Estate Planning, Wills, Trust and Probate

Estate planning is the process of preparing your affairs so that your needs and wants are met when final distribution of your property is to occur.

Upon your death, someone is going to receive your property through either an inheritance document or through operation of Montana intestate law. We are skilled in reviewing your assets, conserving as much of your estate as possible from taxes and other costs and proposing a plan that will ensure that your final directions are carried out as you wish them to be.

Every state has laws that control the distribution of a person’s assets in the event he or she dies without a Will, or other written testamentary plan. Under Montana law, if an unmarried person dies leaving no descendants and no writing expressing his or her intention, estate assets will pass to the deceased’s surviving parents, in equal shares. If no parents survive the deceased individual, Montana law directs that all such property be divided evenly between or among siblings. If non-estate assets such as life insurance, IRAs and retirement plans have no designated beneficiary, these assets will also pass in the same manner. Many people provide for such plan proceeds to be paid to their estate, but then fail to prepare a Will identifying their successors. A simple Will expressing a thoughtfully considered distribution plan is usually preferable to Montana’s legislative mandate.

As for married persons with no substantial assets, no health concerns and no minor children, the need to prepare a Will may be less compelling. Most married couples own and hold their assets in joint tenancy with right of survivorship. Therefore, in the event of the death of one married person, all assets in joint tenancy will pass to the survivor without the need of probate or other complicated process. Even the title to the family residence is easily transferred to the surviving spouse upon the simple filing of an appropriate affidavit reciting the pertinent information. Inheritance tax is no longer imposed by the State of Montana and thus is no longer an issue.

Matters become complicated once children enter the picture. Now the Will preparation becomes a very important consideration. Every family with minor children needs the protection, guidance and direction that a Will provides. Parents need to discuss and decide who will be designated to act as Guardian of any minor children in the event of the death of both parents. In the absence of a Will providing such guidance, grandparents may compete for the right to raise the orphaned children. With the prevalence of second marriages, it is conceivable that four grandparent couples could seek to exercise control over the minor children. State agencies would likely be involved. In the absence of an expressed appointment by the parents of the children set forth in a Will, a custody battle could be the undesirable result. As a general rule, a Montana Court will confirm the appointment of the Guardian contained in the Will executed by the parent, or parents, thus precluding such custodial disagreement.

Just as significant for the protection of the minor children, and the peace of mind of the parents, is to have a Will that provides for the creation of a Testamentary Trust and the nomination of a Trustee to preserve, invest and ultimately distribute the family property upon the death of the parents. In most circumstances, family assets with any monetary value, including the family home, will be liquidated. For young families, the most valuable asset is likely to be a life insurance policy or policies on the deceased parent’s or parents’ lives. As attorneys experienced in the field of estate planning, we will not fail to suggest and ensure that new beneficiary designations are prepared and delivered to the family’s insurance agents which will provide for payment of the insurance proceeds to the Trustee designated in the Will. The same thoughtful planning also applies for the IRAs and retirement plans. With proper advance preparation, the proceeds of all family assets will, after liquidation, be gathered under the protection of the Trust.

A Will is a prospective document. It has no legal significance until the Testator dies. In order for a Will to acquire legal significance, the Will must be filed with the Clerk of Probate Court in the State of the decedent’s residency. Letters of Appointment will then be issued by the Probate Court to the person nominated in the Will to serve as the Personal Representative.

The rules of Probate are provided by the Montana Uniform Probate Code. This Code establishes that notice must be given to all heirs and devisees of the deceased, requires that public notice be given to creditors and prohibits an Estate from being completed prior to six (6) months from the date it is opened. The Code also establishes rules for determining the fees that are paid to the Personal Representative of the Estate, as well as the attorney who is hired to complete the probate process. These statutory fees are generous and, historically, have become the standard charge.

The paperwork required by the Probate process, the time involved and the costs and fees to be incurred are a genuine concern for families who face Probate. Because of the time delay, coupled with such costs and expenses, avoiding the entire Probate process has become the desired objective of families. The use of a Grantor Trust (see below) will generally allow a family to avoid the Probate proceeding entirely.

