How Montana Living Trusts Are Handled

A living trust in the state of Montana does not avoid taxes or debts unless it is irrevocable.

In Montana, living trusts are designed to separate the legal ownership of property from the original owner (trustor). The trustor creates an agreement (the trust) and initiates separate legal transactions to transfer the ownership of property to the trust.

Revocable or Irrevocable

The state of Montana recognizes living trusts as revocable, unless the trust agreement expressly makes it irrevocable. Death of the trustor also makes the trust irrevocable.

Taxes

A living trust in Montana does not mitigate taxes unless it is irrevocable. Any income earned is taxed to the trustor when the trust is revocable. When the trustor dies, the contents of the trust are taxed as a part of the trustor's estate.

Debts

The title to the contents of a revocable trust can be changed at any time. The state of Montana recognizes the content as property of the trustor. Any debts, including nursing home costs, can be charged to the trust or the trustor.

Probate

While a revocable trust in Montana is exempt from probate, the fees associated with the trust management can exceed probate fees.

References

• Montana State University: Revocable Living Trusts
• State Bar of Montana: Living Trust Scams