Law can help. We’ve been providing the best in probate services, estate planning, wills and trusts since 1995, so we’re sure we can offer you the best legal advice and services to ensure your loved ones are cared for after loss. Contact us today to schedule your consultation for your estate planning!

What is the Difference Between Revocable and Irrevocable Trusts?

Mon, 29 Oct 2018 11:14:58 GMT

If you’re looking into estate planning, understanding the difference between revocable and irrevocable trusts is vital to your family’s future. If you select the option that doesn’t align with your goals, you could end up with considerable tax and legal penalties.

In most cases, the revocable living trust will become irrevocable if the trustmaker dies, and it may be broken into separate, individual irrevocable trusts to benefit the surviving family members. This is usually referred to as AB trusts or ABC trusts.

Though the inability to modify an irrevocable trust can be unsettling to some, irrevocable trusts are used for different estate planning purposes, such as:

Estate tax reduction: Irrevocable trusts can be used to take the value of assets from an estate and reduce the amount of taxes paid. In this case, the assets in an irrevocable trust are given to the trustee or beneficiaries, which means they no longer belong to the trustmaker and can’t be taxed.

AB trusts can be used for the same purpose, however. AB trusts are exempt from estate taxes when the funding of the B trust falls below the estate tax exemption. If the remaining value of the estate is higher than the estate tax exemption, the assets are transferred into the A trust, which benefits the surviving spouse and defers the estate taxes until after the death of the surviving spouse.

ABC trusts are often chosen by married couples who are subject to state estate tax, provided the state estate tax exemption is lower than the federal estate tax exemption. Like the AB trust, this allows the transfer of assets to lower the estate tax burden, but the C holds the difference between the federal and state tax exemption and defers the tax payment until after death.

So, what is the difference between revocable and irrevocable trusts? Learn more about each of these options and find out which one is more appropriate for your needs.

Revocable Trusts

A revocable living trust , which may also be called a living trust, revocable trust or inter-vivos trust, is a trust that can be revised or altered at any point. If you’re considering estate planning early in your life, for example, a revocable living trust allows you to change the beneficiary or trustee if your situation changes. This is a trust amendment . You also have the option to rewrite the entire agreement if you choose, which can be done through a trust amendment and restatement.

While the option to revise your trust is appealing for many, there are a few disadvantages to choosing a revocable trust. The assets included in the trust are considered your assets for the sake of estate tax and debts, so there’s no credit protection against a lawsuit. All assets in your trust at the time of death are subject to federal and state estate taxes, as well as state inheritance taxes, and they factor in to the Medicare/Medicaid planning process.

Choosing a revocable living trust for your estate planning is the right choice if:

You’re planning for mental disability. In this situation, a revocable living trust allows the assets within the trust to be handled by a disability trustee, rather than the court guardian, at the time of mental incapacitation.
You want to avoid probate . At the time of your death, assets within a revocable trust can be distributed directly to the beneficiaries outside of probate.
You want to protect your privacy. Because you avoid probate with a revocable trust, your agreement will stay private, unlike a will, which becomes public record. This protects the details of your property, assets and who you’ve named as beneficiaries, allowing your family’s business to remain private.

Irrevocable Trusts

An irrevocable trust is a type of trust that can’t be amended or altered after it’s been signed. This can also apply to a revocable trust that has become irrevocable following the death of the trustmaker.

Under certain conditions, however, an irrevocable trust may be changed, such as when part of the trust agreement states that the terms may be modified under limited and specific circumstances. Charitable trusts can also be modified, and the court may order judicial modification of a trust if it’s petitioned to do so by a trustee or beneficiaries.

Asset protection : Irrevocable trusts allow asset protection for the trustmaker. In a similar way to how an irrevocable trust may be used to reduce taxes, a trustmaker can transfer assets into an irrevocable trust. The trustmaker gives up control of the assets, which protects them from debts or other financial obligation.

In this situation, the family can become beneficiaries of the irrevocable trust to have the financial support, while also being protected from debt. These are known as self-settled trusts or domestic asset protection trusts. As you can see, there are many ways to create an irrevocable trust that benefits the surviving spouse or beneficiaries.

Charitable estate planning: Irrevocable trusts can also be used for charitable estate planning, which can be done through a charitable remainder trust or a charitable lead trust. After the initial transfer of assets, the trustmaker earns a charitable income tax reduction for the year the transfer occurred. If this contribution is made after the trust maker’s death, the estate receives a charitable estate tax deduction.

Choosing a Trust in Estate Planning

There are many options in estate planning to ensure you protect your assets and distribute them to the family members and friends you desire, but choosing the one that best fits your needs depends on your individual goals and current assets.

Estate planning can be complicated, so if you want to be sure you’re making the right choice for your future goals, Tanko Law can help. Our experienced estate planning attorneys will be happy to help you learn more about the difference between revocable and irrevocable trusts and guide you through the advantages and disadvantages, giving you the tools you need to plan for the future. Contact us today to schedule a consultation and get started with the estate planning process!

What Happens if Someone Dies Without a Will?

Thu, 26 Jul 2018 11:20:08 GMT

When someone dies without a will, especially with a spouse or children, it can be stressful for the person left to distribute the estate. This is known as “intestate,” and means that laws of the state where the deceased resided will determine the property distribution, such as bank accounts and real estate.

To fully understand what happens if someone dies without a will and intestate succession laws, let’s examine the assets not passed by a will, as well as the way the estate gets distributed among heirs.

What Assets Aren’t Passed by a Will?

Before concerning yourself with who gets what assets, it’s important to know which assets are handled outside of the will. These include:

Life insurance proceeds
Any bank account, real estate or assets held in tenancy by entirety, joint tenancy or community property with right of survivorship
Living trust property
Funds in an IRA, 401(k) or retirement plan with a beneficiary
Funds in a payable-on-death bank account
Stocks or other securities held in a transfer-on-death account
Assets held with a transfer-on-death deed or title document

The documents related to these types of assets will show beneficiary designation or co-ownership.

Who is the Executor?

When someone has a will, they name the executor of the will who will distribute assets and arrange the payment of debts and expenses. If there’s no will to determine the executor, the laws in that state provide a list of eligible people who can fill the role. Most states use the surviving spouse or domestic partner, followed by adult children, then other family members who are eligible by state law.

