Settling Small Estates (MT)

Requirements

To use the small estate process, the following conditions must be true:

• The entire probate estate has a gross value <$100K
• At least 30 days have passed since the death
• No petition has already been made to the court to officially appoint a personal representative

In determining the gross value of the estate, you should value assets as of the date of death, and ignore any unsecured debts (but do subtract things like liens and mortgages). Do not include any assets that would not normally go through probate, such as community property with right of survivorship, assets with named beneficiaries (e.g., 401Ks, life insurance policies), and other standard probate exclusions.

Process

To use the small estate process:

1. Prepare a Small Estate Affidavit - it may be helpful to attach a copy of the death certificate and the will (if one exists)
2. Obtain possession of estate assets by presenting the affidavit to current custodians (this affidavit cannot be used to collect real estate)
3. Settle the estate in the normal way (pay obligations, distribute remaining assets)
4. If you are transferring a vehicle, file Form MV12 with the Motor Vehicle Department
5. If everything goes smoothly, no court involvement will ever be required

Considerations

Before paying any debts or making any distributions, be sure to account for any Family Entitlements in MT, which typically have priority over everything except expenses of the last illness, funeral charges, and any estate administrations expenses.

Even if the estate does not go through probate, you may still be entitled to MT Executor Compensation, and this compensation also has priority over most estate debts.

Estate debts have priority over most distributions in turn, so before distributing assets you should resolve any estate debts. If the estate makes any distributions beyond amounts set aside for family entitlements, unpaid creditors have the right to sue the recipients for repayment using those excess distributions. Consequently, even if the settlement process does not require you to publish a Notice to Creditors, you may want to follow MT probate rules for finding estate debts, since doing so may limit the time creditors have to pursue repayment.

If estate solvency is uncertain, an executor should consider going through official probate for the increased creditor protection it offers. Alternately, such uncertainty can sometimes persuade creditors to forgive a portion of debts, since they will want to avoid legal expenses as well, and may prefer to get something rather than nothing.

See also Making Distributions.

Requirements

You can use summary administration if the estate is worth less than the sum of:

1. The value of any homestead allowance, exempt property, and family allowance
2. Estate administration expenses
3. Reasonable funeral expenses
4. Reasonable and necessary medical and hospital expenses of the last illness

In determining the value of the estate, you should value assets as of the date of death, and subtract any secured debts such as liens or mortgages (but ignore unsecured debt such as credit card debt). Do not include any assets that would not normally go through probate, such as community property with right of survivorship, assets with named beneficiaries (e.g., 401Ks, life insurance policies), and other standard probate exclusions.

Process

To settle an estate via summary administration:

1. Submit to the court an Application for Informal Probate and include an official copy of the death certificate, an Acknowledgment Of Fiduciary Relationship And Obligations, plus pre-filled forms for Statement of Informal Probate and Acceptance of Letters.
2. Upon approval, the court will approve your "Letters" giving you authority to act as the estate personal representative
3. Submit to the court an estate inventory cover letter and attach EstateExec's Inventory Report
4. Use your "Letters" to collect estate assets, then disburse according the priority order listed in the Requirements above
(you do not need to notify creditors or publish a notice of death as for normal probate, since higher priority estate obligations will consume all estate assets)
5. Prepare a final accounting (consider using an EstateExec Final Accounting Report)
6. Prepare a closing statement (see below) and send it to all unpaid creditors and to all distributees, also providing a copy of the final accounting to any distributees whose interests were affected
7. Submit a Closing Statement to the court
8. If actions or proceedings involving you as the personal representative are not pending in the court 1 year after the closing statement is filed, your appointment as personal representative terminates