House Bill No. 424
Introduced By _______________________________________________________________________________
A Bill for an Act entitled: "An Act repealing state inheritance, estate, and generation-skipping taxes; amending sections 7-4-2613, 7-14-4654, 13-2-402, 15-1-205, 15-1-211, 15-1-406, 15-1-501, 15-1-503, 15-30-136, 60-11-1110, 72-1-103, 72-3-607, 72-3-618, 72-3-631, 72-3-807, and 72-3-1004, MCA; repealing sections 35-21-422, 72-3-1006, 72-4-304, 72-14-303, 72-16-101, 72-16-102, 72-16-201, 72-16-202, 72-16-203, 72-16-204, 72-16-205, 72-16-206, 72-16-207, 72-16-208, 72-16-209, 72-16-210, 72-16-211, 72-16-212, 72-16-213, 72-16-214, 72-16-215, 72-16-216, 72-16-217, 72-16-218, 72-16-301, 72-16-302, 72-16-303, 72-16-304, 72-16-305, 72-16-306, 72-16-307, 72-16-308, 72-16-311, 72-16-312, 72-16-313, 72-16-314, 72-16-315, 72-16-316, 72-16-317, 72-16-318, 72-16-319, 72-16-321, 72-16-322, 72-16-331, 72-16-332, 72-16-333, 72-16-334, 72-16-335, 72-16-336, 72-16-337, 72-16-338, 72-16-339, 72-16-340, 72-16-341, 72-16-342, 72-16-343, 72-16-344, 72-16-345, 72-16-346, 72-16-347, 72-16-348, 72-16-349, 72-16-401, 72-16-402, 72-16-403, 72-16-411, 72-16-412, 72-16-413, 72-16-414, 72-16-415, 72-16-416, 72-16-417, 72-16-418, 72-16-419, 72-16-420, 72-16-421, 72-16-422, 72-16-423, 72-16-424, 72-16-425, 72-16-431, 72-16-432, 72-16-433, 72-16-434, 72-16-435, 72-16-436, 72-16-437, 72-16-438, 72-16-439, 72-16-440, 72-16-441, 72-16-442, 72-16-443, 72-16-445, 72-16-446, 72-16-447, 72-16-448, 72-16-449, 72-16-450, 72-16-451, 72-16-452, 72-16-453, 72-16-454, 72-16-455, 72-16-456, 72-16-457, 72-16-458, 72-16-459, 72-16-460, 72-16-461, 72-16-462, 72-16-463, 72-16-464, 72-16-465, 72-16-471, 72-16-472, 72-16-473, 72-16-474, 72-16-475, 72-16-476, 72-16-477, 72-16-478, 72-16-479, 72-16-480, 72-16-481, 72-16-482, 72-16-491, 72-16-492, 72-16-493, 72-16-501, 72-16-502, 72-16-503, 72-16-504, 72-16-505, 72-16-601, 72-16-602, 72-16-603, 72-16-604, 72-16-605, 72-16-606, 72-16-607, 72-16-608, 72-16-609, 72-16-610, 72-16-611, 72-16-612, 72-16-701, 72-16-702, 72-16-703, 72-16-704, 72-16-705, 72-16-706, 72-16-801, 72-16-802, 72-16-803, 72-16-804, 72-16-805, 72-16-901, 72-16-902, 72-16-903, 72-16-904, 72-16-905, 72-16-906, 72-16-907, 72-16-908, 72-16-909, 72-16-910, 72-16-911, 72-16-912, 72-16-1001, 72-16-1002, 72-16-1003, 72-16-1004, 72-16-1005, 72-16-1006, and 72-16-1007, MCA; and providing an immediate effective date and a retroactive applicability date."
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 7-4-2613, MCA, is amended to read:
"7-4-2613. Documents subject to recording. The county clerk shall, upon the payment of the appropriate fees, record by printing, typewriting, or photographic, micrographic, or electronic process or by the use of prepared blank forms:
(1) (a) subject to subsection (1)(b), deeds, grants, transfers, certified copies of final judgments or decrees partitioning or affecting the title or possession of real property any part of which is situated in the county, contracts to sell or convey real estate and mortgages of real estate, releases of mortgages, powers of attorney to convey real estate, leases that have been acknowledged or proved, and abstracts of the instruments that have been acknowledged or proved;
(b) an instrument or deed evidencing either a division of real property or a merger of real property only if the instrument or deed is accompanied by a certification from the county treasurer that taxes and special assessments that have been assessed and levied have been paid;
(2) notices of buyer's interest in real property, notwithstanding any other requirement of law or rule relating to eligibility for recording of the deed, contract for deed, or other document relating to the notice of buyer's interest. However, if the instrument of conveyance underlying a notice of buyer's interest would be unrecordable, the clerk and recorder shall notify the buyer by certified mail that the underlying instrument is unrecordable and may be void;
except as provided in 72-16-503, a document on a form provided by the department of revenue certifying that the
holder of a nonprobate interest in real property is deceased and that the deceased's interest is terminated. A nonprobate
interest in real property is a joint tenancy interest, a life estate interest, or any other interest not requiring probate. The
document may be on the form used by the department of revenue for responding to the application for determination of
inheritance or estate tax. It must contain:
(a) a statement that the holder of the nonprobate interest has died and that the holder's interest in the property is terminated; and
(b) a certification by the county treasurer that the inheritance or estate tax, if any tax was due, has been paid or that
inheritance or estate tax was not due; (c)(b) a description of the property;
(4) certificates of births and deaths;
(5) wills devising real estate admitted to probate;
(6) official bonds;
(7) transcripts of judgments that by law are made liens upon real estate;
(8) instruments describing or relating to the individual property of married persons;
(9) all orders and decrees made by the district court in probate matters affecting real estate and that are required to be recorded;
(10) notice of preemption claims;
(11) notice and declaration of water rights;
(12) assignments for the benefit of creditors;
(13) affidavits of annual work done on mining claims;
(14) notices of mining locations and declaratory statements;
(15) estrays and lost property;
(16) a book containing appraisement of state lands; and
(17) other writings that are required or permitted by law to be recorded."