Distribution of Assets in Intestate Succession

Each state has intestate succession laws that guide the distribution of assets when someone dies without a will or trust. Typically, spouses, legal domestic partners and blood relatives inherit the assets, while partners, friends or charities get nothing. The spouse usually gets the largest share of the assets, and if there are no children, the spouse inherits all property. Other blood relatives will only stand to inherit something if there is no spouse, domestic partner or children. If there aren’t any legitimate heirs, the state takes the assets.

The caveat to this is that all states have rules that prevent certain people from inheriting any assets if they caused harm to the deceased. A few examples of this are situations in which a person criminally caused the death, or a parent who abandoned or committed crimes against a child.

Glossary of Terms

Intestate succession laws use familiar language, such as children, but it’s important to understand the legal definitions of these terms as they relate to the distribution of assets.

Spouse

A surviving spouse must have been legally married to the deceased person at the time of death.

If the married couple separate prior to the death of one spouse, or one spouse filed for divorce, it’s up to a judge to decide if the surviving spouse is entitled to assets.
In some states, common-law marriage is a couple who never had a formal wedding ceremony, but are still considered legally married. The couple must live together for a specified period of time, intend to be married and present themselves as married, but the criteria can differ by state and may impact the intestate succession laws.
Same-sex partnerships are a gray area, depending on the state where they live. If the state recognizes same-sex marriage, the remaining partner can still be considered a surviving spouse, but in a state where same-sex marriage isn’t recognized, this is left up to a judge.

Children and Issue

Though it may seem obvious, “children” is a broad term that includes many different situations and impacts the intestate succession laws. “Issue” refers to the person who should inherit assets in the absence of a will, which usually refers to direct descendants.

Legally adopted children will inherit assets from their adoptive parents, just as biological children.
Stepchildren who were never legally adopted may not stand to inherit anything from the non-biological parent, depending on the laws of the state.
Foster children are not recognized as “children” of the foster parents, and don’t typically inherit anything.
Children put up for adoption can’t inherit assets from their birth parents, in most cases, and vice versa. Placing a child for adoption severs the legal ties between the birth parents and the child.
Children adopted by a stepparent may still inherit from the biological parents, depending on the laws in that state.
Children born after the death of a biological parent, also referred to as a “posthumous” child, inherit assets like any other biological child.
Children born to unmarried parents inherit from the birth mother, unless they’re adopted by non-relatives. If the child was never legally adopted and the parents stay unmarried, the child will need proof to inherit from the father.

Siblings

If an intestate succession law includes the siblings as heirs, this can include full siblings, half siblings, and in some situations, siblings who were given up for adoption.

Deceased Heirs

If the heir to the deceased person has also passed away, the laws depend on their relationship with the deceased. If the heir was a child of the deceased, the surviving grandchildren may stand to inherit some or all of the assets their deceased parent would have received, depending on the other surviving heirs.

Survivorship Requirements

In order to be considered a surviving heir, the heir must live a specified period of time longer than the deceased person, which can vary by state. This time frame can vary, with some states only specifying that they live longer, even if it’s merely a minute. Some states adopted the Uniform Simultaneous Death Act, which states that for the purpose of inheritance, each person is treated as though they had survived the other.

Rights of a Deceased Heir’s Descendants

If one of a group of heirs has died, such as one of several biological children, his or her children inherit the parent’s share of the assets. Known as the “right of representation,” this allows the children or grandchildren to stand in the place of the deceased parent, though the actual shares can vary by state law.

Guardianship of Minor Children

If a parent with young children dies without naming a guardian, it’s up to the judge to appoint one. To do this, the judge usually compiles as much information as possible about the children and their situation, as well as the deceased parent’s wishes, to inform their decision. In these cases, the judge must always act in the best interest of the children.

Get Expert Guidance with an Estate Planning Attorney

Intestate succession law can be murky and complicated, so it’s always best to prepare a will to ensure your family is properly taken care of in the event of your death. If you’re in Montana and want to get your affairs in order, Tanko Law can help. Our estate attorneys will be happy to give you advice and guidance, so you can be sure your family is protected. Contact us today to get started!

Tenants in Common vs Joint Tenants with Rights of Survivorship

Wed, 20 Jun 2018 11:32:08 GMT

Co-ownership of property can be a very tricky subject in today’s world. Whether it’s a married couple, business partners, roommates, or a romantic couple that simply lives together. Each type of living arrangement has different benefits and drawbacks, and there’s a lot of confusing terminology that goes along with it. Unfortunately, these terms carry legal implications that are very important regarding the passing on of property.

Two of the most important terms you’ll hear are, “tenants in common,” and “joint tenants with rights of survivorship.” The second of these is often abbreviated as “JTWROS,” for brevity. While both might sound on the surface like they’re quite similar, there are core differences between them that will make all the difference. Let’s examine the difference between Tenants in Common and Joint Tenants with Rights of Survivorship, what they mean and why it matters to your living arrangements.

Deeds and Ownership

Ownership of property in the United States is expressed in the form of titles and deeds. These documents grant the buyer ownership of the property in question. When you own a house and land you have a deed. When you own a car, you have a title to the car. Usually these documents are held by the lender who financed your purchase until you’ve paid off the loan, and then the deed comes to you.

To guarantee an unbroken chain of record keeping, each deed includes the names of the sellers as well as the buyers. Any vesting chosen by the buyers (also called the grantees) is also listed on the deed, after their names. The deed will also include a description of the property, and will be filed as public record in the county clerk’s office.

What Is Vesting?

Vesting is an important part of the transferal of property, especially if co-ownership is going to be had. This is the term for establishing co-tenancy rules for the property. They clarify the percentage of the property that each tenant will hold, and what will occur when one tenant passes on. The two most common forms of vesting are tenants in common and joint tenants with rights of survivorship.

Tenants in Common

Tenants in common refers to a situation where two or more people live in a property and the ownership shares are divided between them. In such a case, the property shares owned by any given tenant will pass to that tenant’s estate upon their death.

When the parties involved in an ownership stake are not related, this can be a beneficial arrangement. It allows you to determine what happens with your property when you die. While it still might require going through the probate process, so long as you have made your wishes clear, the process is often smooth.

In addition, you can sell your interest in the property any time you like; you don’t need the consent or approval of the other property owners or tenants. You can transfer, assign interest or even mortgage your interest in the property.

