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Selling Inherited Property in Montana
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Selling Inherited Property in Montana

Selling inherited property in Montana: who signs the deed under MCA 72-3-613, how a TOD deed or joint tenancy changes that, and the tax.

By Settled Editorial

Yes, you can sell an inherited Montana home, and in most estates you sell it during probate rather than after. MCA 72-3-619(1) gives a personal representative, the person most families call the executor, the same power over the title to estate property that an absolute owner would have, and it lets that power run "without notice, hearing, or order of court." So the sale usually turns on one question: who has the legal right to sign the deed.

Two facts shape the money side. Montana collects no estate tax and no inheritance tax, and its constitution forbids any tax on the sale or transfer of real property. And an inherited home generally takes a new cost basis equal to its value on the date of death under federal law, which can shrink the capital gains bill to almost nothing on a quick sale.

This page covers how to clear title, when a court order comes into it, what the creditor rules do to the sale proceeds, how the tax math works in Montana, and what the heirs property statute does when co-owners disagree. If you are still working out whether the estate needs probate at all, start with the Montana probate guide.

Clear Title First, Then List

A buyer's title company will not insure the sale until the public record shows how the property left the decedent. MCA 72-3-101(2) says real and personal property devolves at death to the devisees under the will or, without one, to the heirs, subject to the homestead allowance, exempt property, family allowance, creditors' rights, the surviving spouse's elective share, and administration. The ownership moves at death. The paperwork that proves it comes later.

Start at the county clerk and recorder's office where the land sits and pull the last recorded deed. Four chains of title cover almost every Montana case.

Titled in the decedent's name alone. This one needs probate. Montana has no separate probate court: MCA 72-1-103(9) makes "court" the district court, and 72-1-103(24) says informal proceedings are conducted by the clerk of court. The clerk of district court in the county of domicile appoints the personal representative, who then signs a personal representative's deed and records it with the county clerk and recorder.

Covered by a recorded transfer on death deed. Montana has allowed a Montana transfer on death deed since 2019, and a beneficiary deed recorded before October 1, 2019 counts as one under MCA 72-6-417. At death the land passes to the surviving beneficiary outside probate, so the beneficiary sells it, not an estate. Three parts of MCA 72-6-412 change what a buyer sees:

  • Liens stay. Under 72-6-412(2) the beneficiary takes the property subject to every mortgage, lien, contract, and other interest in place at death.
  • No warranty. Under 72-6-412(4) the deed transfers the property without covenant or warranty of title, even if the deed says otherwise.
  • Insurance for 45 days. Since Chapter 296 of the 2025 Laws (HB 464), 72-6-412(5) extends the owner's real property insurance to the beneficiary until the earliest of 45 days after the death, the policy's expiration, or a replacement policy. Buy your own coverage before that runs out.

Ask the title company what it wants recorded to show the death. MCA 7-4-2613(1)(d) makes certificates of death recordable in the county records.

Held in joint tenancy with right of survivorship. The survivor already owns the whole property. MCA 72-16-503 requires the person with an interest to record, with the clerk and recorder of each county where the land lies, the document described in 7-4-2613(1)(c): an acknowledged statement that the joint tenant has died and the interest is terminated, with a legal description of the property. The State Law Library publishes an "Affidavit of Death" form for this. That procedure covers a decedent who left no property requiring a personal representative (72-16-502), so if an estate is open anyway, ask the title company what it will accept.

Read the deed wording before you assume survivorship. MCA 70-1-314 makes every interest created in favor of several persons, including husband and wife, an interest in common unless the deed declared it a joint interest under 70-1-307. A deed to two spouses with no joint tenancy language leaves the deceased spouse's half to pass by will or intestacy, and that half needs probate.

Held by a trust. The trustee sells under the trust instrument, and probate never touches the property. If sparing the next generation this whole process is the goal, see how to avoid probate in Montana.

The small estate affidavit will not move a house. MCA 72-3-1101(1) reaches tangible personal property and instruments evidencing a debt, obligation, stock, or chose in action. Real estate is not on the list. The house still counts toward the $100,000 limit, which the statute measures as the value of the probate estate, wherever located, less liens and encumbrances. A $400,000 house with a $330,000 mortgage adds $70,000 to that total. The Montana small estate guide covers both routes Montana offers for small estates.

