Quick overview

When a house owned by a person who has died is sold, the sale money generally becomes part of the decedent’s estate. The estate’s personal representative (sometimes called executor or administrator) must use those funds to pay secured claims (like mortgages and liens), costs of administration (attorney fees, court costs, selling expenses), creditor claims, taxes, and any statutory family allowances. After those obligations are satisfied, the remaining balance is distributed to persons entitled under the will or, if there is no valid will, under Montana’s intestacy rules. For Montana statutes governing decedents’ estates, see Montana Code Annotated, Title 72 (Decedents’ Estates): https://leg.mt.gov/bills/mca/title_72/.

Step-by-step: how proceeds are typically handled in Montana

1. Identify ownership and liens: Before or at sale, title searches reveal mortgages, tax liens, mechanic’s liens, or judgment liens. Those liens attach to the property and are usually paid from sale proceeds at closing.
2. Sale closing: At closing, the title company or closing agent pays off recorded liens (mortgage, property taxes) out of the gross sale price. The remaining funds are delivered to the personal representative or the estate’s attorney, often into an estate bank account.
3. Estate administration: The personal representative opens probate (if required), files an inventory and appraisement, notifies creditors, and collects other estate assets. The representative pays administration costs and valid creditor claims in the order required by law.
4. Priority payments: Secured debts tied to the property are paid first at closing. After the sale, the estate pays funeral expenses, administration costs, taxes, and creditor claims according to Montana law and court orders.
5. Allowances and exemptions: Certain statutory allowances or exemptions for a surviving spouse, minor children, or a homestead may reduce what remains for general creditors and beneficiaries. Those are claimed and applied during administration.
6. Distribution to beneficiaries: After debts, taxes, and allowances, the remaining funds are distributed either per the decedent’s will or under intestacy statutes (if no valid will exists).

Who gets paid first (typical priority order)

• Liens secured by the property (mortgage, tax liens) — generally satisfied at closing.
• Costs of sale and administration (closing costs, real estate commissions, court costs, attorney fees) — paid by the estate.
• Funeral expenses and certain family allowances — priority often given under probate law.
• Taxes owed by the decedent and estate (federal and Montana taxes).
• Unsecured creditors (credit cards, medical bills, judgments) — paid from estate assets in statutory order.
• Residual distribution to beneficiaries under the will or to heirs under Montana intestacy rules.

For the Montana statutes and fuller explanation of probate duties and distribution priorities, consult Montana Code Annotated, Title 72 (Decedents’ Estates): https://leg.mt.gov/bills/mca/title_72/.

How you can find out exactly where the sale proceeds will go

1. Get the deed and title report: Check the county clerk and recorder where the property sits for the deed and any recorded liens. The closing agent uses these records when paying off liens. County recorder websites or offices will list mortgages and judgments against the property.
2. Ask the personal representative (PR): The PR (named in the will or appointed by the court) handles sale proceeds. Ask for a copy of the closing statement (HUD-1 or settlement statement) showing how sale proceeds were disbursed at closing.
3. Review probate filings: If the estate is in probate, the PR normally files an inventory and periodic accountings with the district court. Those filings show estate assets, receipts (including net sale proceeds), payments to creditors, and distributions. Visit the clerk of district court in the county where probate is filed or check online court dockets if available at https://courts.mt.gov/.
4. Request a formal accounting: If you are an heir or beneficiary, Montana law generally gives you the right to request an accounting from the PR. If the PR refuses, you can ask the probate court to compel an accounting.
5. Obtain the closing statement: The closing statement lists lien payoffs (mortgage, taxes), seller’s net proceeds, commissions, and payoff amounts. If the PR or title company will not provide it voluntarily, a court petition or subpoena may be required.
6. Check for pending creditor claims: The PR should publish notice to creditors under Montana probate rules; check the probate case file and local newspapers where the estate was opened for published notices of claims.

Common complications and signals to watch for

• If the estate appears insolvent (debts exceed assets), beneficiaries may receive nothing. The PR must follow statutory priority rules for payment.
• If a mortgage or lien was not discovered, a buyer’s title company may withhold funds until lien claims are resolved.
• Family disputes about whether the sale should have occurred or about distribution can slow or stop distributions; these disputes generally go to probate court.
• Unfiled or late creditor claims can complicate distributions — check the published creditor notice and case docket.

Practical steps to get the information you need

1. Identify the county where the real property is located and search the county clerk & recorder for the deed and recorded liens.
2. Determine whether a probate case exists (search district court records in the decedent’s county or call the clerk of district court).
3. Request the closing statement and any proof of payoff documents from the PR or the title/escrow company that handled the sale.
4. Request a written accounting from the PR (as an heir or beneficiary). If denied, you can file a motion in probate court to compel an accounting.
5. If you suspect mismanagement, contact a Montana probate attorney to review documents and advise on court remedies (surcharge, removal of PR, petition for accounting).

When to consider hiring an attorney

Consider consulting a Montana probate attorney if:

• You cannot get basic documents (closing statement, inventory, accounting) from the personal representative.
• You suspect the personal representative has mishandled funds or failed to pay valid claims.
• There are disputes among heirs or a challenge to the will or sale.
• The estate appears insolvent and you need to understand priority of claims.

Helpful hints

• Start with the deed and recorded liens at the county recorder’s office — many issues are visible there.
• Ask the PR for the closing statement first — it answers many distribution questions immediately.
• Keep a written record of requests and responses (emails, certified letters) in case you must go to court.
• Search the probate court docket early to see filings like the inventory, notices to creditors, or accountings.
• Remember that secured debts on the property (mortgages, tax liens) are typically satisfied at closing before any net proceeds reach the estate.
• Be mindful of time limits — creditors have limited windows to file claims; beneficiaries also have deadlines to contest administration acts.