Planning Your Estate: What Assets are Subject to Probate?

Planning Your Estate: What Assets are Subject to Probate?

September 18, 2019

Tanko Law Montana

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.

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Brian Tanko brings over 20 years of experience as an attorney, CPA, and Certified Fraud Examiner to every estate plan. Schedule a consultation to discuss your situation.

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