Jun 2017 AFR: 2.4%
Gift Annuity State Regulations

Montana


Intestacy


General Definition

Any part of a decedent's estate not effectively disposed of by will passes by intestate succession. Sec. 72-2-111.

Order of Distribution

The surviving spouse is entitled to the entire intestate estate if the decedent is not survived by a descendant or parent or if all of the decedent's surviving descendants are also descendants of the surviving spouse and there is no other descendant of the surviving spouse who survives the decedent. Otherwise, the surviving spouse is entitled to:

  1. The first $200,000, plus 3/4 of any balance of the intestate estate, if no descendant survives but a parent does;
  2. The first $150,000, plus 1/2 of any balance of the intestate estate, if all of the surviving descendants are of the surviving spouse and the surviving spouse has one or more surviving descendants who are not of the decedent;
  3. The first $100,000, plus 1/2 of any balance of the intestate estate, if any of the surviving descendants are not descendants of the surviving spouse. Sec. 72-2-112.

The portion of the intestate estate not passing to the surviving spouse passes in the following order:

  1. to descendants by representation;
  2. if there is no surviving descendant, to the decedent's parents equally if both survive or to the surviving parent;
  3. if there is no surviving descendant or parent, to the decedent's siblings and their issue by representation;
  4. if there is no surviving descendant, parent, or siblings, 1/2 to the paternal grandparents or the descendants of the paternal grandparents by representation; and
  5. 1/2 to the maternal relatives in the same manner as the paternal. Sec. 72-2-113.

If there is no taker, the intestate estate passes to the state of Montana. Sec. 72-2-115.

In any event, to receive assets, the beneficiary must survive the decedent by five full days. Otherwise, the beneficiary is considered to have predeceased the decedent. Sec. 72-2-114.

Will Qualifications


Common Law or Community Property

Montana is a common law property state.

Capacity

Any individual 18 years of age or older who is of sound mind may make a will. Sec. 72-2-521.

Drafting

A will must be in writing and signed by the testator or by the testator's direction. A will must be signed by at least two witnesses, each of whom must sign within a reasonable time after having witnessed either the signing of the will or the testator's acknowledgment of that signature or acknowledgment of the will. A valid holographic will does not require witnesses. To be a valid holographic will, the signature and material portions of the document must be in the testator's handwriting. Sec. 72-2-522.

Heirs

An "heir" is any person, including the surviving spouse and the state, whom are entitled under the statutes of intestate succession to the property of a decedent. Sec. 72-1-103(22).

Modifications

A will or any part thereof may be revoked by creating a new and valid will that revokes the previous will or part expressly or by inconsistency. A testator may also revoke or amend the will by burning, tearing, canceling, obliterating or destroying the will or any part of it. The testator is presumed to have intended the new supplement rather than replace an older will if the new will does not make a complete disposition of the testator's estate. Sec. 72-2-527.

If a new will revoked a previous will is later revoked by a revocatory act, the previous will remains revoked unless it is revived. The previous will is revived if it is evident from the circumstances of the revocation of the subsequent will or from the testator's contemporary or subsequent declarations that the testator intended the previous will to take effect as executed. Sec. 72-2-529.

Probate Process


Naming of Personal Representative

Persons who are not disqualified have priority for appointment in the following order:

  1. the person nominated by the will;
  2. the surviving spouse who is a devisee;
  3. the custodial parent of a minor decedent;
  4. other devisees;
  5. the surviving spouse;
  6. other heirs;
  7. the public administrator;
  8. 45 days after the death of the decedent, any creditor. Sec. 72-3-502.

To be qualified to serve as a personal representative, the person must be at least 18 years of age and not determined to be unsuitable by the court. Sec. 72-3-501.

Submission of Will

After the death of a testator and on request of any interested party, a person holding a decedent's will must deliver it to either another party that is able to offer it for probate or to the court. Willful failure to deliver a will may subject the holder to civil liability and/or contempt of court. Sec. 72-2-536.

Notifications

Within 30 days of the personal representative's appointment, he/she must provide notice of the appointment to the heirs and devisees, including the devisees in any will mentioned in the application for appointment of a personal representative. The information must be sent by ordinary mail to each of the heirs and devisees whose address is reasonably available to the personal representative. The notice must include the name and address of the personal representative, indicate that it is being sent to persons who may have some interest in the estate, indicate whether bond has been filed and describe the court where papers relating to the estate are on file. Sec. 72-3-603.