Section 2. Section 7-14-4654, MCA, is amended to read:
"7-14-4654. Exemption from
certain state taxes. All such revenue Revenue bonds issued pursuant to this part and the
interest or income therefrom from those bonds are exempt from all taxation in this state , other than gift, inheritance, and
Section 3. Section 13-2-402, MCA, is amended to read:
"13-2-402. Other reasons for cancellation. The election administrator shall cancel the registration of an elector:
(1) at the written request of the registered elector;
(2) if a certificate of the death of the elector is filed or if the elector is reported as deceased
by the department of public
health and human services in the department's reports submitted to the county under 72-16-217;
(3) if the elector is of unsound mind as established by a court;
(4) if the incarceration of the elector in a penal institution for a felony conviction is legally established;
(5) if a certified copy of a court order directing the cancellation is filed with the election administrator;
(6) if the elector is successfully challenged and not allowed to vote at an election upon determination of an election judge; or
(7) if a notice is received from another county or state that the elector has registered in that county or state."
Section 4. Section 15-1-205, MCA, is amended to read:
"15-1-205. Biennial report -- contents. (1) The department shall transmit to the governor 20 days before the meeting of the legislature and make available to the legislature a report of the department showing all the taxable property of the state, counties, and cities and its value. The department shall follow the provisions of 5-11-210 in preparing the report.
(2) The report or supplements to the report may also include:
(a) the gross dollar amount of revenue loss attributable to:
(i) personal income and corporation license tax exemptions;
(ii) property tax exemptions for which application to the department is necessary;
(iii) deferral of income;
(iv) credits allowed against Montana personal income tax or Montana corporation license tax, reported separately;
(v) deductions from income; and
(vi) any other identifiable preferential treatment of income or property;
(b) any change in tax revenue of the state or any unit of local government attributable to a change in federal tax law; and
(c) any change in the revenue of any unit of local government attributable to a change in state tax law.
(3) The data described in subsection (2), if reported, must be related to the income and age of the taxpayer whenever the information is available.
(4) (a) When reporting the data described in subsection (2)(a), the department shall identify any known purpose of the preferential treatment.
(b) Based upon the purpose of the preferential treatment, the department shall outline the available data necessary to determine the effectiveness of the preferential treatment.
(5) In reporting the data described in subsection (2), the department shall report any comparable data, if available, from Wyoming, Idaho, North Dakota, and South Dakota and from any other state that the department may choose.
(6) The department shall identify in a separate section of the report any changes that have been made or that are contemplated in property appraisal or assessment.
(7) The department may include a report, prepared by the department of transportation, showing the selling price of gasoline at the wholesale level in prime market centers of Montana and in surrounding states during the biennium, with indexes tabulated at sufficient intervals to show the comparative state price structures.
(8) The department shall include the inheritance tax information required by 72-16-202 in a separate section of the report."
Section 5. Section 15-1-211, MCA, is amended to read:
"15-1-211. Uniform tax review procedure -- notice -- appeal. (1) The department of revenue shall provide a uniform tax review procedure for all taxpayers, except as provided in subsection (1)(a).
(a) The tax review procedure described in this section applies to all taxes administered by the department and to all issues
arising from the administration of taxes, except
inheritance taxes, estate taxes, property taxes , and the issue of whether an
employer-employee relationship existed between the taxpayer and individuals, subjecting the taxpayer to the requirements
of chapter 30, part 2, or whether the employment relationship was that of an independent contractor. The procedure applies
to any revised assessment of centrally assessed property taxed pursuant to chapter 23.
(b) The term "taxpayers", as used in this section, includes all persons determined by the department to have a potential tax liability.
(2) (a) If the department determines that a request for a refund should be denied in whole or part, it shall notify the taxpayer of the determination. If the department determines that a person has failed to pay a sufficient tax, interest, or penalty, it shall provide the taxpayer with notice. The notice stops the running of any applicable statute of limitations regarding the assessment of the tax.
(b) A notice under this section must clearly state:
(i) the reasons for the department's determination that a refund is not due or that tax plus interest and penalty, if any,
(ii) the taxpayer's right to a review by the department, the taxpayer's right to appeal after a final department decision, and the taxpayer's right to a review of determinations by the department of labor and industry and board of labor appeals of whether an employer-employee relationship existed between the taxpayer and certain individuals or whether the employment relationship was that of an independent contractor;
(iii) that failure to notify the department within 30 days will result in a forfeiture of the taxpayer's right to contest the department's determination under this section or to file an appeal with the state tax appeal board;
(iv) that the taxpayer has 30 days to either notify the department in writing that the taxpayer does not agree with an assessment or pay the amount assessed;
(v) that a warrant for distraint placing a lien on the taxpayer's property may be issued unless the taxpayer notifies the department that the taxpayer disagrees with an assessment or pays within 30 days; and
(vi) that the notice stops the running of the statute of limitations regarding the assessment of the tax.