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When a Montana Personal Representative Needs a Court Order

For an unsupervised estate, almost never. Three sections work together:

  • MCA 72-3-605 tells the personal representative to proceed with settlement and distribution "without adjudication, order, or direction of the court," except for a supervised representative, while keeping the right to ask the court a question.
  • MCA 72-3-619(1) grants absolute-owner power over title, exercisable without notice, hearing, or court order.
  • MCA 72-3-613(23) lets the representative "sell, mortgage, or lease any real or personal property of the estate," or any interest in it, "for cash, credit, or for part cash and part credit." Subsection (6) separately covers disposing of land "in this or another state" at public or private sale.

Section 72-3-613 opens with its own limits. The powers apply "except as restricted by this code or otherwise provided by the will or by an order in a formal proceeding." So read the will before you list. A will that restricts a sale of the family ranch binds the representative.

Supervised administration is where the rules tighten. Under MCA 72-3-404 a supervised personal representative still holds every power without interim orders, with one carve-out: no distribution of the estate without a prior court order. Any other restriction the court orders must be endorsed on the letters, or it does not bind a person dealing with the representative in good faith. So the letters themselves are the document a title officer reads.

Three more sections decide how safe the deal is:

  • Buyers are protected. MCA 72-3-618(1) protects a person who in good faith deals with a personal representative for value as if the power had been properly exercised. Knowing you are dealing with a representative does not by itself require you to look into the power, and a will or court order limiting the power binds only a person with actual knowledge of it, unless it is a supervised restriction endorsed on the letters.
  • Self-dealing is voidable. MCA 72-3-615 makes a sale to the representative, the representative's spouse, agent, or attorney, or a corporation or trust the representative has a large beneficial stake in, voidable by any interested person who did not consent after fair disclosure. The exceptions are a will or a contract of the decedent that expressly authorized it, or court approval after notice to interested persons. An heir who is also the personal representative and wants to buy the family home should get that approval on the record.
  • Co-representatives act together. If the court appointed two or more people, MCA 72-3-622 requires all of them to concur, unless the will says otherwise, a delegation is in place, or an emergency leaves no time. Plan for every signature.

Timing matters too. MCA 72-3-601(1) says the powers of a personal representative begin on appointment, and 72-3-225(1) lets the clerk make an informal appointment only after at least 120 hours have passed since the death. If the decedent lived outside Montana, the clerk waits 30 days unless the domiciliary personal representative applies or the will directs that Montana law govern. Montana executor duties covers the rest of the personal representative's authority.

Debts, Creditor Deadlines, and the Sale Proceeds

Selling early is fine. Handing out the money early is the risk.

Montana makes publication mandatory. MCA 72-3-801(1) says a personal representative, on appointment, shall publish a notice to creditors once a week for 3 successive weeks in a newspaper of general circulation in the county, and creditors then have 4 months after the first publication to present claims. A creditor who also gets written notice has the later of that 4-month period or 30 days from the mailing (72-3-801(2)).

Above both sits MCA 72-3-803(1). Claims that arose before the death are barred unless presented within the earlier of 1 year after the death or the notice deadline. So a Montana estate that never published still gets a 1-year outer bar.

Then read 72-3-803(4)(a). The claim bar does not stop a proceeding to enforce a mortgage, pledge, or other lien on estate property. A lender keeps its mortgage whether or not it files a claim, so a mortgaged home is paid off at closing like any other sale.

Three more things sit ahead of the heirs:

  • The homestead allowance. MCA 72-2-412 gives a surviving spouse a $22,500 homestead allowance that is exempt from and has priority over all claims. With no spouse, minor and dependent children split it. Montana exempt property covers it with the other allowances.
  • Medicaid estate recovery. If the decedent received Medicaid, MCA 53-6-167(5)(a) lets the Department of Public Health and Human Services reach property passing through joint tenancy, right of survivorship, a life estate, or a living trust, not just the probate estate. Under 53-6-167(9)(b) it may not recover while a surviving spouse, or a child under 21, blind, or permanently and totally disabled, is alive.
  • Claims against a TOD beneficiary. MCA 72-6-414 makes a transfer on death deed beneficiary liable for allowed claims and statutory allowances to the extent set by 72-6-112, only when the probate estate falls short, only up to the value received, and only in a proceeding started within 1 year after the death (72-6-112(8)).

Keep the net proceeds in the estate account until the claim period has run and the taxes are handled. MCA 72-3-1004 lets the estate close by sworn statement no earlier than 6 months after the original appointment, and only after the representative confirms the claim period has expired. See Montana creditor claims for each deadline.

Stepped-Up Basis and the Federal Gain

This is where a family usually saves the most money.