A Grantor Trust (often called a Living Trust) is a legal agreement that allows you, as the creator of the Trust (the Settlor or Grantor), to designate yourself to be the Trustee over the assets owned by the Trust. Ownership of the assets to be managed by the Trustee are transferred to the Trustee at the time the Trust is created. A Grantor Trust utilizes the Social Security Number of the Grantor who created the Trust so long as the Grantor serves as the Trustee. The Trust Agreement is the written document creating the Trust and which directs the Trustee exactly what the Grantor wishes the Trustee to do with the Trust assets.

At the time the Grantor creates the Trust, the Grantor transfers the assets to the Trustee to be managed according to the terms of the Trust Agreement for the benefit of the Trust beneficiaries. The Grantor can be and usually is the initial Trust beneficiary. The Trustee is charged with having fiduciary duties as established by the Montana Uniform Trust Code.

One of the advantages and purposes of a Grantor Trust is to give financial protection in the event of the incapacity of the Grantor. The Grantor Trust does away with the need for a Conservatorship which is a costly judicially imposed protective estate for the Grantor. More importantly, however, a Grantor Trust does away with the need for probate of the assets owned by the Trust at the time of the death of the Grantor. The Grantor Trust also avoids the need for probate of assets owned by the Trust in a foreign jurisdiction.

Upon creation of the Grantor Trust, the Trust will need to be funded with the intended assets. Such Grantor Trust will generally own one’s residence, other real property in the State of Residency, the Grantor’s investment accounts and bank assets. The Grantor Trust may also be named as beneficiary (primary or secondary) of life insurance policies, retirement accounts and annuities, time shares and real estate holdings in foreign jurisdiction. The assets owned by the Grantor Trust are simply managed as though still owned by the individual who created the Trust, i.e., the Grantor. Married couples can jointly create a Grantor Trust and transfer ownership of their assets to such jointly created Grantor Trust.

Once established, the Trust should be reviewed every few years and updated/revised if Grantor’s marital status changes, a child is born to or adopted in the family, a beneficiary dies, the Grantor changes his/her state of residence or Grantor’s financial status undergoes a significant change.

Because You May Want To...

  • Retire at a specific age.
  • Provide security for both spouses after retirement.
  • Provide security for an incapacitated family member.
  • Provide security for surviving spouse.
  • Relieve surviving spouse of estate management responsibilities.
  • Minimize probate and settlement costs.
  • Name guardians, conservators or trustees of minor children.
  • Assure continuity of farm, ranch or other business ownership.
  • Assist beneficiaries to get started in business.
  • Provide educational opportunities for beneficiaries.
  • Name a Personal Representative for the Estate.
  • Provide means for paying expenses of estate settlement, taxes and other debts.
  • Provide equitable (not necessarily equal) treatment of family members.
  • Transfer specific property to specific people.
  • Reduce income taxes by disposing of income property during life.
  • Transfer property during life by installment sale.
  • Provide for charitable bequests to favorite charities or organizations.

A Power of Attorney can be used to appoint another person or entity to act on the person's behalf who has become unable to act for him or her self. Such document may be used to assist in asset management situations or in situations providing for personal care or health care matters. Generally speaking, it is recommended that a person prepare Powers of Attorney at the time of execution of a Trust and/or Will.

Montana, and most states in this country, allow an individual to give direction to withhold life sustaining treatment when medical advice concludes that an incurable or irreversible condition exists with regard to a one's health. The execution of a written declaration so providing should be an issue addressed during an estate planning session with your attorney.

Sometimes it is necessary to protect someone’s personal and financial interests by creating a Guardianship and/or Conservatorship.

A Guardianship is a Court proceeding in which the Court appoints someone to protect the person physically, including providing food, clothing and shelter, when the person is unable to provide for themselves due to varying factors, which may include dementia or mental illness.

A Conservatorship is a Court proceeding in which the Court appoints someone to protect the person financially, which generally includes protecting assets, paying bills and applying for benefits for the person.

We are skilled in seeking the Court appointment of Guardians and Conservators for minors, incapacitated adults and the aging population.