(3) (a) A taxpayer shall notify the department, in writing, that the taxpayer objects to the determination within 30 days from the date that the notice is mailed. The notification by the taxpayer is not required to specify the reasons for the disagreement or be in any particular form unless the taxpayer is objecting to a determination that an employer-employee relationship existed between the taxpayer and individuals, subjecting the taxpayer to the requirements of chapter 30, part 2. If the taxpayer does not notify the department within 30 days:
(i) an assessment becomes final and the assessed tax, plus any interest and penalty, must be paid;
(ii) the taxpayer waives any further right to review under this section or to appeal to the state tax appeal board; and
(iii) a warrant for distraint may be issued without further opportunity to be heard on the assessment.
(b) (i) A taxpayer who notifies the department pursuant to subsection (3)(a) that the taxpayer disagrees with a tax assessment shall present the objections, the reasons for the objections, and any other information to the administrator of the division that administers the tax or to the administrator's designee within 60 days after the notice referred to in subsection (3)(a) is mailed. The reasons for objections may be provided in writing, by telephone, or, if requested by the taxpayer, at an informal conference. An informal conference is not subject to the Montana Administrative Procedure Act.
(ii) An objection received by the department pursuant to subsection (3)(a) stating that the taxpayer disagrees with the department's determination that an employer-employee relationship existed between the taxpayer and certain individuals, subjecting the taxpayer to the requirements of chapter 30, part 2, must be referred to the department of labor and industry for appeal procedures pursuant to 39-51-2403 and 39-51-2410.
(c) Within 60 days after the taxpayer has presented
his objections, as provided in subsection (3)(b), the administrator or a
designee shall issue a written decision addressing the taxpayer's objections and describing the reasons for the
determination. The administrator's decision must also clearly set forth the taxpayer's review rights. The administrator's
decision must be provided to the taxpayer and the director of revenue.
(4) (a) A taxpayer shall notify the department in writing that the taxpayer objects to the administrator's decision within 30 days from the date that the decision is mailed, or the taxpayer may appeal to the state tax appeal board as provided in subsection (6). If an objection is not made within 30 days, the administrator's decision and any assessment become final. By failing to object, the taxpayer waives any further right to review or appeal and a warrant for distraint may be issued without further opportunity to be heard on the assessment.
(b) Except as provided in subsection (6), a taxpayer who objects to the administrator's decision pursuant to subsection (4)(a) shall present the taxpayer's objections, the reasons for the objections, and any other information to the director of revenue or the director's designee within 60 days after the notice referred to in subsection (4)(a) is mailed. The director or the designee may consider written information, hold a telephone conference, or conduct an informal conference, none of which are subject to the Montana Administrative Procedure Act.
(c) Within 60 days after the taxpayer has presented the objections, the director or the designee shall issue a written decision addressing the objections and describing the reasons for the decision. The director's decision is the final decision and assessment of the department.
(5) The taxpayer shall pay the assessment within 30 days after being mailed a copy of the final decision and assessment unless an appeal is filed with the state tax appeal board. If an appeal with the board is filed within 30 days after the final decision is mailed, payment is not due until final resolution by the board or, if further appeals are filed, by the appropriate court. However, any interest required by law must continue to accrue.
(6) (a) A taxpayer who validly objects to the administrator's decision may elect to file an appeal with the state tax appeal board. The appeal must be filed within 30 days after mailing an objection to the administrator's decision. If an appeal is filed, the administrator's decision is the final decision of the department.
(b) If the director notifies the board within 30 days after an appeal is filed that the director has not had an opportunity to review the administrator's decision and the director believes that a review may be helpful in resolving the controversy, the board shall stay the appeal for a time that the board considers reasonable, not to exceed 90 days except by the mutual consent of both parties. The taxpayer shall provide the taxpayer's objections and reasons for the objections to the director so that the director or the director's designee may review the controversy and issue a decision within the period of the stay granted by the board. If the taxpayer is dissatisfied with the director's decision, the stay must be lifted and the appeal resumed.
(7) The time limits in this section must be applied and interpreted as provided in Rule 6 of the Montana Rules of Civil Procedure, including additional time for mailing. Any time limit may be extended by mutual consent of the department and the taxpayer. The department shall consent to all reasonable requests for extension of deadlines.
(8) (a) The director of revenue or the director's designee is authorized to enter into an agreement with any taxpayer relating to the taxpayer's liability with respect to a tax administered by the department for any taxable period.
(b) An agreement under the provisions of subsection (8)(a) is final and conclusive, and
, except upon a showing of fraud,
malfeasance, or misrepresentation of a material fact:
(i) the agreement may not be reopened as to matters agreed upon or be modified by any officer, employee, or agent of this state; and
(ii) in any suit, action, or proceeding under the agreement or any determination, assessment, collection, payment, abatement, refund, or credit made in accordance with the agreement, the agreement may not be annulled, modified, set aside, or disregarded."
