How to Distinguish Estate Assets from Corporate Assets in Montana

1. Detailed Answer

When someone dies owning both personal assets and interests in a relative’s corporation, you must separate what belongs to the decedent’s estate from what remains corporate property. Under Montana law, a corporation is a distinct legal entity. Its assets never become estate property unless the decedent held them directly.

1.1. Define Estate Property

Montana’s Probate Code defines estate property as the decedent’s interest in real and personal property at death. See Montana Code Annotated (MCA) § 72-1-102: https://leg.mt.gov/bills/mca/title_72/chapter_1/part_1/section_102/72-1-102.html.

• Real property titled in the decedent’s name (e.g., home, land).
• Bank accounts or securities held individually in the decedent’s name.
• Personal items: vehicles, jewelry, household goods.

1.2. Recognize Corporate Property

Under MCA § 35-1-102, a corporation is a separate “legal person” once formed. See: https://leg.mt.gov/bills/mca/title_35/chapter_1/part_1/section_102/35-1-102.html.

• Assets held in the corporation’s name (e.g., corporate bank accounts, titled vehicles, real property deeds).
• Equipment or inventory owned by the corporation.
• Accounts receivable and corporate investments.

1.3. Steps to Distinguish Assets

1. Obtain a certified death certificate.
   This document starts the probate process. It lets banks and agencies release information.
2. Gather title documents and account statements.
   Review names listed on deeds, titles, and account registrations.
3. Review corporate records.
   Ask for the Articles of Incorporation and annual reports. Confirm whose names appear as officers or shareholders.
4. Inventory estate assets.
   Under MCA § 72-3-101, a personal representative creates an inventory of estate property. Maintain clear records.
5. Compare lists.
   Anything titled in the corporation’s name stays with the corporation. Items in the decedent’s individual name pass through probate.
6. Address mixed assets.
   If the decedent used personal funds to purchase corporate assets without formal transfer, you may need a forensic accounting or court determination.

1.4. Avoiding Veil Piercing

Montana courts respect the corporate veil. They will not treat corporate assets as estate property unless the decedent completely ignored corporate formality (e.g., personal use of corporate funds). See MCA Title 35, Chapter 1 for corporate formalities.

2. Helpful Hints

• Keep asset titles and bank accounts clearly separate between individual and corporate.
• Maintain corporate minutes and resolutions to document transactions.
• Hire a probate attorney or accountant if assets overlap.
• Use Montana’s probate forms available at the Montana Judicial Branch Forms site.
• File an estate inventory promptly under MCA § 72-3-101 to avoid penalties.
• Consider a corporate buy-out agreement if the decedent held shares in a family business.