Ownership stakes in a Tenants in Common situation do not have to be equal. It’s possible for two tenants to hold equal shares in a property, it can be a 60/40 split, it can be three owners with a 33/33/34 split, or any other combination, so long as the ownership percentages equal 100%. Each share is separate and individual from one another, which is what allows for transferal, mortgaging or sale.

Things to Consider with Tenants in Common

There are a number of things to consider when entering into a tenant-in-common agreement. First, just as you can transfer your shares, so can each of the other owners, and you can’t stop or challenge them from doing so.

Because of this, it’s a good idea to draft a formal agreement between all of the various owners to address this potential situation. Having an agreement or contract in place can help to avoid a lot of stress and conflict on a personal level, or a financial one.

Joint Tenants with Rights of Survivorship

Joint tenants with rights of survivorship is the kind of co-ownership and cohabitation usually held by married couples. In this form of co-ownership, the couple each has an equal share in ownership, and there’s no division of rights. This means that if one party in ownership wishes to transfer the ownership, the other owner (or owners) must consent and sign the deed.

In this case, when one owner passes away, their share of ownership is automatically passed to the survivor. Survivorship rights take precedence over the inheritance rules or will in the given state. That means if you pass away and leave your home to your kids, but your spouse is still alive, your spouse automatically inherits the property until they, too, pass away. At this point the property will pass on according to your final wishes.

With a JTWROS arrangement, when one party passes on there is no probate process necessary. The property automatically transfers to the surviving owner. Probate, however, is necessary after the final owner dies. Still, as with any final arrangements, if your final will and estate planning is in order, the process can be relatively fast and simple for your heirs.

Things to Consider in JTWROS

In a JTWROS arrangement, there are also potential pitfalls. If relations between the two parties deteriorate, such as in a separation or divorce, or when business partners are splitting their interest, both parties have to agree on any sale or transfer of the property. The same issues can arise if, for example, the asset is owned with a child who is estranged from the parents.

In addition, if one owner of such a property dies and is heavily in debt, if the probate courts are afraid the surviving owner will liquidate the funds to avoid paying the debt, they can freeze the account. Accounts can also be frozen if there’s some dispute over contributions to the account or if it’s an ownership of convenience.

Working with an Estate Planning Attorney

When making these decisions it’s essential to have the right legal guidance to ensure you’ve considered all the benefits and pitfalls. If you’re in Colorado and you need help or guidance in this area, contact Tanko Law for help today.

How to Use a Trust to Protect Assets in Montana

Tue, 08 May 2018 11:42:49 GMT

Owning a large estate is a tremendous benefit to you and your family. However, it can also cause major burdens when you pass away. An estate tax can have a hefty cost and drastically decrease the financial well-being you worked so hard to build for your loved ones.

A trust will keep your assets safe after you pass away. However, it's important to know how a trust works and know which type is best for you. Discover how to use a trust to protect assets in this guide from Tanko Law.

What Is a Trust?

A trust is an arrangement whereby a third party, called a trustee, holds assets on the behalf of a recipient, also called a beneficiary. There are many ways to arrange trusts, and the trustee can specify how and when assets pass to the beneficiary or beneficiaries.

If properly funded, a trust allows your beneficiaries to avoid probate and grants them access to your assets sooner than if your estate passes through a Will. Trusts can also potentially provide protection from creditors. Please call Tanko Law Office for more information on how a Trust can help protect your assets from creditors.

Regardless of the type of trust you choose, a trustee is responsible for managing specific assets for the benefit of your beneficiaries. There are several types of trusts including revocable and an irrevocable trusts. A revocable trust may be modified during the trustor’s lifetime while an irrevocable trust cannot. Choosing a trust that will fit your needs is essential and Tanko Law Office is here to help you understand what trust is best for you.

Advantages of a Trust

Trusts offer many advantages that a Will does not including the following:

Allowing a Trustor to set specific conditions for distributions to beneficiaries;
Assisting with tax planning in order to ensure that your beneficiaries receive your estate and not the government
Offering asset protection from your creditors and your beneficiaries’ creditors
Allowing you to designate your successor trustee, to ensure proper management of your trust assets after your death

Family Trust

In a family trust, also called a bypass trust, you make a will bequeathing the amount up to the estate-tax exemption to the trust. The remainder of the estate passes tax-free to your spouse. You'll also specify exactly how the trust is to be used; for example, you may want to stipulate that trust income goes to your spouse after you die and that the trust principal is to be distributed tax-free to your children after your spouse dies.

Because your spouse is entitled to an estate-tax exemption as well, you and your spouse can, in effect, double the share of your children's' inheritance that can be shielded from estate taxes.

Once you place money in a bypass trust, it will always be exempt from the estate tax, even if the amount of money grows. So with wise investing on the part of your surviving spouse, he or she can significantly add to the amount of the children's inheritance.

Generation-Skipping Trust

Also known as a dynasty trust, a generation-skipping trust allows you to transfer money tax-free to beneficiaries at least two generations younger than you. Usually, the recipients are grandchildren, though they can also be great-grandchildren. You may stipulate that your children are to receive income from this trust and that they may use the principal for things that help the beneficiaries, such as college tuition or bills.

There is an important detail to note with this type of trust, however. If you leave your children more than the amount of the exemption, this bequest becomes subject to a transfer tax. The transfer tax is independent from estate taxes, and it's intended to prevent wealthy seniors from transferring all their money to their grandchildren.

Qualified Personal Residence Trust

A qualified personal residence trust (QPRT) removes the value of your home from your estate. It's useful for a home that is going to appreciate in value. A QPRT allows you to give someone your home as a gift, usually your children, while allowing you to keep control of it for a length of time that you specify. If you choose, you may continue living in the home during that time, and you will maintain full control of it.

In assigning value to the gift, the IRS presumes your home is worth less than its current value, as the recipient won't take possession of the house for years. However, there is a catch. If you do not outlive this trust, the IRS will count the full market value of the house when calculating your estate. To ensure that a QPRT is valid, you must outlive it, then either vacate the home or pay your children rent according to the fair market rent to continue living there.