Section 6. Section 15-1-406, MCA, is amended to read:
"15-1-406. Declaratory judgment. (1) An aggrieved taxpayer may bring a declaratory judgment action in the district court seeking a declaration that:
(a) an administrative rule or method or procedure of assessment or imposition of tax adopted or used by the department of revenue is illegal or improper; or
(b) a tax authorized by the state or one of its subdivisions was illegally or unlawfully imposed or exceeded the taxing authority of the entity imposing the tax.
(2) The action must be brought within 90 days of the date that the notice of the tax due was sent to the taxpayer or, in the case of an assessment covered by the uniform tax review procedure set forth in 15-1-211, within 90 days of the date of the department director's final decision. The court shall consolidate all actions brought under subsection (1) that challenge the same tax. The decision of the court applies to all similarly situated taxpayers, except those taxpayers who are excluded under 15-1-407.
(3) The taxes that are being challenged under this section must be paid under protest when due as a condition of continuing
the action. Property taxes are paid under protest as provided in 15-1-402. All other taxes administered by the department
except inheritance and estate taxes, are paid under protest by filing timely claims for refund and by following the uniform
tax review procedures of 15-1-211. Inheritance and estate taxes are paid under protest by following the procedures set forth
in Title 72.
(4) The remedy authorized by this section may not be used to challenge the:
(a) market value of property under a property tax unless the challenge is to the legality of a particular methodology that is being applied to similarly situated taxpayers; or
(b) legality of a tax other than a property tax
, inheritance tax, or estate tax unless the review pursuant to 15-1-211 has been
(5) The remedy authorized by this section is the exclusive method of obtaining a declaratory judgment concerning a tax authorized by the state or one of its subdivisions. The remedy authorized by this section supersedes the Uniform Declaratory Judgments Act established in Title 27, chapter 8. This section does not affect actions for declaratory judgments under 2-4-506."
Section 7. Section 15-1-501, MCA, is amended to read:
"15-1-501. Disposition of money from certain designated license and other taxes. (1) The state treasurer shall deposit to the credit of the state general fund in accordance with the provisions of subsection (6) all money received from the collection of:
(a) fees from driver's licenses, motorcycle endorsements, and duplicate driver's licenses as provided in 61-5-121;
(b) electrical energy producer's license taxes under chapter 51;
(c) liquor license taxes under Title 16; and
(d) telephone company license taxes under chapter 53
; and (e) inheritance and estate taxes under Title 72, chapter 16.
(2) All money received from the collection of income taxes under chapter 30
of this title must, in accordance with the
provisions of subsection (6), be deposited as follows:
(a) 91.3% of the taxes to the credit of the state general fund;
(b) 8.7% of the taxes to the credit of the debt service account for long-range building program bonds as described in 17-5-408; and
(c) all interest and penalties to the credit of the state general fund.
(3) All money received from the collection of corporation license and income taxes under chapter 31
of this title, except as
provided in 15-31-702, must, in accordance with the provisions of subsection (6), be deposited as follows:
(a) 89.5% of the taxes to the credit of the state general fund;
(b) 10.5% of the taxes to the credit of the debt service account for long-range building program bonds as described in 17-5-408; and
(c) all interest and penalties to the credit of the state general fund.
(4) The department of revenue shall also deposit to the credit of the state general fund all money received from the collection of license taxes and fees and all net revenue and receipts from all other sources under the operation of the Montana Alcoholic Beverage Code.
(5) Oil and natural gas production taxes allocated under 15-36-324(7)(a) must be deposited in the general fund.
(6) Notwithstanding any other provision of law, the distribution of tax revenue must be made according to the provisions of the law governing allocation of the tax that were in effect for the period in which the tax revenue was recorded for accounting purposes. Tax revenue must be recorded as prescribed by the department of administration, pursuant to 17-1-102(2) and (5), in accordance with generally accepted accounting principles.
(7) All refunds of taxes must be attributed to the funds in which the taxes are currently being recorded. All refunds of interest and penalties must be attributed to the funds in which the interest and penalties are currently being recorded."
Section 8. Section 15-1-503, MCA, is amended to read:
"15-1-503. Refund of overpayment -- procedure. (1) When there has been an overpayment of
the inheritance tax
collected by county treasurers or any other tax collected by the department of revenue and there is no law providing for a
refund, the department shall refund the amount of the overpayment to the taxpayer, plus any interest and penalty due the
taxpayer, as provided in subsection (2) of this section.
No A refund or payment shall be is not allowed unless a claim is filed by the taxpayer before the expiration of 5 years
from the time that the tax was paid. Within 6 months after the claim is filed, the department shall examine the claim and
either approve or disapprove it. If the claim is approved, the credit or refund shall must be made to the taxpayer within 60
days after the claim is approved ;. if If the claim is disallowed, the department shall so notify the taxpayer and shall grant a
hearing on the claim. If the department disapproves a claim after holding a hearing, the determination of the department
may be reviewed as provided by 15-30-148."