Capital gains tax applies to the gain, meaning the sale price minus your basis. For inherited property, 26 U.S.C. 1014(a)(1) sets the basis at the fair market value of the property at the date of the decedent's death, with an alternate date where the estate elects alternate valuation. IRS Publication 544 adds that inherited property is treated as held longer than 1 year, regardless of how long you actually held it, so the gain is long term from day one.

Say a Missoula County home was bought in 1998 for $142,000 and was worth $610,000 on the date of death. The heir's basis becomes $610,000. The heir sells a few months later for $660,000 and pays $36,000 in commission and closing costs, so the amount realized is $624,000 and the taxable gain is $14,000. Without the step-up, the gain would have been $482,000.

Four points decide whether that math holds:

  • Fix the date of death value on paper. MCA 72-3-607(1) requires an inventory within 9 months after appointment listing each item's fair market value as of the date of death, and 72-3-607(2) lets the personal representative hire a qualified and disinterested appraiser and name that appraiser on the inventory. A date of death appraisal is the strongest evidence of your basis.
  • Montana is not a community property state. When spouses held a home as joint tenants and one dies, the federal rules generally step up only the deceased spouse's half. The Montana step-up in basis page works through that math, including property brought from a community property state.
  • Selling costs reduce the gain. Commission, title charges, and other costs of sale come off the amount realized.
  • Some assets never step up. Inherited retirement accounts are income in respect of a decedent and keep their character.

Basis rules are federal and fact specific. Confirm your figures with a tax professional before you file.

What the Sale Costs in Montana Tax

Montana does not tax what you inherit, and it taxes a gain on the sale more lightly than wages.

No estate or inheritance tax. The Montana Department of Revenue says "Montana no longer collects estate or inheritance taxes," that "Montana does not have an estate tax for deaths after 2004," and that Montana no longer requires a certificate or consent from the department to close probate. MCA 72-16-904 is still in the code, and the Montana estate tax rules page explains why it collects nothing.

A lower rate on long-term gains. MCA 15-30-2103(2) taxes net long-term capital gains at 3.0% up to a bracket line and 4.1% above it. For tax year 2026 the line is $47,500 for a single filer and for an estate or trust, $71,250 for a head of household, and $95,000 on a joint return, each reduced by your other Montana taxable income. That version of the section terminates December 31, 2026 under Chapter 227 of the 2025 Laws (HB 337). The version that replaces it keeps the 3.0% and 4.1% rates, raises the lines to $65,000, $97,500, and $130,000, and indexes them for inflation.

Run the Missoula example. A single heir with $40,000 of other Montana taxable income in 2026 has $7,500 of room left under the 3.0% line. The $14,000 gain is taxed at 3.0% on $7,500, which is $225, and 4.1% on the other $6,500, which is $266.50. The Montana tax on the sale comes to $491.50.

When the estate sells. If the estate sells and keeps the gain, the estate reports it. The Department of Revenue says that beginning with tax year 2024, a resident estate must file Form FID-3 if it has a federal filing requirement or positive Montana taxable income after Montana additions.

No transfer tax. Article VIII, section 17 of the Montana Constitution provides that "The state or any local government unit may not impose any tax, including a sales tax, on the sale or transfer of real property."

Recording is a page fee. MCA 7-4-2637(1)(a) sets $20 for the first page and $10 for each additional page of a standard document, and 7-4-2637(2) adds $10 for a document that does not meet the recording standards. A two-page personal representative's deed costs $30 to record. Beginning July 1, 2027, the Department of Revenue must adjust that fee for inflation by rule, so check the current figure with the clerk and recorder.

The realty transfer certificate. MCA 15-7-305(2) says a deed transferring real estate may not be accepted for recording until the county clerk and recorder receives a realty transfer certificate on the Department of Revenue's form, and 15-7-305(3)(b) attaches a water right ownership update form to it. That matters on a ranch or any parcel with a water right. For a transfer of a decedent's estate, 15-7-307(9) lets the certificate leave out the price.

Federal estate tax reaches only very large estates. The Montana estate tax rules page covers the Form 706 threshold.

The Property Tax Bill While the House Sits

An empty inherited Montana house can cost more to hold than the family expects, because of a rate Montana created in 2025.

Chapter 767 of the 2025 Laws (SB 542) added MCA 15-6-405, the homestead reduced tax rate for a principal residence, beginning in tax year 2026. Under MCA 15-6-134(3)(b)(i), class four residential property that qualifies is taxed at 0.76% of market value up to the statewide median residential value, 0.9% from there to twice the median, 1.1% up to four times the median, and 1.9% above that. A home that does not qualify is taxed at 1.9% under 15-6-134(3)(a). Local mill levies then apply to that taxable value.

