Maximizing Estate Planning: Living Trusts in Montana

In estate planning and management, inheritance and property ownership are significant points. After your death, who your assets go to, and what the estate taxes will apply- such questions plague the thoughts of many in their life. Living trusts are helpful in this context.

In Montana, the Uniform Probate Code is in practice. This model law makes the state's probate process of hearings and paperwork less time-consuming. Still, living trusts are a good choice if you want a more straightforward estate inheritance process without any impact of probate laws. To apply for a living trust, Montana has specific regulations and requirements- let's learn more about them.

What are living trusts?

A living trust (or inter-vivos trust) is a legal document that signifies that the creator put their assets into a trust. There are three leading players involved here-

• The "trustor," "settlor," or "grantor."
• The "trustee"
• The "beneficiary"

The trustor puts their assets into a trust during their lifetime and assigns the trustee to manage it. They are also responsible for ensuring that the correct beneficiaries receive the assets upon the grantor's death.

A lot of people opt for the revocable living trust type. Here, they can change or cancel the agreement details anytime. You must name yourself the trustee to retain control over the revocable trust and the assets within your life. You must assign another person as the "successor trustee" in the agreement who will gain control over the trust after your death. They will later pass your estates to the people you name as your beneficiaries. In the case of married couples who open a shared living trust, the successor trustee gets control only if both spouses pass away.

An irrevocable trust, on the other hand, is a non-modifiable legal agreement. After all parties sign the irrevocable trust document, trustors lose control and ownership over the trust property.

It is worth mentioning that fully funded revocable trusts do not fall under probate administration. So, compared to wills, it is a more favorable option for people. Yet, it is a good idea to get a short will while having a revocable living trust. Include a "pour over" provision clause into the agreement regarding transferring miscellaneous assets you own into the trust. If minor children are beneficiaries, you can set a guardian for them.

How do you make living trusts in Montana?

Here is the primary sequence of setting up living trusts in Montana.

Select the type of trust.

Firstly, you must choose which type of living trust you will create- irrevocable or revocable. Moreover, consider carefully if you want to prepare an individual or shared living trust. The latter is usually helpful for married couples who transfer their assets into a joint trust with one shared agreement. Nevertheless, spouses can prepare their individual trusts with separate fees and clauses.

Choose your assets

Next, you must decide which assets you will add to the trust. Take a complete inventory of your real estate property and financial accounts in your name, like CDs/savings accounts, stocks, bonds, etc. Also, you should consider the tangible property you own, like artwork and jewelry.

Assign the trustee

It would help if you decided who to assign as the trustee for your trust next. You can choose multiple people, but it is best to keep this count low. While you are still alive, you can act as the primary trustee. The successor trustee can take over the trust’s management after your death.

Choose your beneficiaries

Following that, you should select your beneficiary, who will get ownership of your assets after your death. You can assign many loved ones as beneficiaries, including minor children.

Prepare the document.

Next, you should hire a professional attorney to draft the legal trust document.

Validate the documents.

Sign the deed for the living trust. Do so in the witness of an authorized notary public.

Fund the trust.

Next, you should add your owned assets into the trust to fund it. If your real property has different ownership details, rectify the title with proper paperwork to reflect your name as the owner. Take the help of a professional attorney with this process to avoid any errors.

Who is living trust in Montana best for?

People with both small and big estates can add their assets to a living trust in Montana. So, regarding property size, Montana residents have no major obstacle to saving their assets into a trust.

It is worth noting that the probate process is relatively simple in this state. You can pursue the regular legal process with little issues in this state. But getting a revocable trust is still a better option if you want to save time, reduce court costs, and retain control over your owned valuables.

Are wills better than living trusts?

Wills are a noteworthy alternative for people to protect their property and other valuables for selected beneficiaries. However, as the trustee, you will have more direct control over the trust while you are still alive, unlike wills, which go into effect only after death.

Also, contesting the details in a living trust after the trustor’s death is not simple. This protects the trust property from unauthorized access and allows it to go into only the assigned beneficiaries’ hands.

Do estate taxes affect the living trusts in Montana?

It is vital to consider how estate taxes affect your living trusts in Montana to prepare your estate plan accordingly. Typically, such taxes are measured per an estate's fair market value (FMV) instead of its original cost during purchase. After the trustor expires, any appreciation noticed within the estates will fall under taxable income. While most people can expect no probate process with living trusts, they still have to deal with some estate taxes for measuring the estate tax liability.

In Montana, there is no estate tax or inheritance tax. However, estates with a $11.4 million market value or more are subject to the federal estate tax. For married couples, estates worth $22.8 million or more are applicable.

FAQs

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult a qualified attorney for advice on your specific situation.