Montana — What Happens to Surplus Proceeds When a Property Owner Dies Intestate (Siblings Involved) | Montana Probate

Detailed Answer

Short answer: When someone in Montana dies without a will (intestate), any money remaining from the sale of their property after paying liens, taxes, creditors, and administration costs becomes part of the decedent’s estate. A personal representative (the court-appointed administrator) or the probate court will distribute that surplus under Montana’s intestacy rules. If the decedent is survived only by siblings (no spouse, children, or parents), the siblings (or their children if a sibling predeceased) inherit the surplus, usually in equal shares.

How it works step-by-step

Identify what kind of money this is. Surplus proceeds can come from different situations: a court-ordered sale in probate, sale by a personal representative, or surplus from a foreclosure sale. Regardless of origin, if the decedent owned the property at death and no transferrable ownership (like joint tenancy or a valid transfer-on-death deed) passed it outside probate, the money generally becomes estate property.
Determine whether probate is required. If the estate’s assets (including the surplus proceeds) exceed Montana’s small estate threshold or if there are real property interests to clear, someone will usually open a probate estate in the district court where the decedent lived. The court appoints a personal representative (administrator) to collect assets, pay debts, and distribute the remainder. See Montana’s probate and intestacy rules for details: https://leg.mt.gov/bills/mca/title_72/72-2/
Pay liens, costs, and creditors first. Before heirs get anything, the estate must pay secured creditors (mortgages), funeral expenses, administration costs, taxes, and allowed creditor claims. Only the net amount left is distributable as surplus.
Apply Montana intestacy rules. Montana’s intestate succession rules direct who gets the remainder. In general order of priority: spouse and descendants, then parents, then siblings, then nieces/nephews, and so on. If there is no surviving spouse, no descendants, and no surviving parents, the siblings inherit. If a sibling died before the decedent but left children, those children typically inherit that sibling’s share by representation (per stirpes). For the statutory text and details of heirs’ shares, see Montana Code Annotated, Title 72 (Intestate succession): https://leg.mt.gov/bills/mca/title_72/72-2/
Distribution among siblings. If three siblings survive the decedent and meet the inheritance rules, they split the distributable surplus equally. If one sibling predeceased the decedent but left two children, those two children usually split the predeceased sibling’s share between them. Half-siblings are typically treated similarly to whole-blood siblings unless a statute says otherwise; adoption and parent-child relationships can affect inheritance rights.
What if the property passed outside probate? If title passed by joint tenancy, beneficiary deed (transfer-on-death), or named beneficiary, the surplus may not become part of the probate estate. Instead, the statute and the transferring instrument determine who gets the proceeds. Verify title records and deeds early.
Foreclosure surplus or sheriff sale surplus. If surplus proceeds result from a foreclosure or sheriff’s sale, the sheriff or sale officer often holds the surplus and may have procedures for distributing it. Those funds are typically subject to claims by the decedent’s creditors and heirs; heirs should claim the funds through the court or the sheriff’s prescribed process. If multiple claimants appear (creditors, heirs), the court may decide who is entitled to the surplus.

Common complications

Disputed sibling relationships (half-siblings, adoption, illegitimacy) can complicate who qualifies as an heir.
Unknown heirs or missing siblings may delay distribution and require public notice or genealogical searches.
Creditor claims can reduce or eliminate surplus proceeds if valid debts exceed the available funds.
Conflicts among heirs about selling property or dividing cash often require court intervention or mediated settlement.

Hypothetical example: Jane (decedent) dies intestate owning a house. The house sells in probate for $250,000. Mortgage balance, taxes, funeral costs, and administration costs equal $230,000. The $20,000 left is surplus. Jane left no spouse, no children, and both parents predeceased her. She has two living siblings and a third sibling who predeceased her but left two children. Under Montana intestate succession rules, the two living siblings split two-thirds of the surplus ($13,333.33 each), and the two children of the predeceased sibling split one-third ($3,333.33 each).

Where to look in Montana law

Montana’s statutes governing intestate succession and probate procedures are in the Montana Code Annotated. See the intestate succession provisions and related probate rules here: https://leg.mt.gov/bills/mca/title_72/72-2/ and general probate information for Montana courts here: https://courts.mt.gov/

Next practical steps for siblings:

Check the county deed and title records to confirm whether the property passed outside probate (joint tenancy, TOD deed, beneficiary, etc.).
If the property did not pass outside probate, contact the district court probate clerk in the decedent’s county to find out whether an estate was opened and who the personal representative is.
If no probate was opened and the estate likely requires administration, consult a probate attorney to open an estate, especially if the surplus or other assets exceed Montana’s small estate threshold.
Collect basic documents: death certificate, deed/title documents, mortgage statements, and any known creditor information.
If you believe you have a claim to surplus funds (e.g., sheriff’s sale surplus), act promptly to file a claim or petition the court, because time limits and notice requirements may apply.

Disclaimer: This article provides general information about Montana probate and intestate succession procedures. It is not legal advice. Laws change and every situation is unique. For advice about a particular case, consult a licensed Montana probate attorney.

Helpful Hints

Start by confirming title and ownership details—many “estate” issues are resolved by checking the deed.
Collect a certified copy of the death certificate early; courts and title companies require it.
If the estate looks small, ask about Montana’s simplified or small‑estate procedures; they can save time and money.
Be aware of time limits for creditor claims and for filing to claim surplus funds after a sale—act quickly.
If siblings disagree about dividing funds, consider mediation before litigation to save costs and preserve family relationships.
Keep careful records of communications, receipts, and court filings; the personal representative must account for distributions to heirs.
If you suspect a missing will or beneficiary designation, search the decedent’s important papers and contact their bank, insurance companies, and the county recorder’s office for recorded deeds.
When in doubt, consult a Montana probate attorney — an initial consult can clarify timelines, likely distributions, and required filings.