There are several types of trusts, including Revocable Family Trusts or Irrevocable Trusts. Each trust has benefits to ensure that your assets are properly distributed to your beneficiaries. In order to determine which trust best fits your Estate Planning goals, please contact Tanko Law Office so that our team of experienced attorneys can assist you in determine which trust is right for you. Tanko Law Office has helped Montana residents with trusts since 1995. Visit our website for More information or call us at (406) 257-3711 to schedule your free 30-minute consultation with one of our experienced attorneys.

Let Us Help You

At Tanko Law, our team of experienced attorneys has helped Montana residents with trusts since 1995. Visit our website for more information. Our attorneys will answer your questions and show you how to use a trust to protect your assets. Call us at (406) 257-3711 for a free consultation today.

How to Use a Dynasty Trust To Grow Wealth and Benefit Future Generations

Tue, 24 Apr 2018 11:46:34 GMT

If you own a large estate, consider the best estate plans for you and your heirs. You don’t want to burden your children with a heavy estate tax once you pass away. Estate lawyers recommend setting up trusts to protect your assets . The dynasty trust is more intriguing than traditional trusts because theoretically they can last forever. Read on to see how to use a dynasty trust to grow wealth and benefit future generations.

What is a Dynasty Trust?

A dynasty trust provides for your children and their heirs for generations to come. The assets in the trust will increase in value over time. For example, if you left five million dollars to your child in a dynasty trust, it could be worth fifteen million dollars thirty years later.

The biggest bonus in using a dynasty trust is that your heirs don’t have to pay a huge estate tax. You have to pay an estate tax just once when you transfer the assets into the trust.

Beware that some states have rules against perpetuities. These rules cut down on the timespan of dynasty funds, indicating the trust ends approximately 21 years after the death of the original beneficiary. In recent years however, certain states have disbanded the rules of perpetuities. At least half the states today allow the dynasty fund unlimited or very lengthy timespan.

Assets in the Trust

Your beneficiaries might not need to pay estate taxes, but they will pay income taxes if the trust earns any income. Therefore pick assets such as tax-free municipal bonds or growth stocks that don’t pay dividends. You could also transfer your life insurance policy to the trust and have the policy earnings pay off other taxes or debts that occurred after your death.

Disadvantages to the Trust

With a dynasty trust, you have the most control over the assets and who benefits from them. By contrast, your beneficiaries have very little control over the trust. When you die, the trust will be overseen by a trustee (usually a bank or trust company) who will follow your directions. Either the trustee or beneficiaries can distribute the money, but only according to the terms you set for the trust. Your great-grandchildren and later generations might resent that someone they never met is controlling the trust for them.

Dynasty trusts are irrevocable. Therefore you cannot make any changes to the beneficiaries or the terms of the trust once it’s been set. If your beneficiaries’ financial or family situations change, the trust might be useless to them. So choose your beneficiaries wisely and allow for future negotiations with your terms.

Let Us Help You

Our team hopes you have a better understanding of how to use a dynasty trust to grow wealth and benefit future generations. At Tanko Law, we help Montana residents with their estate planning and probates since 1995. Our website gives even more details on dynasty trusts and other trusts to protect your assets. Our attorneys will gladly answer any other questions you have and will help set up a trust for you.

For a free consultation, call us at (406) 257-3711.

What Happens During Probate?

Tue, 06 Feb 2018 11:51:51 GMT

“Probate” is an ominous sounding term that comes up whenever you have to settle the estate of someone who has passed away. It can be a long and frustrating process, but in the end, all it means is that the courts are making sure your estate is in legal order. We live in a complex society where taxes and property are closely regulated, which can make passing things on to your heirs tricky.

So how does probate work? It all starts with authenticating the will and moving on from there. Learn all about the probate process, what happens at each step of the estate settlement, and why it’s always a good idea to have a probate lawyer.

Starting the Probate Process

The probate process begins as the court authenticates the will of the deceased. If there is a will, the judge will verify its authenticity, and will confirm that it is the most recent and valid will that was signed and filed before the decedent passed away.

The Estate Representative

Every estate must have a personal representative to oversee all of the important affairs. Often, but not always, this will be the person chosen by the decedent to administer their will when the will was written. If there is no will left behind, it will generally be the next of kin, appointed by the court.

Accounting for Assets

At this step, the personal representative must locate and account for all of the assets of the decedent, both those specifically stated in the will, and any others for which the estate will need to account. Generally speaking, anything with real material value is considered an “asset,” from antique furniture to wedding rings and family heirlooms.

Next, the assets, pending circumstances may need to be properly appraised for their value as of the date of death. This can be done by hiring appraisers or using account statements left behind.

Identify Creditors and Pay Bills

The decedent’s creditors will need to be repaid from the estate before any assets are divided. Often, publishing a death notice is required in the local papers to alert creditors. At this point, any creditors have a limited time to make a claim for owed funds against the estate.

Any final bills left behind then need to be paid, including claims from creditors. If a claim isn’t believed to be valid, it can be rejected. At this point the creditor must petition the court to determine its validity.

Income Tax

Now, the final tax returns for the decedent must be prepared and filed by the personal representative. This will reveal whether an estate tax is owed, and any taxes whether personal or estate must be paid from the estate funds. Assets may be liquidated to accomplish this. Normally, the estate has 9 months to pay estate taxes.

Distributing the Rest

Finally, the rest of the estate will be distributed to the beneficiaries. After this is done, the estate can be finally closed.

Working with a Probate Lawyer

The probate process seems simple, but there are a lot of complexities that can arise, and it’s best to have a probate lawyer in your corner to take care of these issues. For example, heirs may challenge the will, claiming the right to certain assets. A creditor may try to collect more than you think they are owed.

The right probate lawyer can make the difference between a stressful and complex process, and a smooth estate closing. Learn more about the probate process , and call Tanko Law for a consultation and help today.

Are You Too Young to Have a Will?

Tue, 30 Jan 2018 11:56:19 GMT

“Am I too young to write a will?”

It’s a common question, and all too often what it really means is, “I’m only in my 20s or 30s and I really don’t want to think about or face my own mortality just yet.” It’s often couched in excuses like not having that many assets yet, or not having the experience to know how to do it right, but generally, it’s all back to the “facing mortality” issue.

While sometimes you may be legally too young to file a will, it’s never too early to start thinking about your estate plan and getting your life in order. Learn whether you are ever too young to have a will, and why it’s always a good idea to secure the services of an experienced estate planning attorney .