Section 9. Section 15-30-136, MCA, is amended to read:
"15-30-136. Computation of income of estates or trusts -- exemption. (1) Except as otherwise provided in this chapter, "gross income" of estates or trusts means all income from whatever source derived in the taxable year, including but not limited to the following items:
(b) interest received or accrued, including interest received on obligations of another state or territory or a county, municipality, district, or other political subdivision of the state, but excluding interest income from obligations of:
(i) the United States government or the state of Montana;
(ii) a school district; or
(iii) a county, municipality, district, or other political subdivision of the state;
(c) income from partnerships and other fiduciaries;
(d) gross rents and royalties;
(e) gain from sale or exchange of property, including those gains that are excluded from gross income for federal fiduciary income tax purposes by section 641(c) of the Internal Revenue Code of 1954, as amended;
(f) gross profit from trade or business; and
(g) refunds recovered on federal income tax, to the extent that the deduction of the tax resulted in a reduction of Montana income tax liability.
(2) In computing net income, there are allowed as deductions:
(a) interest expenses deductible for federal tax purposes according to section 163 of the Internal Revenue Code of 1954, as amended;
(b) taxes paid or accrued within the taxable year, including but not limited to federal income tax, but excluding Montana income tax;
(c) that fiduciary's portion of depreciation or depletion
which that is deductible for federal tax purposes according to
sections 167, 611, and 642 of the Internal Revenue Code of 1954, as amended;
(d) charitable contributions that are deductible for federal tax purposes according to section 642(c) of the Internal Revenue Code of 1954, as amended;
(e) administrative expenses claimed for federal income tax purposes, according to sections 212 and 642(g) of the Internal
Revenue Code of 1954, as amended
, if the expenses were not claimed as a deduction in the determination of Montana
(f) losses from fire, storm, shipwreck, or other casualty or from theft, to the extent not compensated for by insurance or otherwise, that are deductible for federal tax purposes according to section 165 of the Internal Revenue Code of 1954, as amended;
(g) net operating loss deductions allowed for federal income tax under section 642(d) of the Internal Revenue Code of 1954, as amended, except estates may not claim losses that are deductible on the decedent's final return;
(h) Montana income tax refunds or tax refund credits.
(3) The following additional deductions are allowed in deriving taxable income of estates and trusts:
(a) any amount of income for the taxable year currently required to be distributed to beneficiaries for the year;
(b) any other amounts properly paid or credited or required to be distributed for the taxable year.
(4) The exemption allowed for estates and trusts is that exemption provided in 15-30-112(2)(a) and (6)."
Section 10. Section 60-11-1110, MCA, is amended to read:
"60-11-1110. Tax exemption. Bonds and refunding bonds, their transfer, and their income,
(including any profits made
on their sale ), are free from taxation by the state or any political subdivision or instrumentality of the state , except for
inheritance and estate taxes."
Section 11. Section 72-1-103, MCA, is amended to read:
"72-1-103. General definitions. Subject to additional definitions contained in the subsequent chapters that are applicable to specific chapters, parts, or sections and unless the context otherwise requires, in chapters 1 through 5, the following definitions apply:
(1) "Agent" includes an attorney-in-fact under a durable or nondurable power of attorney, an individual authorized to make decisions concerning another's health care, and an individual authorized to make decisions for another under a natural death act.
(2) "Application" means a written request to the clerk for an order of informal probate or appointment under chapter 3, part 2.
(3) "Beneficiary", as it relates to:
(a) a trust beneficiary, includes a person who has any present or future interest, vested or contingent, and also includes the owner of an interest by assignment or other transfer;
(b) a charitable trust, includes any person entitled to enforce the trust;
(c) a beneficiary of a beneficiary designation, refers to a beneficiary of:
(i) an account with POD designation or a security registered in beneficiary form (TOD); or
(ii) any other nonprobate transfer at death; and
(d) a beneficiary designated in a governing instrument, includes a grantee of a deed; a devisee; a trust beneficiary; a beneficiary of a beneficiary designation; a donee; and a person in whose favor a power of attorney or a power held in any individual, fiduciary, or representative capacity is exercised.
(4) "Beneficiary designation" refers to a governing instrument naming a beneficiary of:
(a) an account with POD designation or a security registered in beneficiary form (TOD); or
(b) any other nonprobate transfer at death.
(5) "Child" includes an individual entitled to take as a child under chapters 1 through 5 by intestate succession from the parent whose relationship is involved and excludes a person who is only a stepchild, a foster child, a grandchild, or any more remote descendant.
(6) (a) "Claims", in respect to estates of decedents and protected persons, includes liabilities of the decedent or protected person, whether arising in contract, in tort, or otherwise, and liabilities of the estate that arise at or after the death of the decedent or after the appointment of a conservator, including funeral expenses and expenses of administration.
(b) The term does not include estate
or inheritance taxes or demands or disputes regarding title of a decedent or protected
person to specific assets alleged to be included in the estate.
(7) "Clerk" or "clerk of court" means the clerk of the district court.
(8) "Conservator" means a person who is appointed by a court to manage the estate of a protected person.
(9) "Court" means the district court in this state having jurisdiction in matters relating to the affairs of decedents.
(10) "Descendant" of an individual means all of the individual's descendants of all generations, with the relationship of parent and child at each generation being determined by the definition of child and parent contained in this section.
(11) "Devise" when used as a noun means a testamentary disposition of real or personal property and when used as a verb means to dispose of real or personal property by will.
(12) "Devisee" means a person designated in a will to receive a devise. For purposes of chapter 3, in the case of a devise to an existing trust or trustee or to a trustee on trust described by will, the trust or trustee is the devisee and the beneficiaries are not devisees.
