Create a Living Trust in Montana

Create a Living Trust in Montana

by Brette Sember, Esq., May 2015

A Montana living trust may provide you with the control of and privacy for your assets you are seeking in your estate planning. There are a variety of benefits stemming from the use of a revocable living trust that may appeal to you.

Living Trusts in Montana

A living trust in Montana is a legal document created by the trustor. The trustor sets up the trust and places his assets in the ownership of the trust. When you create a living trust, (also called an inter vivos trust) you must select a trustee. The trustee is the person who manages the assets according to the terms of the trust, which directs that they be used for your benefit during your lifetime. Anyone can be your trustee, but most people choose to be their own trustee, staying in control of the assets. The goal is usually to place as many of your assets into the trust as possible to benefit the most from the protections it offers. Some assets, such as retirement accounts cannot be owned by a trust and must remain in your name. The revocable trust can changed by you at any time during your life and can even be completely eliminated if you wish. An irrevocable trust is different and becomes unchangeable once signed.

A successor trustee must be named to take over trust management after your death. The trustee will continue to safeguard the assets in the trust and pass them on your beneficiaries according to the terms of the trust.

Trusts do not need to go through the probate process to become valid, unlike a will which must be approved by a court and then put into effect. A trust can distribute assets immediately after your death if you wish, whereas assets passed by a will must wait for probate to conclude. Probate often takes many months and incurs the fees of an executor and attorney as well as court costs. Montana has enacted the Uniform Probate Code, so its procedures are streamlined, yet still are in no way immediate. Montana provides for a streamlined, less expensive proceeding for estates worth less than $50,000, in which case a trust would likely be more expensive. If you own property in more than one state, a living trust allows you to avoid probate proceedings in all of the states where your property is located.

The assets in a Montana living trust are subject to a spouse’s right of election. This gives a surviving spouse the right to inherit a certain percentage of the deceased spouse’s estate even if the surviving spouse has been disinherited.

Do I Need a Living Trust in Montana?

One of the protections offered by a living trust in Montana is privacy. The terms of the trust, including the assets in the trust and the names of the beneficiaries, do not become public record and do not have to go through a court process. Wills, in contrast, are public record and require a court process. In addition, a trust is much more difficult to contest, ensuring that your plan will remain in place.

When you create a living trust in Montana you also remain in complete control of your assets. While you are alive, you live in your home, spend your money, make investment decisions, and can give away or dispose of anything you want. Although the assets are owned by the trust, this does not change your life. After you die, you are able to maintain control over the assets as well by dictating in the trust when and how they will be distributed to your beneficiaries. You can choose immediate distribution or select future dates. If you use a will to pass your assets, they are transferred once probate is concluded.

A revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary. Your financial life is protected by the trust.

Living Trusts and Estate Taxes in Montana

Estate taxes are often a reason people cite for using a living trust. In fact, a living trust does not protect your assets from estate taxes. While Montana does not have an inheritance tax, there is a federal estate tax applied to estates worth more than $5 million. It is possible to avoid estate tax by using an AB trust, sometimes called a martial or QTIP trust, to pass assets from the deceased spouse to the surviving spouse. Living trusts also will not protect your assets from Medicaid spend down laws or from creditors.

How to Create a Living Trust in Montana

Creating a living trust in Montana occurs when you sign a written trust document in front of a notary and then transfer the ownership of your assets to the trust. The trust is not complete or effective until ownership is transferred. A living trust, when executed properly, can provide a variety of protections and benefits. A revocable living trust may be right for you.

LegalZoom can help you create a living trust online in three simple steps. The process begins by completing a simple questionnaire. LegalZoom reviews your answers and sends your complete living trust package by mail.