Am I Too Young to Have a Will?

Every state is different, but in general you will need to be at least 18, a legal adult, to be considered of sound mind and legally responsible to file your last will and testament. Once you reach the age of legal adulthood, however, there are no restrictions on when you can write your will, except for mental incompetence for one reason or another.

When Should I Write a Will?

The decision when to write a will is really a personal one and will be different for every person. If you think you’re too young to get your house in order, however, consider that Cory Monteith of the popular show Glee died at the age of 31. Anton Yelchin of Star Trek fame died at the age of 27. Paul Walker from Fast and Furious was 40.

The answer is, you’re never too young to have a will and make sure your final wishes are followed.

Determining When to Write a Will

Even people of moderate means can have assets they want to dispose when they pass away. The first step in determining if you should write a will is to figure out what your assets are. These can be anything from a house to savings accounts, from investments to a car, to things like your blogs, photos, music, social media accounts, video games and even collectibles. That Fender Stratocaster, Meerschaum pipe collection or that original 1974 copy of Dungeons & Dragons in your bookcase could have real value.

A will allows you to state your wishes as to whom you wish to gain access to these things when you die, and how they will be distributed.

How to Write a Will

The first thing to do is catalog all of your assets, make a list of beneficiaries, and simply state who should get what. That’s the beginning and the basis for the whole thing, and you can do that on your own. The next step is to call on the services of a qualified estate planning attorney like Tanko law.

We have helped people across Montana with their estate planning, wills and trust needs for many years, and we’re ready to help you as well. Give us a call for more information and a consultation today!

Can Medicare Seize a Trust?

Wed, 18 Oct 2017 11:59:56 GMT

The idea of placing a loved one in nursing care is an uncomfortable one for many people, for good reason. First, you’re trusting strangers — medically-qualified healthcare professionals but still strangers — with the day-to-day and long-term care of your beloved mother, father or elderly relative. Second, there are horror stories about nursing homes, like taking the resident’s property and selling it off to pay for an other’s needs, leaving your family member with nothing.

Some people have turned to the idea of living trusts in an effort to avoid these things. You may wonder, justifiably so, “Can Medicare seize a trust?”. Learn about how Medicare and Medicaid work in conjunction with trusts to protect your senior relative, and how a qualified Montana trusts attorney can help.

Medicare vs. Medicaid

The first thing to establish is that there is a difference between Medicare and Medicaid. Medicare is a form of health insurance available to seniors, paying for rehabilitative care for up to 100 days and only so long as the person is making rehabilitative progress. Medicare, like any insurance plan, has copays and deductibles that have to be paid. Without supplemental insurance, these can be substantial and can create financial difficulties. Medicare Advantage HMOs can help to offset these, depending on the individual plan.

Medicaid, on the other hand, is supplemental insurance designed for low-income recipients and can help to pay for long-term nursing care, but only if the senior in question meets strict criteria and is qualified. Medicaid only kicks in if the person has limited assets and a very low income. The law requires that existing assets be spent down until the eligibility threshold is met.

Spending Down Assets

It is this “spending down assets” requirement that generates the stories about homes and estates being seized. The rules for how these assets can be spent can be very tricky and complex, and making the wrong move can actually put you at odds with the IRS, a position in which nobody wants to find themselves.

Will Medicare Seize a Trust?

The answer to this question, quite simply, is no. Medicare does not seize or attach anything. Setting up a living trust can sometimes offer certain protections against a loss of assets, but it can also remove you from eligibility for Medicaid, especially if it’s not arranged properly. You need to be aware of all of the relevant laws and receive the best possible consultation when moving forward.

Generally speaking, you will only be permitted a very minimal amount of funds for personal uses while in a long-term nursing care. The majority of your assets must be used for your actual day-to-day care.

How Can I Protect My Assets?

The best way to protect your assets against the expenditure requirements is with the help of an experienced Montana trusts attorney. At Tanko Law , we have many years of experience setting up wills, trusts and all aspects of estate planning. Give us a call today for more information, and get started protecting your assets and planning your estate.

Who Receives Your Property if You Die Without a Will in Montana?

Wed, 04 Oct 2017 12:07:12 GMT

You might be surprised how many people don’t make the proper plans for what happens to their property when they pass on. In fact, it’s estimated that 70% of people don’t make any estate plans whatsoever. It doesn’t mean that they aren’t concerned about their family and friends; it just means that they didn’t want to think about end of life plans until it’s too late. What happens if you die without a will in Montana?

When you die without a proper estate plan, your possessions and assets have to go through probate in order to be distributed among your living heirs. This can be a complicated process and it’s overseen by courts. Learn who receives your property if you die without a will in Montana, and how Montana probate laws function to ensure the disposition of your estate.

Probate Laws if You Die Without a Will in Montana

Montana probate laws exist to help people who are in need of determining how to distribute assets after a loved one dies without a will. Certain aspects of these laws are pretty straightforward, and they depend on who the survivors are. If there is only a spouse, for example, the spouse is entitled to the entire estate. If the survivors are a spouse and children of both the spouse and the deceased, again, the spouse gets all the property.

If the decedent’s parents are alive as well as the spouse, the spouse gets $200,000 plus 75% of the balance of the estate, and the rest goes to the parents. If there is a spouse and children from a previous marriage, and stepchildren, the spouse gets $150,000 plus 50% of the balance. Children get 50% of the balance. Stepchildren aren’t entitled.

The laws can get more complex if there are others left behind—grandchildren, grandparents, siblings and other relatives, depending on which relatives are still alive.

The Complexities of Probate

Probate laws are very complex, and they’re being revised all the time to deal with unforeseen circumstances. These statutes, overall, are known as the Montana Law of Intestate Succession. For example, laws have to deal with what happens when one member of a business dies, when that person was one of multiple owners of the business. There are also rules regarding the survival of heirs, for out-of-state property, contractual agreements, what happens if there are no heirs, when the only heirs are minor children and more.

Avoiding Probate

The best way to avoid probate is to have a solid estate plan in place. When someone dies without a will, the courts may take the desires of the surviving heirs into account, but they are not bound by law to do so. It’s important, in such cases, to have help from an experienced and qualified Montana probate attorney.