The reduced rate does not survive the death for long. Under 15-6-405(2)(c), it lasts only until the end of the tax year in which there is a change in ownership, or in which the owner no longer uses the dwelling as a principal residence. An heir who moves in has to apply for the rate on their own, and 15-6-405(2)(b) sets the window at December 1 through March 1 for the tax year the application covers. A house that sits empty into the next tax year loses the reduced rate.

Meanwhile MCA 72-3-606(2) tells the personal representative to pay taxes on the estate's property and take reasonable steps to protect and preserve it. Keep the insurance, utilities, and winterization current. A frozen pipe in January is an estate expense.

Selling With Several Heirs

When more than one person inherits, each holds an undivided share. While the estate is open, the personal representative controls the sale and divides the net proceeds by the shares, which is usually the simpler path.

If the representative distributes the house instead, MCA 72-3-904 requires a deed of distribution as evidence of each distributee's title. From then on every co-owner signs any deed. Under 72-3-907(1), a buyer or lender who acquires the property for value from a distributee holding that deed takes title free of the rights of other interested persons, whether or not the distribution was proper, and 72-3-907(2) makes the recorded instrument prima facie evidence that the transfer was for value.

If one heir refuses to sell, Montana offers two routes.

Partition inside the estate. MCA 72-3-914 lets the personal representative, or one or more heirs or devisees, petition the court before the estate closes to partition property held in undivided interests. The court may direct the representative to sell property that cannot be partitioned without prejudice to the owners and cannot conveniently be allotted to one party.

Partition as a civil action, under the heirs property act. A joint tenant or tenant in common may sue for partition under MCA 70-29-101, and the court may order a sale if partition cannot be made without great prejudice to the owners. For any partition action filed on or after October 1, 2013, MCA 70-29-403 requires the court to decide first whether the land is heirs property, and if it is, to apply the Uniform Partition of Heirs Property Act. MCA 70-29-402(5) defines heirs property as real property held in tenancy in common, with no agreement in a record binding all the cotenants on partition, where at least one cotenant took title from a relative and any one of three tests is met: relatives hold 20% or more of the interests, one person who took title from a relative holds 20% or more, or 20% or more of the cotenants are relatives.

That classification changes the outcome. Here is the sequence it sets:

  1. The court fixes fair market value, usually by appointing a disinterested Montana licensed appraiser, unless the cotenants agree on a value or the cost of an appraisal outweighs its worth (70-29-410).
  2. If any cotenant asked for a sale, the other cotenants get 45 days to elect to buy out those interests at the determined value times each seller's fractional share (70-29-411).
  3. If nobody buys, the court orders partition in kind unless it finds great prejudice to the cotenants as a group, weighing the factors in 70-29-413: how long the family has owned the land, sentimental or ancestral attachment, a cotenant's current lawful use, and who has paid the taxes, insurance, and upkeep (70-29-412).
  4. If a sale is ordered, it is an open-market sale through a Montana licensed broker at no less than the determined value, unless sealed bids or an auction would serve the cotenants better (70-29-414).

For a family with one holdout, a Montana heirs property case is far more likely to end in a buyout at an appraised price than a courthouse auction. Bring in a Montana attorney before anyone files.

Agent or Cash Buyer

Once you can legally sell, you still choose how. A listing with an agent usually nets the most, because the full buyer pool sees the property, and an agent used to estate sales can work with heirs who live out of state and a house that has not been updated. The trade-off is time on the market, showings, and commission.

A cash or investor offer trades price for speed. Those offers come in below market and take the home as is, with no repairs and no financing contingency, which can suit an estate that needs to close, a house with deferred maintenance, or heirs who want to be done. Get more than one offer and compare the net to the estate after costs, not the headline number.

Steps to Sell an Inherited Montana Home

  1. Pull the last recorded deed from the county clerk and recorder and read how title was held, including whether it declared a joint tenancy.
  2. Look for a recorded transfer on death deed, an older beneficiary deed, or a trust deed that already moved the property.
  3. If the land was titled in the decedent's name alone, apply to the clerk of district court in the county of domicile for appointment, no sooner than 120 hours after the death.
  4. Read the will and the letters for any restriction on selling, including an endorsed restriction in a supervised estate.
  5. For a joint tenancy, record the acknowledged statement of death under 72-16-503.
  6. Order a date of death appraisal to fix the new basis, and list the appraiser on the inventory under 72-3-607.
  7. Publish notice to creditors under 72-3-801 and track the 4-month deadline.
  8. Check the homestead reduced tax rate and keep the house insured, heated, and protected.
  9. List with an agent or take a cash offer, comparing the net proceeds.
  10. Close with a personal representative's deed, or with every co-owner signing once the property has been distributed, and file the realty transfer certificate with the deed.
  11. Hold the net proceeds in the estate account until claims, allowances, and taxes are resolved.
  12. Report the sale from the stepped-up basis on the federal return and on the Montana return or Form FID-3.