(13) "Disability" means cause for a protective order as described by 72-5-409.
(14) "Distributee" means any person who has received property of a decedent from the decedent's personal representative other than as a creditor or purchaser. A testamentary trustee is a distributee only to the extent of distributed assets or increment thereto remaining in the trustee's hands. A beneficiary of a testamentary trust to whom the trustee has distributed property received from a personal representative is a distributee of the personal representative. For purposes of this provision, "testamentary trustee" includes a trustee to whom assets are transferred by will, to the extent of the devised assets.
(15) "Estate" includes the property of the decedent, trust, or other person whose affairs are subject to chapters 1 through 5 as originally constituted and as it exists from time to time during administration.
(16) "Exempt property" means that property of a decedent's estate that is described in 72-2-413.
(17) "Fiduciary" includes a personal representative, guardian, conservator, and trustee.
(18) "Foreign personal representative" means a personal representative appointed by another jurisdiction.
(19) "Formal proceedings" means proceedings conducted before a judge with notice to interested persons.
(20) "Governing instrument" means a deed; will; trust; insurance or annuity policy; account with POD designation; security registered in beneficiary form (TOD); pension, profit-sharing, retirement, or similar benefit plan; instrument creating or exercising a power of appointment or a power of attorney; or dispositive, appointive, or nominative instrument of any similar type.
(21) "Guardian" means a person who has qualified as a guardian of a minor or incapacitated person pursuant to testamentary or court appointment but excludes one who is merely a guardian ad litem.
(22) "Heirs", except as controlled by 72-2-721, means persons, including the surviving spouse and the state, who are entitled under the statutes of intestate succession to the property of a decedent.
(23) "Incapacitated person" has the meaning provided in 72-5-101.
(24) "Informal proceedings" means proceedings conducted without notice to interested persons by the clerk of court for probate of a will or appointment of a personal representative.
(25) "Interested person" includes heirs, devisees, children, spouses, creditors, beneficiaries, and any others having a property right in or claim against a trust estate or the estate of a decedent, ward, or protected person. The term also includes persons having priority for appointment as personal representative and other fiduciaries representing interested persons. The meaning as it relates to particular persons may vary from time to time and must be determined according to the particular purposes of and matter involved in any proceeding.
(26) "Issue" of a person means a descendant as defined in subsection (10).
(27) "Joint tenants with the right of survivorship" includes co-owners of property held under circumstances that entitle one or more to the whole of the property on the death of the other or others but excludes forms of co-ownership registration in which the underlying ownership of each party is in proportion to that party's contribution.
(28) "Lease" includes an oil, gas, coal, or other mineral lease.
(29) "Letters" includes letters testamentary, letters of guardianship, letters of administration, and letters of conservatorship.
(30) "Minor" means a person who is under 18 years of age.
(31) "Mortgage" means any conveyance, agreement, or arrangement in which property is used as security.
(32) "Nonresident decedent" means a decedent who was domiciled in another jurisdiction at the time of death.
(33) "Organization" means a corporation, business trust, estate, trust, partnership, joint venture, association, government or governmental subdivision or agency, or any other legal or commercial entity.
(34) "Parent" includes any person entitled to take, or who would be entitled to take if the child died without a will, as a parent under chapters 1 through 5 by intestate succession from the child whose relationship is in question and excludes any person who is only a stepparent, foster parent, or grandparent.
(35) "Payor" means a trustee, insurer, business entity, employer, government, governmental agency or subdivision, or any other person authorized or obligated by law or a governing instrument to make payments.
(36) "Person" means an individual, a corporation, an organization, or other legal entity.
(37) "Personal representative" includes executor, administrator, successor personal representative, special administrator, and persons who perform substantially the same function under the law governing their status. "General personal representative" excludes special administrator.
(38) "Petition" means a written request to the court for an order after notice.
(39) "Proceeding" includes action at law and suit in equity.
(40) "Property" includes both real and personal property or any interest in that property and means anything that may be the subject of ownership.
(41) "Protected person" has the meaning provided in 72-5-101.
(42) "Protective proceeding" has the meaning provided in 72-5-101.
(43) "Security" includes any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in an oil, gas, or mining title or lease or in payments out of production under such a title or lease; collateral trust certificate; transferable share; voting trust certificate; in general, any interest or instrument commonly known as a security; any certificate of interest or participation; or any temporary or interim certificate, receipt, or certificate of deposit for or any warrant or right to subscribe to or purchase any of the foregoing.
(44) "Settlement", in reference to a decedent's estate, includes the full process of administration, distribution, and closing.
(45) "Special administrator" means a personal representative as described by chapter 3, part 7.
(46) "State" means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or insular possession subject to the jurisdiction of the United States.
(47) "Successor personal representative" means a personal representative, other than a special administrator, who is appointed to succeed a previously appointed personal representative.
(48) "Successors" means persons, other than creditors, who are entitled to property of a decedent under the decedent's will or chapters 1 through 5.
(49) "Supervised administration" refers to the proceedings described in chapter 3, part 4.
(50) "Survive" means that an individual has neither predeceased an event, including the death of another individual, nor is considered to have predeceased an event under 72-2-114 or 72-2-712. The term includes its derivatives, such as "survives", "survived", "survivor", and "surviving".
(51) "Testacy proceeding" means a proceeding to establish a will or determine intestacy.
