How to Create a Living Trust in Montana

Creating a living trust in Montana is a strategic move for efficient asset management and a smooth transfer of wealth to beneficiaries. A living trust is a legal document that places your assets into a trust for your benefit during your lifetime. It specifies how these assets should be distributed upon your death. Unlike a will, a living trust can help you avoid the often lengthy and costly probate process. In turn, this provides privacy and potentially saves heirs time and money. In Montana, setting up a living trust involves several key steps, including selecting a trustee, transferring assets into the trust and clearly defining the terms of asset distribution.

For expert guidance with your estate planning, consider working with a financial advisor who can help you with all of your financial needs.

Creating a Living Trust in Montana

Creating a living trust is pretty similar in most states, but some unique laws and procedures apply for the trust to be valid. It generally involves these steps.

1. Select an individual or joint trust. Individual trusts are generally better for single people, while joint trusts are great for couples. Couples can use two individual trusts, but a joint trust can save money by combining assets into one legal document.
2. Take inventory. Inventory your property to determine the trust’s assets.
3. Select a trustee. This party will manage your trust. You can act as the trustee before death, but you’ll have to select a successor trustee to oversee your assets after you die.
4. Create a trust document. You can create a trust by hiring an attorney or using online software.
5. Sign the document. To be valid, you must sign in front of a notary public.
6. Fund your trust. Transfer your desired assets into it.

What Is a Living Trust?

A living trust is a legal document that details the transfer of your property and assets to your beneficiaries.

This estate plan is distinctive because it goes into effect as soon as you create it. You can still be alive and either select a trustee or act as the trust’s trustee. If you act as the initial trustee, your successor trustee will carry out your wishes and distribute your property to your beneficiaries.

There are two types of living trusts:

• Revocable trusts. With revocable trusts, you can alter or revoke the provisions within the trust.
• Irrevocable trusts. An irrevocable trust is essentially permanent. Provisions of an irrevocable trust can be changed only if all the trust’s beneficiaries approve the change.

How Much Does It Cost to Create a Living Trust in Montana?

You can create a living trust by using an online program, or you can hire a lawyer. The method you choose will determine how much you spend.

If you prefer DIY estate planning, you may only spend a few hundred dollars. This process could be riskier, however, since it requires more research and detail.

If you prefer professional guidance, a lawyer will be more expensive. A lawyer may cost you $1,500 or more, depending on the attorney you choose. ¹

While the cost of creating a living trust in Montana can seem daunting, the benefits often outweigh the expenses. A trust helps ensure the proper management of your assets in accordance with your wishes. A well-crafted living trust can also save your heirs time and money by avoiding probate.

Consulting with a financial advisor or estate planning lawyer can help you understand your best options so you can ensure your living trust meets your needs and goals.

Probate vs. a Living Trust in Montana

Living trusts offer a more private way to protect your assets by determining which assets go to which beneficiary.

An alternative is to go through the probate process. This is a public judicial process in which court officials authenticate a deceased person’s last will and testament. The court then determines how to distribute the decedent’s assets to any beneficiaries.

This process can take months and incur numerous expenses. Montana has enacted the Uniform Probate Code, which makes the probate process less time-consuming.

The state also has a simplified probate process for estates under $50,000. ² It may make more sense to use the probate process instead of a living trust.

Establishing a living trust has many advantages for protecting and distributing your property. You are able to establish a trustee and select beneficiaries while you’re still alive. You can also choose which assets and properties go to your beneficiaries and when.

Who Should Get a Living Trust in Montana?

Residents with both large and small estate plans can benefit from a living trust, though in some cases probate may be easier. The probate process will be even simpler for decedents with a net worth of less than $50,000.

You may also want to consider other estate planning documents, such as a will. Both living trusts and wills protect your property after you’ve died.

However, the two legal arrangements present key differences.

Living Trusts vs. Wills

A key distinction between living trusts and wills is that trusts give you control over your assets while you are still alive, but wills do not.

Living trusts take effect as soon as you create them, while wills are effective after your death. With a living trust, you can distribute property to beneficiaries while you’re still alive, but with a will, your beneficiaries will only receive assets after your death.

There are some key differences between living trusts vs. wills.

Living Trusts vs. Wills

Even if you do have a living trust, you’ll likely need a will to complete these specific tasks.

• Name an executor
• Offer instructions for taxes and debt
• Establish guardianship for minors
• Select managers for children’s property

Living Trusts and Taxes in Montana

During your estate planning process, it’s helpful to know whether Montana has estate or inheritance taxes.

Estate taxes may affect your living trust, and your estate size will determine your tax liability. Montana doesn’t have an inheritance tax or estate tax. However, a federal estate tax applies to those with estates worth more than $15 million ($30 million for married couples).

How an Advisor Can Help You Create a Living Trust in Montana

A living trust involves legal documents, but the financial decisions shaping those documents are just as important as the paperwork itself.

A financial advisor working alongside an estate planning attorney can help you approach the process more deliberately. This way, you can avoid any gaps that come from focusing solely on the legal side.

One of the first things an advisor can help with is taking a complete financial inventory before you meet with an attorney. Knowing exactly what you own, each asset’s titling and its current value gives the attorney the information needed to draft a more thorough trust document. Assets that are overlooked or left out of the trust may still go through probate, defeating much of the purpose of creating the trust in the first place.

Montana’s relatively streamlined probate process under the Uniform Probate Code means that for smaller estates, a living trust may not be the most efficient path. An advisor can help you run the numbers on whether the cost of setting up and maintaining a trust is worth it, given the size and complexity of your estate, or whether a simpler approach would serve your beneficiaries just as well.

For estates approaching the federal exemption threshold, an advisor can model how your assets are likely to grow over time. They can help you determine whether any proactive steps make sense now before current exemption levels potentially decrease in the future. Even though Montana has no state estate or inheritance tax, federal exposure is worth monitoring for larger estates.

Retirement accounts, which cannot be placed directly into a living trust, require their own planning conversation. An advisor can help you think through whether naming the trust as a beneficiary makes sense for your situation or whether directing those accounts to individuals directly produces a better outcome for your heirs from a tax standpoint.

Bottom Line

Whether you use a living trust, a will or probate, establishing an estate plan is necessary to protect your assets. Residents with small estate plans benefit from Montana’s simplified probate process, as well as no inheritance tax or estate tax. The probate process will likely be less expensive than creating a living trust. If you prefer a living trust, you’ll have more authority in deciding how and to whom your assets are distributed.

Estate Planning Tips

• Estate planning could be much easier with the help of a professional who can help you make sure everything is in line. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• You’ll also want to familiarize yourself with inheritance tax and estate tax provisions on a state and federal level. That way, you can determine if any tax exemptions apply to your estate plan. In many states, you won’t even have to pay a federal estate tax if your estate is under a certain monetary value.

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