For the sequence of everything else, see the Montana probate timeline. For recording mechanics after a death, see Montana property transfer after death.

Common Questions

Can a Montana personal representative sell a house without a court order?

Usually yes. MCA 72-3-619(1) gives a personal representative the same power over the title to estate property that an absolute owner would have, held in trust for creditors and others interested in the estate, and says that power may be exercised without notice, hearing, or order of court. MCA 72-3-613(23) lists selling, mortgaging, or leasing any real or personal property of the estate among the transactions a personal representative may carry out, and 72-3-613(6) covers disposing of land in Montana or another state at public or private sale. The limits come from the will, from an order in a formal proceeding, or from supervised administration, where 72-3-404 bars any distribution without a prior court order and makes other restrictions binding on good faith buyers only if they are endorsed on the letters.

Can you sell an inherited Montana house before probate is finished?

Yes. The sale happens during administration, not after it. Once the clerk of district court appoints a personal representative, which MCA 72-3-225(1) allows no sooner than 120 hours after the death, the representative can list the house, accept an offer, and sign the deed. What has to wait is the money. MCA 72-3-801 requires the representative to publish notice to creditors, who then have 4 months from the first publication, and 72-3-1004 lets the estate close by sworn statement no earlier than 6 months after the original appointment. Handing out the proceeds before claims are settled puts the representative at personal risk.

Does a Montana small estate affidavit transfer a house?

No. MCA 72-3-1101(1) makes a person holding tangible personal property, or an instrument evidencing a debt, obligation, stock, or chose in action, hand it over to the successor on an affidavit. Real estate is not on that list. A house in the probate estate still counts toward the $100,000 limit, which is the value of the probate estate, wherever located, less liens and encumbrances. To sell land titled in the decedent's name alone, someone has to be appointed personal representative.

Do you pay capital gains tax on an inherited Montana home?

Often very little. Under 26 U.S.C. 1014 the basis of property acquired from a decedent is generally its fair market value at the date of death, so the gain is measured from that figure and not from what the decedent paid. IRS Publication 544 says inherited property is treated as held longer than 1 year no matter how long you held it. Montana then taxes net long-term capital gains at lower rates than wages: under MCA 15-30-2103(2), for tax year 2026, 3.0% on gains up to $47,500 for a single filer or an estate, less other taxable income, and 4.1% above that line.

Does Montana charge an estate, inheritance, or transfer tax on the sale?

No to all three. The Montana Department of Revenue says Montana no longer collects estate or inheritance taxes and does not have an estate tax for deaths after 2004. Article VIII, section 17 of the Montana Constitution bars the state and every local government from taxing the sale or transfer of real property. What you do pay is the county clerk and recorder's recording fee, which MCA 7-4-2637 sets at $20 for the first page and $10 for each additional page of a standard document.

What happens if one heir refuses to sell the inherited Montana house?

Montana routes that dispute through a special statute. A cotenant may sue for partition under MCA 70-29-101, and for any action filed on or after October 1, 2013, 70-29-403 requires the court to decide first whether the land is heirs property under the Uniform Partition of Heirs Property Act. If it is, the court fixes fair market value, usually by an appraisal (70-29-410), and gives the cotenants who did not ask for a sale 45 days to buy out the ones who did at that value times their fractional share (70-29-411). If nobody buys, the court prefers partition in kind, and any sale it orders is an open-market sale through a Montana licensed broker unless sealed bids or an auction would serve the cotenants better (70-29-414).

Before You Sign

This guide is general information about selling inherited real property in Montana under the Montana Code Annotated 2025. Confirm anything that affects a particular parcel with the county clerk and recorder where it sits, the clerk of district court handling the estate, a tax professional, or a licensed Montana attorney before you list, sign, or distribute proceeds.

Sources:

It is not legal advice.

Information current as of September 27, 2026

Settled Estate is not a law firm, and this content is for informational purposes only and does not constitute legal advice. Probate laws and procedures in Montana can change. Consult with a qualified attorney for advice specific to your situation. Full disclaimer.

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