The right attorney can help you to create an estate plan that will avoid probate , frustration and headaches for your heirs at one of the most difficult time of their lives. If you are facing probate, an estate planning lawyer can ease the burden and clarify the process. If you need help in dealing with such an estate issue, contact Tanko Law today.

The Legal Rights of Surviving Spouses

Wed, 27 Sep 2017 12:09:52 GMT

In the vast majority of cases, when someone passes away, their spouse becomes the legal heir to their entire estate. There are, however, exceptions to this rule. In some cases, a spouse may even have to fight to get the property to which they should rightly be entitled. There are a number of probate laws surrounding these issues, and they can get quite complex.

A little knowledge goes a long way. Understanding your legal rights can help you navigate the challenges ahead and take the necessary steps to protect yourself during the probate process. Get informed about the rights of surviving spouses when handling the estate of a deceased loved one, and discover how a Montana probate lawyer can assist you.

Is Montana a Community Property State?

The first question the courts will look at is whether the property is communal. Montana does not recognize community property, which means that everything in a marriage is not jointly owned in this state. The state does, however, recognize marital property, which is acquired after the couple’s union. This can create some complications in dividing the estate.

Dealing with Property Ownership

In Montana, if there are no other surviving heirs, the spouse is generally entitled to 100% of the estate when no specific will is left behind. If the spouse is one of several heirs, they will be entitled to a set amount of money, with a percentage of the estate awarded after that and the remainder allocated to other descendants, such as the deceased’s parents and children from prior marriages.

This portion of the estate to which a surviving spouse is directly entitled is known as an elective share . This provision ensures that a spouse cannot be entirely disinherited, protecting their legal rights—especially in situations where the other surviving family members may hold a grudge against the spouse. The elective share applies to all assets in the estate unless a separate written agreement specifies otherwise.

Non-Estate Assets

Some people leave behind assets that are not technically a part of the family estate. These can include insurance policies, designated beneficiaries on bank or investment accounts, businesses and the like. These are called non-probate assets and, in such cases a surviving spouse has no claim to the assets in question. There can be exceptions to these rules, and the issues can get complicated, as in a business where the decedent was one of two partners.

Hiring a Montana Probate Lawyer

Any time you’re dealing with closing an estate, no matter how solid the estate plan seems, your best bet is always to work with a qualified and experienced Montana probate lawyer . A probate attorney can guide you through the complexities of estate management and closing, and can protect the legal rights of surviving spouses throughout the entire process.

For many years, the probate attorneys at Tanko Law have helped people deal with the difficult and stressful process of handling estate closings. We are here to ensure that the estate is equitably distributed, and that you are protected every step of the way. Give us a call to discuss your needs today!

Estate Planning 101 for Singles

Wed, 30 Aug 2017 12:17:16 GMT

Estate Planning 101 for Singles

Most of the time when people think about estate planning, they think about the exceptionally wealthy, or about married couples or those with defined heirs like children. However, estate planning can be very important to single people as well, and the approach singles take to end-of-life planning have to be a bit different than the steps taken by couples.

Even if you don’t have a spouse or kids, you have assets that will need to be protected, and the taxes on your estate will generally fall on someone’s shoulders. In addition, there are important decisions to be made about medical needs and burial plans. While complex, it’s also vitally important. Let’s take a look at the basics of estate planning for singles, what you need to consider, and how an estate planning attorney can help you make the right choices.

Estate Planning for Singles

Singles have a lot of choices to make and a lot of things to consider when it comes to making the right decisions. Estate planning for singles is in many ways more complex than for couples. You’ll need to designate beneficiaries, deal with control of your assets, handle burial planning, powers of attorney, living wills and more.

Your Will

The will is the core of your estate plan. It allows you to maintain control over how your assets are distributed. If you’re recently single and you have children, you can name guardians for them and set up trusts to ensure they’re taken care of. Without a will, the courts will determine how everything is distributed, which may not be in the best interests of those left behind.

Power of Attorney

A power of attorney is essential to your late-life planning. You’ll need someone who is able to make financial decisions for you if you become unable to do so, like Alzheimer’s, dementia, or physical malady that renders you incapacitated. For a married person, the spouse often takes this on. For singles, you’ll need to find someone you can trust with your financial well-being.

Beneficiaries

Life insurance and retirement assets can be essential to handling your final concerns like funeral and burial costs. However, someone has to serve as a beneficiary for these things. You’ll need to choose who gets them and ensure that it’s someone deserving who will get the best use out of them.

Medical Concerns

What happens if you become incapacitated and unable to make important medical decisions? A living will can cover some aspects of this, but things always come up that you didn’t consider. Think about a medical power of attorney , someone you trust with your life to make those decisions.

Taxes

Most people don’t have to worry about estate taxes — they only apply if your estate hits a certain level of value, which is in the millions. There are a lot of factors that go into tax exclusions for estates, and you’ll need solid legal help to make sure these issues are covered, if any.

Hire an Estate Planning Attorney

Your best bet to ensure your estate planning is covered is to work with a qualified estate planning attorney. Call Tanko Law for help and advice today!

3 Hidden Risks of Joint Tenancy to Avoid Probate

Wed, 30 Aug 2017 12:14:02 GMT

3 Hidden Risks of Joint Tenancy to Avoid Probate

Joint tenancy, also called joint tenants with rights of survivorship or JTWROS, is a means by which couples and business partners often try to avoid probate court when one of the two die. It offers equal rights to all assets without the need to go through legal battles to cement them in the event of a death.

However, it’s not a magical way to get a free ride, and there are a number of risks involved that many people don’t consider. Learn the hidden risks of joint tenancy, why this road may not be your best option to avoid probate , and how an estate planning attorney can help you.

Risks of Joint Tenancy to Avoid Probate

Joint tenancy can help to avoid probate. Usually when someone dies without a solid estate plan, the courts get involved to determine whether the will is valid, and to determine any assets and liabilities possessed by the deceased and how they will be allocated. This process can take weeks or even years if the estate is complex.

JTWROS can automatically bypass these issues and avoid probate by quickly transferring assets and liabilities to the surviving partner. This is a huge advantage. However, there are also risks of joint tenancy, including frozen bank accounts, unstable relationships, and the selling off of the assets.