In cases of formal testacy proceedings and in any situation where a contested matter of the estate arises, notice of a hearing on any petition is required. The petitioner must provide notice of the time and place of the hearing. Notice must be given by mailing a copy of the notice at least 14 days before the time set for the hearing. Sec. 72-1-301.

Unless notice has already been given, the personal representative must publish a notice once a week for three successive weeks in a newspaper of general circulation in the county announcing the personal representative's appointment and address. The announcement must notify creditors of their need to present their claims within four months after the date of the first publication of the notice or be forever barred. The personal representative may provide written notice by mail to any creditor. Sec. 72-3-801.

Inventory

Within nine months after appointment, the personal representative must prepare an inventory of property owned by the decedent at the time of death. The inventory should describe each asset in reasonable detail and indicate its fair market value as of the date of the decedent's death and the type and amount of any encumbrance that may exist with reference to the item. Once completed, the personal representative must send a copy to each interested person or file the original of the inventory with the court and send a copy of the inventory to interested persons who request it. Sec. 72-3-607.

Homestead, Elective Share, Exempt Property and the Family Allowance

A surviving spouse is entitled to a homestead allowance of $20,000. If there is no surviving spouse, each dependent child of the decedent is entitled to a homestead allowance amounting to $20,000 divided by the number of dependent children. Homestead allowance is in addition to any share passing to the surviving spouse or minor or dependent child by the will, by intestate succession, or by way of elective share. Sec. 72-2-412.

The surviving spouse has a right of election to take a share equal to the value of the elective-share percentage of the augmented estate. The elective share percentage is determined by how long the decedent and the surviving spouse were married. The percentage varies from 3% if married for less than two years to 50% if married for more than 15 years. In no event shall the surviving spouse receive less than the lesser of $50,000 or the entire estate. Sec. 72-2-221.

The surviving spouse is also entitled to a value, not exceeding $10,000, in the decedent's exempt (tangible personal) property. If there is no surviving spouse, the decedent's children are entitled to the same value. Sec. 72-2-413.

In addition to the right to homestead allowance, elective share and exempt property, the surviving spouse and minor children are entitled to a reasonable allowance in money for their maintenance during the period of the estate's administration, but not exceeding one year if the estate is inadequate to discharge allowed claims. The allowance may be paid as a lump sum or in periodic installments. Sec. 72-2-414.

Debts and Distributions

If the assets of the estate are insufficient to pay all claims in full, the personal representative will make payment in the following order:

  1. costs and expenses of administration;
  2. reasonable funeral expenses and reasonable and necessary medical and hospital expenses of the last illness of the decedent, including compensation of persons attending the decedent;
  3. federal estate and Montana state estate taxes;
  4. debt for a current support obligation and past-due support for the decedent's children pursuant to a support order;
  5. debts with preference under federal and Montana law;
  6. other federal and Montana state taxes;
  7. all other claims. Sec. 72-3-807.

After charges against the estate are known, the personal representative may mail a proposal for distribution to all persons who have a right to object to the proposed distribution. The right to object to the proposed distribution terminates if the distributee fails to object in a writing received by the personal representative within 30 days after mailing or delivery of the proposal. Sec. 72-3-903.

Unless a contrary intention is indicated by the will, the assets of an estate must be distributed in kind to the extent possible. A specific devisee is entitled to distribution of the thing devised and a spouse or child who has selected particular assets of an estate as exempt property must receive the items selected. Any homestead or family allowance or devise of a stated sum of money may be satisfied in kind if the person entitled to the payment has not demanded payment in cash, the property distributed in kind is valued at fair market value as of the date of its distribution and no residuary devisee has requested that the asset in question. Sec. 72-3-902.

Shares of distributees abate in the following order:

  1. property not disposed of by the will;
  2. residuary devises;
  3. general devises;
  4. specific devises.

If the will expresses an order of abatement or if the testamentary plan would be defeated by the order of abatement, the shares of the distributees abate as may to give effect to the intention of the testator. Sec. 72-3-901.

Estate/Inheritance Tax


Montana does not have an estate or inheritance tax.

Income Tax Charitable Deductions and/or Credits


Montana allows a resident taxpayer to deduct itemized charitable gifts in the same manner as the IRS with certain exceptions. Mont. Code Ann. 15-30-2131(1).

