Disclaimer: This article is for educational purposes only and does not constitute legal advice.
Detailed Answer
Under Montana law, a personal representative can bring real property into the probate estate to generate funds for paying creditors. Follow these steps to probate and sell or encumber real property:
- Open Probate and Appoint a Representative. File a petition in the district court of the decedent’s county to open probate and appoint a personal representative. See Mont. Code Ann. § 72-3-203 (link).
- Identify and Inventory Real Property. Within 60 days of appointment, file an inventory listing all real property owned solely by the decedent. Mont. Code Ann. § 72-3-505 (link).
- Notify Creditors. Publish notice to creditors and mail notice to known claimants. This establishes a claim period (minimum four months). Mont. Code Ann. § 72-3-705 (link).
- Petition for Authority to Sell or Encumber Property. After allowing creditor claims, file a petition asking the court to authorize sale or encumbrance of real property. The petition must describe the property, sale terms, and the need for funds to pay claims. Mont. Code Ann. § 72-3-1101 (link).
- Obtain Court Order and Record It. Attend the hearing. If the court finds the sale or mortgage is necessary and in the estate’s best interest, it issues an order. Record the order in the county land records.
- Sell or Encumber the Property. Conduct the sale or secure a mortgage under the court-ordered terms. Deposit proceeds into a blocked estate account, or, if mortgaged, apply loan proceeds to creditor claims.
- Pay Claims and Distribute Remaining Assets. Pay valid creditor claims from sale or loan proceeds in the order prescribed by statute. See Mont. Code Ann. § 72-3-717 (link).
Helpful Hints
- Gather complete legal descriptions for each property parcel.
- Obtain a current appraisal to set a reasonable sale price.
- Check for existing liens or encumbrances before petitioning for sale.
- Serve notice on all potential heirs to avoid distribution disputes.
- Keep a detailed records file of all court filings and notices.
- Consider whether a mortgage or sale better preserves estate value.
- Work with a probate attorney if you encounter title or procedural issues.