(52) "Testator" includes an individual of either sex.
(53) "Trust" includes an express trust, private or charitable, with additions thereto, wherever and however created. The term also includes a trust created or determined by judgment or decree under which the trust is to be administered in the manner of an express trust. The term excludes other constructive trusts and excludes resulting trusts; conservatorships; personal representatives; trust accounts as defined in 72-6-111 and Title 72, chapter 6, parts 2 and 3; custodial arrangements pursuant to chapter 26 of this title; business trusts providing for certificates to be issued to beneficiaries; common trust funds; voting trusts; security arrangements; liquidation trusts; trusts for the primary purpose of paying debts, dividends, interest, salaries, wages, profits, pensions, or employee benefits of any kind; and any arrangement under which a person is nominee or escrowee for another.
(54) "Trustee" includes an original, additional, or successor trustee, whether or not appointed or confirmed by court.
(55) "Ward" means an individual described in 72-5-101.
(56) "Will" includes codicil and any testamentary instrument that merely appoints an executor, revokes or revises another will, nominates a guardian, or expressly excludes or limits the right of an individual or class to succeed to property of the decedent passing by intestate succession."
Section 12. Section 72-3-607, MCA, is amended to read:
"72-3-607. Inventory -- appraisal
-- copy to department of revenue. (1) Within the time required for the filing of a
United States estate tax return plus any extensions granted by the internal revenue service, a personal representative, who is
not a special administrator or a successor to another representative who has previously discharged this duty, shall prepare
and file or mail an inventory, which inventory shall must include a listing of all property which that:
(a) the decedent owned, had an interest in or control over, individually, in common, or jointly, or otherwise had at the time
(b) the decedent had possessory or dispository rights over at the time of
his death or had disposed of for less than its fair
market value within 3 years of his death; or
(c) was affected by the decedent's death for the purpose of
inheritance or estate taxes.
(2) The inventory
shall must include a statement of the full and true value of the decedent's interest in every each item
listed in such the inventory. In this connection, the personal representative shall appoint one or more qualified and
disinterested persons to assist him in ascertaining the fair market value as of the date of the decedent's death of all assets
included in the estate. Different persons may be employed to appraise different kinds of assets included in the estate. The
names and addresses of any appraiser shall must be indicated on the inventory with the item or items he that the appraiser
(3) The personal representative shall send a copy of the inventory to interested persons who request it
, or he may file the
original of the inventory with the court. In any event, a copy of the inventory and statement of value shall be mailed to the
department of revenue."
Section 13. Section 72-3-618, MCA, is amended to read:
"72-3-618. Persons dealing with personal representative -- protection. (1) A person who in good faith and without
notice either assists a personal representative or deals with
him a personal representative for value is protected as if the
personal representative properly exercised his the personal representative's power. The fact that a person knowingly deals
with a personal representative does not alone require the person to inquire into the existence of a power or the propriety of
its exercise. Except for restrictions on powers of supervised personal representatives which that are endorsed on letters as
provided in 72-3-404(3), no a provision in any will or order of court purporting to limit the power of a personal
representative is not effective except as to persons with actual knowledge thereof of the provision.
(2) A person is not bound to see to the proper application of estate assets paid or delivered to a personal representative.
(3) The protection
here expressed in this section extends to instances in which some procedural irregularity or
jurisdictional defect occurred in proceedings leading to the issuance of letters, including a case in which the alleged
decedent is found to be alive. The protection here expressed in this section is not by substitution for that provided by
comparable provisions of the laws relating to commercial transactions and laws simplifying transfers of securities by
fiduciaries , nor does it in any way limit the provisions of 72-16-432 and 72-16-433."
Section 14. Section 72-3-631, MCA, is amended to read:
"72-3-631. Compensation of personal representative. (1) A personal representative is entitled to reasonable
his services. Such The compensation shall may not exceed 3% of the first $40,000 of the value of the
estate as reported for federal estate tax or state inheritance tax purposes, whichever is larger, purposes and 2% of the value
of the estate in excess of $40,000 as reported for federal estate tax or state inheritance tax purposes, whichever is larger
purposes. However, a personal representative is entitled to a minimum compensation of the lesser of $100 or the value of
the gross estate.
(2) In proceedings conducted for the termination of joint tenancies, the compensation of the personal representative
may not exceed 2% of the interest passing.
(3) In proceedings conducted for the termination of a life estate, the compensation allowed the personal representative
may not exceed 2% of the value of the life estate if it is terminated in connection with a probate or joint tenancy
termination. If a life estate is terminated separately, the personal representative's compensation shall may not exceed 2% of
the value of the estate, except that it shall but it may not be less than $100.
(4) If there is more than one personal representative, only one compensation is allowed.
(5) The court may allow additional compensation for extraordinary services.
Such The additional compensation shall may
not be greater than the amount which that is allowed for the original compensation.
(6) If the will provides for the compensation of the personal representative and there is no contract with the decedent
regarding compensation, the personal representative may renounce the provision before qualifying and be entitled to
compensation under the terms of this section. A personal representative also may renounce
his the right to all or any part of
the compensation. A written renunciation of fee may be filed with the court."