Unstable Relationships

If you have a volatile relationship with your partner, it could pose problems with joint tenancy unto itself. Joint tenancy requires complete agreement on any aspect of the asset or business in question. This means that while both partners are alive, you need to be able to work seamlessly together as a team. If you can’t, you may not want to consider this option.

Frozen Bank Accounts

If the deceased person is heavily in debt when they pass on, probate courts may step in regardless of joint tenancy. In fact, they might freeze your accounts to stop you from liquidating assets in an effort to avoid paying your debts. If there’s any question about the nature of liabilities, this is a possibility.

Control of Assets

If you have intentions for the future of your assets or business after you die, joint tenancy is not necessarily the way to go. When you establish joint ownership, upon your death your partner gains complete and unfettered control over the asset in question. Your desires at that point become null and void. Your partner can bequeath the asset to someone else. They can sell it off for any reason. They can do whatever they like with it.

For this reason, joint tenancy is not always the best idea if you’ve got plans for the future of your assets after you pass on.

Estate Planning Attorneys

There are many alternatives to JTWROS, including split ownership of assets, passing your assets to your heirs when you die, or allowing the other partner to access their portion of the assets when they pass on, while protecting your part.

The right estate planning attorney can guide you through the best decisions for you. If you’re in Montana and need help, call Tanko Law for help avoiding probate without the risks of joint tenancy today.

How Can You Avoid Probate in Montana

Fri, 09 Sep 2016 12:21:31 GMT

Probate court proceedings can be a painful, costly process for all involved. Probate courts handle the transference of a deceased person’s assets to the inheritors. Families and friends must sit through long sessions of legal discussions and confusion surrounding the intent of wills. Various states have developed alternatives to probate court proceedings in which individuals can avoid probate altogether. Tanko Law, your local Montana Probate Attorney, has compiled a list of ways to circumvent probate in Montana.

Create a Living Trust

As a Montana resident, you can create a living trust for nearly every asset you own, allowing your loved ones to avoid probate. First, you need to have a legal professional design a trust document on your behalf. In the document, you need to name a successor trustee to take over the trust upon your death. As a final step, you need to name yourself as a trustee on your own trust. This will allow you to control your own living trust while you’re still alive. Once you pass, the successor trustee will take control of the trust and the beneficiaries of the trust can receive your assets without a probate court being involved. Tanko Law provides a comprehensive Trust Estate Plan with each of their Trusts that cover your needs completely, including all necessary health care documents.

Set Yourself Up for Joint Ownership

You can legally make your possessions jointly owned by another individual. To avoid probate, the joint ownership must involve “the right of survivorship,” which means the jointly owned property is entirely transferred to the other involved individual once you die. Paperwork is necessary to prove the property belongs solely to the surviving owner.

In Montana, this form of joint ownership is known as joint tenancy. When an individual dies, property of a joint tenancy agreement passes to the surviving owner. Each tenant in joint tenancy must own an equal share of the property in question. This style of ownership is often convenient for couples who are acquiring vehicles, real estate and bank accounts.

Bank Accounts with Payable-on-Death Designations

For Montana residents, you can turn your normal bank account into one which will avoid probate proceedings. All you need to do is add a “payable-on-death” (POD) designation to your original account. With this setup, you are still in charge of all the assets in your account and the beneficiary cannot access the money. After your passing, however, the successor on the account can access all the money in the account and claim control over it without a court becoming involved.

What about Your Stocks and Bonds?

You can apply a transfer-on-death (TOD) form to your stocks and bonds in Montana. Much like the other scenarios discussed above, TOD registration requires you to name a beneficiary. At the time of your death, the beneficiary will immediately receive all the stocks and bonds which you’ve registered with TOD forms. The inheritor communicates directly with your brokerage company to receive the assets, and no probate court needs to be involved.

Contact Tanko Law Montana, Your Montana Probate Attorney, For Assistance

The issue of inheritance is stressful and oftentimes convoluted. Tanko Law Montana hopes that one of the techniques mentioned above appeals to you in terms of avoiding probate proceedings. For any help you need in setting up plans for your posthumous finances, contact Tanko Law , your trusted Montana Probate Attorney, today.

Protect your assets in Montana

Mon, 18 Jul 2016 12:26:53 GMT

Options for Protecting Your Assets in Montana

Lawsuits, injuries, catastrophic losses, market downturns — anything can happen at the drop of the hat. Without proper asset protection , your most precious resources and the wealth you had built over decades could all be jeopardized. These losses could impact your entire family, going down many generations that you had intended to endow with opportunity.

Luckily, we are not the first people to face these risks. Since Lloyd’s of London first began to see sailors trading slips of paper with underwriters , human society has been seeking ways to protect our assets and reduce our risk.

You can take advantage of the evolution of finance and law to shore up your risk of loss and protect your most critical assets against the unforeseen. Here are three ways how:

1. Incorporate Your Ventures

Your first step is to separate your cash flows to prevent one from affecting the other if you have not done so already. Forming a limited liability company, S corporation or similar entity can shield your personal assets against business losses.

Intermingling business and personal accounts mean that a bad day at the office could affect your personal bank statement. Worse than that, a lawsuit from an employee, creditor or competitor could put all your personal assets at risk.

Prevent these potential issues by working with a Montana business attorney to form an airtight legal structure for your business followed by sound accounting practices.

2. Extend Your Insurance Coverage

Medical insurance, homeowner’s insurance and life insurance are a given these days, but many people fail to consider other insurance products that could help them greatly in the event of the unforeseen.
One of the most useful of these products is long-term care insurance. General medical insurance and public programs like Medicare can only cover so much. These limitations mean that people who have major health issues like alzheimer’s or a traumatic brain injury could be facing million-dollar healthcare costs every year.

Long-term care plans protect against these losses. However, make sure to review exactly what it will and will not cover to ensure you get your money’s worth.

3. Trusts and Estate Planning

Without a doubt, estate planning is the most critical form of asset protection because it concerns all of your assets. Since your posthumous wishes can only be interpreted from legal documents, ensuring that your will and any needed trusts are set up properly is paramount to seeing those wishes honored.
Since they protect assets from going through probate court and shields them from creditors, forming trusts can safeguard the bulk of your assets. Irrevocable trusts offer the most protection from creditors, but must be formed correctly to be legally viable. Other types of trusts can be accessed or modified during your life while still offering moderate asset protection compared to holding them liquidly.