In addition to the deductions available, Montana permits a taxpayer to take a credit against his or her tax liability in an amount equal to 10% of the aggregate amount of charitable contributions made during the year to a foundation or a general endowment fund of the Montana university system or any unit or campus of the Montana university system, a Montana private college, a Montana community college or a tribal college located in Montana. The maximum credit that a taxpayer may claim in a year under this section is $500. Sec. 15-30-2326.

Montana also provides a tax credit in an amount up to 40% of the present value of the charitable gift portion of a planned gift made to a qualified endowment. The maximum credit allowed in any one year is $10,000 ($20,000 for married couples) and the credit may not exceed the taxpayer's income tax liability. Carrying forward excess credit is not allowed. Mont. Code Ann. §15-30-2328. Planned gifts are described by the State of Montana as:

  1. Charitable remainder trusts.
  2. Pooled income funds.
  3. Charitable lead trusts.
  4. Charitable gift annuities.
  5. Deferred charitable gift annuities. For a deferred gift annuity to qualify as a planned gift for purposes of the endowment tax credit, the first partial or full-year payment of the annuity must begin within the life expectancy of the annuitant (or of the joint life expectancies of the annuitants). MONT CODE ANN. §15-30-2327(3)(b). In order to determine the life expectancy of a deferred annuitant see the life expectancy tables that are published on the MT Department of Revenue website (single life expectancy table and joint life expectancy table). Also, the deferred annuity payout rate must be at least 5%. MONT. CODE ANN. 15-30-2327(3)(e).
  6. Charitable life estate agreements.
  7. Paid-up life insurance policies.

For purposes of determining the endowment credit, the present value of a contribution is the amount reported to the Internal Revenue Service for that contribution. The present value of a gift contributed to a qualified endowment is based on its fair market value on the date of the gift. ADMIN. RULES OF MONT. RULE 42.4.2708.

Planned gifts may not be assigned back to the endowment sooner than the earlier of the death of the beneficiaries or five years from the date of the contribution. Mont. Code Ann. §15-30-2327

Gift Annuity Requirements


Montana, a "notification" state as of 2003, regulates the issuance of charitable gift annuities under MONTANA CODE ANNOTATED SECS. 33-20-701 through 33-20-705. Under the Code, charitable gift annuities are not deemed to be insurance provided the issuing charity satisfies certain conditions and notifies the Montana Department of Insurance.

To qualify, charities must have a minimum of $100,000 in unrestricted assets (cash, cash equivalents, or publicly traded securities exclusive of the assets funding the annuity agreement) or $300,000 of net worth. A charity also must have been in operation for at least three years. If a charity is unable to meet the listed requirements, it may still issue gift annuities as long as it commercially reinsures them by a licensed insurance company qualified to do business in Montana. Failure to comply may result in fines imposed by the commission of up to $1,000 per agreement.

Notification Process

Notice to the Insurance Commissioner is required prior to the date the charity enters its first qualified charitable gift annuity agreement. Notice must be made on the state required form available online, signed by an officer or director of the organization, identify the organization, certify it is a charitable organization and that the annuities issued are qualified charitable gift annuities. A balance sheet and income statement must be included with the completed form.

Disclosure Language

The gift annuity agreement must include the following state-specific disclosure language (in a separate paragraph, print size no smaller than that used generally in the gift annuity agreement):

"A qualified charitable gift annuity is not insurance under the laws of this state and is not subject to regulation by the commissioner or protected by an insurance guaranty association."

Reserve Requirements

An issuing charity is required to maintain a separate reserve fund that holds at least 50% of active gift annuity contributions.

Annual Filing Requirements

An annual filing is required on March 1 of each year in which the charity issues qualified charitable gift annuities. Notice must be made on the state required form available online, signed by an officer or director of the organization, identify the organization, certify it is a charitable organization and that the annuities issued are qualified charitable gift annuities. A balance sheet and income statement must be included with the completed form.

State Contact Information

Monica J. Lindeen
ATTN: Cheryl Donovan or Michelle Scaccia
Commissioner of Securities & Insurance
Montana State Auditor
840 Helena Avenue
Helena, MT 59601

Phone: (805) 444-4517

State Forms

For more information on state-specific form requirements, please contact Crescendo at 800-858-9154.
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