Inheriting a House in Montana: Probate, Taxes, and Selling

You inherited a house in Montana - here’s what actually happens

Take a breath first. Nothing about the house has to be decided this week. The property does not disappear, the state does not seize it, and the mortgage company generally cannot demand instant payoff just because the owner died.

Montana is a friendly state to inherit property in. It has no inheritance tax and no estate tax, it authorizes transfer on death deeds, and it follows the Uniform Probate Code with an informal track that runs through the clerk of the district court without a hearing. What happens next depends on how the owner held title. And if you live out of state, which is very common with inherited Montana property, all of this can be handled remotely.

Does it go through probate?

Not always. The off-ramps:

• Living trust. A house held in a revocable living trust passes outside court. The successor trustee transfers or sells it directly.
• Transfer on death deed. Montana adopted the Uniform Real Property Transfer on Death Act in 2019 (MCA 72-6-404 and following). If the owner recorded a valid TOD deed before death, the named beneficiary takes the house without probate. Montana also had an older “beneficiary deed” law from 2007 that the uniform act superseded - deeds recorded under it still work, but new ones follow the 2019 act.
• Joint tenancy. A surviving spouse or co-owner takes title automatically, typically by recording a death certificate.
• Small estate affidavit. For estates of personal property worth $100,000 or less, successors can collect assets by affidavit 30 days after death. Montana’s court materials are explicit that this does not work for land or a house.

If none of those apply, a solely owned house generally goes through probate in the district court of the county where the person lived (Montana has no separate probate court).

The Montana probate timeline

Montana probate follows the Uniform Probate Code, mostly informally:

1. Filing (weeks 1-6). The will and application are filed. In routine cases the estate proceeds informally through the clerk of the district court, without a hearing.
2. Letters issued (month 1-2). The personal representative receives “letters” - the document banks, title companies, and buyers ask for.
3. Creditor period (months 1-5). Publishing notice to creditors (weekly for three weeks) opens a four-month claim window from first publication.
4. Administration and closing (months 4-12). Debts and upkeep are handled, the house can be sold, and the estate closes with a sworn closing statement in informal cases.

A straightforward informal estate commonly wraps up in six months to a year. Formal probate and disputes take longer.

Taxes when you inherit

The headline is simple: Montana has no inheritance tax and no estate tax. Voters repealed the inheritance tax effective for deaths after January 1, 2001, and the linked estate tax lapsed a few years later. You owe Montana nothing for inheriting. Federal estate tax only applies to estates above $15 million per person (2026), so the overwhelming majority of families never touch it.

The fact that actually saves people money is the stepped-up basis. When you inherit, the house’s cost basis for capital gains resets to its fair market value on the date of death. If a parent paid $85,000 for a house now worth $500,000 - a familiar arc in Bozeman, Missoula, or the Flathead - your basis becomes $500,000. Sell soon after near that price and there is little or no capital gains tax - decades of appreciation are never income-taxed. This is federal law and applies everywhere.

Also worth knowing: Montana has no sales tax and no real estate transfer tax, so the state takes remarkably little at any point in this process.

Can you sell during probate in Montana?

Yes, in most cases.

• Informal administration (the common case). Once the personal representative has letters, the Uniform Probate Code gives them broad power to sell estate property on the open market without a separate court order, unless the will restricts it. To buyers and title companies it looks close to a normal sale.
• Supervised administration. If the court is supervising the estate because of a dispute, a sale may need court approval, which adds time.
• Sold outside probate. If the house passed by TOD deed, survivorship, or a trust, the new owners of record sell like any other sellers.

Sale proceeds during administration flow into the estate first and are distributed to heirs once debts and taxes are settled.

If you live out of state

A large share of inherited Montana homes and land belong to heirs elsewhere. It works fine:

• Montana allows out-of-state personal representatives, and filings can usually be handled through a Montana probate attorney with minimal or no travel.
• The physical side - securing the property, insurance on a vacant house, hard winter freeze risk, clearing out belongings, and repairs - needs boots on the ground. Rural properties add wells, septic, and outbuildings to the checklist.
• A local agent experienced with inherited and probate sales becomes your proxy: checking on the house, lining up cleanout and contractors, advising on as-is versus fix-first, and running the sale while you manage things from home.

You do not need to relocate to Montana for months. You need one trustworthy local professional and a real number on the house.

What’s the house worth?

Every path - keep, rent, or sell - starts with an accurate value. Online estimates are least reliable exactly where inherited Montana properties live: original-condition houses, small-town markets with thin comps, and land where value rides on acreage, access, and water rights the algorithm cannot see.

You will want the fair market value at the date of death (that sets your stepped-up basis, so document it) and today’s as-is value versus its fixed-up value. The spread between those last two tells you whether repairs are worth it. A local agent can pull all of this for free.

Frequently asked questions

How long does probate take in Montana? A straightforward informal estate often takes six months to a year, with the four-month creditor period setting a practical floor. Trust assets, TOD deed property, and joint tenancy skip the process entirely.

Do I pay taxes on a house I inherit in Montana? No. Montana has no inheritance or estate tax, and federal estate tax only reaches estates over $15 million (2026). With the stepped-up basis, capital gains tax generally applies only to appreciation after the date of death.

Does Montana allow a transfer on death deed? Yes. Montana adopted the Uniform Real Property Transfer on Death Act in 2019 (MCA 72-6-404), which replaced the older 2007 beneficiary deed law. A TOD deed recorded before death passes the house without probate.

What happens to the mortgage? It stays attached to the house. Inheriting relatives can generally keep paying it - federal rules block the lender from calling the loan due in most family transfers - or it is paid off from the sale proceeds at closing.

What if my siblings and I disagree about selling? The personal representative controls the sale during administration, subject to fiduciary duties. Once heirs own the house jointly, any co-owner can ultimately force a sale through a partition action, though a negotiated buyout or agreed sale is almost always cheaper.