Overview
This article explains how Montana law treats leftover proceeds from the sale of a decedent’s property when the decedent died without a will (intestate). It covers who controls the money, the steps the estate representative must take, how creditors and taxes are handled, and how Montana’s intestacy rules determine who ultimately receives the funds.
Disclaimer: This is general information, not legal advice. For advice about a specific situation, consult a licensed Montana attorney.
Detailed answer — what happens to leftover sale proceeds in Montana when someone dies intestate
1. Proceeds become part of the decedent’s probate estate
If property owned by a person at death is sold and there are leftover sale proceeds, those funds generally become an asset of the decedent’s estate. The proceeds are handled through probate (or a small‑estate procedure if the value qualifies) and are not automatically the property of a buyer, heir, or family member until they are properly distributed by the estate process.
2. A personal representative (administrator) collects and safeguards the funds
Because the decedent died without a will, a court will appoint an administrator (also called a personal representative) to manage the estate. The administrator has a duty to collect assets (including sale proceeds), pay valid claims and taxes, and distribute what remains to heirs under Montana’s intestacy rules.
3. Creditors and expenses are paid first
Before any leftover sale proceeds can be distributed to heirs, the personal representative must pay:
- Reasonable funeral and administration expenses;
- Debts and valid creditor claims allowed under probate law;
- Taxes (federal and any Montana liabilities) and any sheriff or court-ordered expenses.
If creditor claims exceed available estate assets, heirs may receive nothing or only a portion under the priority rules and available funds.
4. Remaining funds are distributed under Montana’s intestacy rules
After paying expenses and allowed claims, the personal representative distributes remaining sale proceeds according to Montana’s intestate succession law. Montana sets a hierarchy of relatives who inherit when there is no will. Typical distribution rules in Montana are:
- If there is a surviving spouse but no descendants (children, grandchildren), the spouse usually inherits the entire estate.
- If there is a surviving spouse and descendants who are also descendants of the spouse, the spouse commonly inherits all or a large portion, and descendants share the rest, depending on the exact family structure.
- If there are descendants but no spouse, descendants (children, grandchildren) typically inherit in equal shares.
- If there are no descendants or spouse, the estate passes to parents, siblings, nieces/nephews, and more remote relatives in order of priority.
- If no legal heirs can be located, the estate may escheat (pass) to the State of Montana.
The exact shares depend on the family makeup. For authoritative language and the complete statutory hierarchy, see Montana’s probate and intestacy provisions linked below.
5. Small‑estate procedures and nonprobate transfers
Montana offers simplified procedures for small estates or specific types of assets that may allow heirs to collect personal property without full probate. Separate transfer rules apply to jointly owned property, payable‑on‑death accounts, or assets with designated beneficiaries; those may pass outside probate and therefore might not become part of the probate estate.
6. Common practical scenarios
- If a family member sold the decedent’s car after death and the sale produced net cash, the seller should turn that cash over to the estate or to the appointed administrator. Keeping or spending it risks personal liability.
- If the decedent owned real property that was sold during probate, the sale proceeds must be deposited to the estate’s account and handled like other estate assets.
- If multiple potential heirs claim funds, the personal representative should follow probate instructions and Montana intestacy law to resolve distributions; disagreements may require court involvement.
Key Montana statutes and resources
Montana’s laws governing estates, probate, and intestate succession appear in the Montana Code Annotated (Title 72, Estates and Protected Individuals). For the statutes, forms, and procedural details, consult:
- Montana Code, Title 72 — Estates and Protected Individuals: https://leg.mt.gov/bills/mca/title_72/
- Montana Courts — probate and estate information (self‑help resources and procedural guides): https://courts.mt.gov/selfhelp
Helpful hints
- Do not spend or divide sale proceeds before an administrator is appointed. That can create personal liability for anyone who removed funds without authority.
- If you believe you are an heir, contact the clerk of the district court in the county where the decedent lived to learn about opening an intestate estate case and the required steps.
- Ask the appointed administrator for an accounting. Administrators must keep records showing collection of assets, payment of claims, and distributions to heirs.
- If the estate is small, ask whether Montana’s simplified or affidavit procedures apply; those can speed collection of some assets without a full probate.
- Preserve documentation: sale contracts, bank statements showing the proceeds, correspondence about the property sale, and any creditor invoices. Those records help the administrator and may be required by the court.
- If family members disagree about distributions, consider mediation or consult an attorney; contested distributions can lead to costly court litigation.
When to consult a Montana attorney
Talk with a Montana probate or estate attorney if:
- The estate has significant assets or complex property (real estate, business interests, out‑of‑state property);
- There are creditor disputes or tax issues that may affect distributions;
- Family members contest who the heirs are or whether the sale proceeds were handled properly; or
- You are the personal representative and need guidance on your duties and potential personal liability.