Section 15. Section 72-3-807, MCA, is amended to read:
"72-3-807. Classification of claims as to priority of payment. (1) If the applicable assets of the estate are insufficient to pay all claims in full, the personal representative shall make payment in the following order:
(a) costs and expenses of administration;
(b) reasonable funeral expenses and reasonable and necessary medical and hospital expenses of the last illness of the
decedent, including compensation of persons attending
him the decedent;
(c) federal estate
and Montana state estate and inheritance taxes;
(d) debts with preference under federal and Montana law;
(e) other federal and Montana state taxes;
(f) all other claims.
No A preference shall may not be given in the payment of any claim over any other claim of the same class, and a
claim due and payable shall is not be entitled to a preference over claims not due."
Section 16. Section 72-3-1004, MCA, is amended to read:
"72-3-1004. Closing estate by sworn statement of personal representative. (1) Unless prohibited by order of the court
and except for estates being administered in supervised administration proceedings, a personal representative may close an
estate by filing with the court no earlier than 6 months after the date of original appointment of a general personal
representative for the estate
, a verified statement stating that he the personal representative, or a successor prior personal
representative whom he has succeeded, has:
(a) determined that the time limitation for presentation of creditors' claims has expired;
(b) fully administered the estate of the decedent by making payment, settlement, or other disposition of all claims
that were presented, expenses of administration, and estate , inheritance, and other death taxes, except as specified in the
statement, and that the assets of the estate have been distributed to the persons entitled; if any claims remain undischarged,
the statement shall must state whether the personal representative has distributed the estate subject to possible liability with
the agreement of the distributees , or it shall must state in detail other arrangements which that have been made to
accommodate outstanding liabilities; and
(c) sent a copy
thereof of the statement to all distributees of the estate and to all creditors or other claimants of whom he
the personal representative is aware whose claims are neither paid nor barred and has furnished a full account in writing of
his the administration to the distributees whose interests are affected by the accounting thereby; and (d) complied with the provisions of 72-3-1006.
no proceedings involving the personal representative are not pending in the court 1 year after the closing statement is
filed, the appointment of the personal representative terminates."
NEW SECTION. Section 17. Repealer. (1) Sections 35-21-422, 72-3-1006, 72-4-304, 72-14-303, 72-16-101, 72-16-102, 72-16-201, 72-16-202, 72-16-203, 72-16-204, 72-16-205, 72-16-206, 72-16-207, 72-16-208, 72-16-209, 72-16-210, 72-16-211, 72-16-212, 72-16-213, 72-16-214, 72-16-215, 72-16-216, 72-16-217, 72-16-218, 72-16-301, 72-16-302, 72-16-303, 72-16-304, 72-16-305, 72-16-306, 72-16-307, 72-16-308, 72-16-311, 72-16-312, 72-16-313, 72-16-314, 72-16-315, 72-16-316, 72-16-317, 72-16-318, 72-16-319, 72-16-321, 72-16-322, 72-16-331, 72-16-332, 72-16-333, 72-16-334, 72-16-335, 72-16-336, 72-16-337, 72-16-338, 72-16-339, 72-16-340, 72-16-341, 72-16-342, 72-16-343, 72-16-344, 72-16-345, 72-16-346, 72-16-347, 72-16-348, 72-16-349, 72-16-401, 72-16-402, 72-16-403, 72-16-411, 72-16-412, 72-16-413, 72-16-414, 72-16-415, 72-16-416, 72-16-417, 72-16-418, 72-16-419, 72-16-420, 72-16-421, 72-16-422, 72-16-423, 72-16-424, 72-16-425, 72-16-431, 72-16-432, 72-16-433, 72-16-434, 72-16-435, 72-16-436, 72-16-437, 72-16-438, 72-16-439, 72-16-440, 72-16-441, 72-16-442, 72-16-443, 72-16-445, 72-16-446, 72-16-447, 72-16-448, 72-16-449, 72-16-450, 72-16-451, 72-16-452, 72-16-453, 72-16-454, 72-16-455, 72-16-456, 72-16-457, 72-16-458, 72-16-459, 72-16-460, 72-16-461, 72-16-462, 72-16-463, 72-16-464, 72-16-465, 72-16-471, 72-16-472, 72-16-473, 72-16-474, 72-16-475, 72-16-476, 72-16-477, 72-16-478, 72-16-479, 72-16-480, 72-16-481, 72-16-482, 72-16-491, 72-16-492, 72-16-493, 72-16-501, 72-16-502, 72-16-503, 72-16-504, 72-16-505, 72-16-601, 72-16-602, 72-16-603, 72-16-604, 72-16-605, 72-16-606, 72-16-607, 72-16-608, 72-16-609, 72-16-610, 72-16-611, 72-16-612, 72-16-701, 72-16-702, 72-16-703, 72-16-704, 72-16-705, 72-16-706, 72-16-801, 72-16-802, 72-16-803, 72-16-804, 72-16-805, 72-16-901, 72-16-902, 72-16-903, 72-16-904, 72-16-905, 72-16-906, 72-16-907, 72-16-908, 72-16-909, 72-16-910, 72-16-911, 72-16-912, 72-16-1001, 72-16-1002, 72-16-1003, 72-16-1004, 72-16-1005, 72-16-1006, and 72-16-1007, MCA, are repealed.
NEW SECTION. Section 18. Effective date -- retroactive applicability. [This act] is effective on passage and approval and applies retroactively, within the meaning of 1-2-109, to deaths occurring after December 31, 1996.