Reviewing Protecting Your Assets with a Montana Estate Planning Lawyer

In addition to irrevocable trusts and incorporation, you may have a host of options at your disposal to protect assets from falling into unintended hands. Review your options today with a Montana estate planning attorney to ensure that your assets are protected and entrusted to the right parties at all times, even after your death.

Call (406) 257-3711 to start protecting your assets today.

Estate Planning for Tax-Deferred Plans

Thu, 09 Jul 2015 12:32:18 GMT

Retirement accounts come in many different forms and are available to nearly every employee. Some retirement plans are known as “qualified plans,” the most common being employer sponsored 401(k) plans, profit sharing plans, defined benefit plans, and employee stock ownership plans[i]. Other retirement options include qualified annuity plans, tax sheltered annuity plans, 403(b) plans, traditional IRAs, Roth IRAs, and SIMPLE IRAs[ii]. The retirement options pose different challenges for those wanting to plan their estates. And no account is too small to ignore.

Estate planning for tax-deferred plans is complicated by several factors. IRAs and tax-deferred retirement accounts allow for compounding of principal on a pre-income tax basis. That wealth, however, is significantly reduced when offset by taxes paid when distributions occur. Compared to non-retirement assets, IRAs and retirement plans are often governed by pre-printed plan documents, which dictate when, how, and by whom distributions may be made, thus, limiting the options for allocating this wealth. Conversely, most non-retirement assets may be disposed of any time, without restrictions imposed by a plan administrator. Disposition of non-retirement assets is usually accomplished through the use of a Will or Trust drafted with impeccable detail. For surviving spouses, they may rollover tax-favored retirement accounts to further defer income taxes, but non-spouse beneficiaries are normally limited to receiving those benefits over their remaining lifetimes.

Retirement assets are also includible in your taxable estate for federal estate tax purposes, but may not necessarily be available for payment of the estate tax liability, expenses of administration, or creditor claims. Non-retirement assets typically must be liquidated in order to pay estate taxes, creditor claims and the like, sometimes resulting in an unintentional, but inequitable distribution or your estate. Without careful planning, your personal representative or trustee could be forced to liquidate your estate to satisfy your claims. Section 2002 of the Internal Revenue Code states that it is the personal representative of your estate who is primarily liable for the payment of federal estate taxes, even if the tax is principally generated by non-probate assets, such as retirement account, jointly titled assets, and beneficiary designated assets. Section 2207 does provide the personal representative with power to seek recovery of proportionate shares of the estate tax from recipients of non-probate assets, but that right too can be limited by Wills, Trusts, or state law.

Today, estate planners have several tools available to minimize income taxes, plan for estate taxes, and equalize distributions of retirement accounts. Section 2010 of the Code permits the use of tax-favored plans towards the decedent’s unified credit (presently $2,000,000.00) for non-spouse beneficiaries. A participant may also provide income for a surviving spouse from the retirement account by using a “credit shelter trust,” but that benefit must be weighed against the income tax deferral. Differing life expectancies between the surviving spouse and remaindermen beneficiaries might result in more tax being paid over the life of the retirement plan. Section 691(c) of the Code does provide some relief by allowing an income tax deduction to the beneficiary of a plan as long as the plan is included in the decedent’s taxable estate. Disclaimers are another great tool to alter asset distributions and utilize the full unified credit. Disclaimers are completed by beneficiaries who do not wish to receive an asset designated for them, thus, causing the asset to be distributed elsewhere pursuant to the decedent’s estate plan or applicable retirement plan. IRS regulations also allow the use of trusts to allocate retirement assets among heirs rather than being limited by inflexible plan documents.

What’s important to remember is that it does not take very long to accumulate a retirement account. And with any type of wealth, you’ll want to consider estate planning to effectively and efficiently manage that wealth. Estate planning attorney Brian C. Tanko can help you with all your estate planning needs.

[i] Qualified retirement plans are governed by §401(a) of the Internal Revenue Code of 1986, as amended, (hereafter the “Code”).

[ii] Qualified annuity plans are governed by §404(a)(2) of the Code. Tax sheltered annuity plans are those plans sponsored by §501(c)(3) charitable organizations and otherwise meet the requirements of §403(b) of the Code. Individual Retirement Accounts (IRAs) are governed by §408 of the Code.

Montana Wills

Wed, 04 Feb 2015 12:33:49 GMT

Montana’s Uniform Probate Code governs wills throughout the state . Like other states, Montana mandates specific formalities that must be adhered to during the making of a will. Formalities are important procedures that give wills legal effect; without them, a will maker — called a “testator” — could make a will that is contrary to his actual intent.

Capacity

According to Montana law, testators must have testamentary capacity; that is, they must be of sound mind. Testamentary capacity means the acuity to comprehend the amount and nature of the property involved and the significance of executing a will. A testator must also have the ability to recognize the relationship to the individuals receiving bequests of property. Because minors may not adequately grasp these concepts, Montana requires all testators to be at least 18 years old.

Important Requirements

In Montana, a will must be in writing. This means a testator can either type or hand-write a will. Handwritten wills are called “holographic” wills and Montana recognizes them, regardless of whether they’re witnessed. However, for a holographic will to be valid, its material portions must be in the testator’s own handwriting and signed by the testator. Montana requires two competent witnesses to a will. These witnesses must sign the will within a reasonable time after watching the testator acknowledge or sign the will.

Self-Proving Wills

In Montana, a testator can make a will self-proving. For a will to be self-proving, a notarized affidavit must be executed simultaneously with the will and contain the signatures of both witnesses and the testator. Generally, if a will is not self-proving, one of the witnesses must testify in probate court to verify its authenticity. Thus, making a self-proving will streamlines the process and prevents having to track down witnesses who may have moved to another state .

Revocation

Montana law allows testators to revoke their wills in a number of ways. A testator may revoke a will by physically destroying it; that is, tear it up, burn it or cancel it, provided the intent is to revoke it. A testator may also revoke a will by executing a subsequent will that expressly revokes the prior will. Furthermore, a subsequent will that doesn’t expressly revoke a prior will, but has provisions that are substantially inconsistent with a prior will, may have the effect of revoking it.

For legal solutions for you, your family and your business, contact Brian Tanko at (406) 257-3711.