What Types of Deeds Are Recognized in Montana?
A Montana property owner can transfer title during the owner’s life using one of three types of deeds recognized by Montana law. The difference between Montana’s three deeds—quitclaim deeds, special warranty deeds, and warranty deeds—is the warranty of title, if any, the deed provides.
Montana Quitclaim Deed Form
A property owner who signs and records a Montana quitclaim deed transfers real estate with no warranty of title. The owner does not guarantee that the deed transfers undisputed ownership. A quitclaim deed transfers whatever title the current owner has, but the current owner makes no promises regarding the title’s validity or the status of liens.1 The new owner assumes the risk of problems with the property’s title.
Quitclaim deeds are often appropriate when the new owner provides no consideration for the transfer. Deeds dividing property under a divorce decree or transferring legal ownership to a revocable living trust are often quitclaim deeds.
Montana Warranty Deed Form
A property owner who signs and records a Montana warranty deed transfers real estate with complete warranty of title. The current owner guarantees that the new owner will receive a clear, undisputed title—subject only to exceptions listed in the deed.2 The current owner bears all risk of unknown title problems. The new owner can bring a breach of warranty claim against the prior owner if problems arise with the property’s title.3
The warranty of title a Montana warranty deed provides protects the new owner against undisclosed liens, boundary disputes, and third-party claims on the property. Warranty deeds are often used for arms-length sales of residential real estate.
Montana Special Warranty Deed Form
A property owner who signs and records a Montana special warranty deed provides partial warranty of title. Special warranty deeds guarantee that a property’s title has no problems caused by the current owner’s actions.4 Issues that arose before the current owner took title are the new owner’s responsibility.
A special warranty deed divides the risk of title problems between the current owner and new owner. The new owner can sue the current owner only for title problems that arose while the current owner held title. Montana special warranty deeds—which are sometimes called grant, bargain, and sale deeds or just grant deeds—are often used for commercial real estate sales.
What Types of Estate Planning Deeds Are Used in Montana?
Montana recognizes two types of deeds designed for estate planning. Each estate-planning deed lets real estate avoid probate by transferring ownership effective at the owner’s death.
Montana Transfer-on-Death Deeds
A Montana transfer-on-death deed form—also called a TOD deed—names a beneficiary who takes title to the property automatically when the owner dies.5 A property owner signs and records a TOD deed during life.6 The deed is revocable and has no effect on the owner’s property rights until the owner’s death.7
TOD deeds are a popular estate planning tool in Montana because they do not prevent the owner from selling, transferring, or mortgaging property while the owner remains living.
Montana Life Estate Deeds
A Montana life estate deed lets a real estate owner keep a property for life and give another person (the remainderman) ownership after the owner’s death.8 The main difference between a life estate deed and a TOD deed is that a life estate deed’s remainderman has a vested future interest while the owner is still alive.9 The owner—now called the life tenant—cannot take back the remainderman’s future interest. A life tenant can transfer only the life estate—the right to possess the property during the owner’s life—not complete ownership.10
What Are the Ways in Which Multiple Owners Can Jointly Own Montana Real Estate?
A deed transferring property to multiple new owners should designate the form of co-ownership the new owners will use. Montana law offers three options: tenancy in common, joint tenancy with right of survivorship, and partnership.11
Tenancy in Common
Tenancy in common is Montana’s default co-ownership form.12 Tenants in common hold separate interests—usually expressed as fractions or percentages. Two or more persons who co-own Montana real estate are tenants in common unless a deed declares them joint tenants or they take title as partners for partnership purposes.13 A tenancy in common interest becomes part of a co-owner’s probate estate when he or she dies.
Joint Tenancy with Right of Survivorship
Joint tenants hold title mutually—rather than in separate, fractional parts. Co-owners who are joint tenants have a right of survivorship—which means a surviving co-owner automatically receives a deceased co-owner’s interest. Property owned by joint tenants with right of survivorship therefore bypasses probate when the first owner dies.
A Montana deed to multiple co-owners must expressly declare that they take title as joint tenants with right of survivorship.14 Montana law lets a sole owner create a joint tenancy by recording a deed that transfers property to the owner and another person as joint tenants.15
Tenancy by the Entirety
Montana does not recognize a co-ownership form called tenancy by the entirety. In states that authorize it, tenancy by the entirety is similar to joint tenancy with right of survivorship but is possible only for married spouses.
Montana law allows two or more persons to co-own Montana real estate as partners. Co-owners hold title as partners if they own property for partnership purposes and if the deed giving them the property says that they take title as partners.16
Real Estate Ownership through Trusts
Two or more persons can jointly possess and control Montana real estate as beneficiaries and co-trustees of a living trust. They must first create a trust instrument that forms the trust and defines its terms. They then transfer legal ownership of the property to the trust. A deed conveying Montana real estate to a trust must identify the trust and declare that the new owner named in the deed (the grantee) holds title as trustee.17
What Are the Rules for Spousal Ownership of Montana Real Estate?
Montana laws that apply specifically to married individuals can affect how a property owner holds title to real estate and treats assets in an estate plan.
Montana Homestead Rights
Montana gives special protection to real estate that qualifies as a homestead—a property owner’s primary home and the land on which it sits.18 Montana’s homestead rules protect a homestead from creditors and give a non-owner spouse rights in a homestead owned solely by the other spouse. A deed that transfers ownership of a married person’s Montana homestead must have both spouses’ signatures—even if only one spouse holds title.19
Spousal Intestate Share
A deceased property owner’s surviving spouse has priority rights in the deceased owner’s estate. A surviving spouse’s inheritance rights if a deceased spouse is intestate—or has no will—are as follows:
- No surviving children or parents. The surviving spouse receives 100 percent of the estate if the deceased spouse leaves neither surviving children nor parents.
- Surviving children are surviving spouse’s children. The surviving spouse receives 100 percent of the estate if all of the deceased spouse’s living children are also the surviving spouse’s children.
- Surviving parent(s) and no surviving children. The surviving spouse’s share is $300,000.00, plus three-fourths of the remainder, if the deceased spouse has a surviving parent and no surviving children.
- Surviving children and surviving spouse has other children. The surviving spouse’s share is $225,000.00, plus one-half of the remainder, if the deceased spouse has children who are also the surviving spouse’s children and the surviving spouse has other children.
- Surviving children not surviving spouse’s children. The surviving spouse’s share is $150,000.00, plus one-half of the remainder, if the deceased spouse has one or more surviving children who are not the surviving spouse’s children.20
Spousal Elective Share
Montana gives a surviving spouse the right to an elective share in the estate of a deceased spouse who leaves a will.21 The surviving spouse may choose to receive the elective share instead of the share provided under the will. A spouse can waive the elective share through a prenuptial agreement.
A surviving spouse’s elective share in Montana is one-half of the marital property in the estate.22 Marital property consists of between 3 and 100 percent of the deceased spouse’s probate estate—adjusted to include certain non-probate assets.23 A surviving spouse’s percentage depends on how long the couple was married before the deceased spouse’s death.
Montana is not a “community property” state. The Montana Legislature abolished the common law rights of dower and curtesy.24
Where Are Deeds Filed in Montana?
The county clerk and recorder’s office for each Montana county is responsible for maintaining the county’s land records.25 The new owner or other person who wishes to record a Montana deed submits the original deed to the county clerk and recorder’s office for the county where the property is located.26
A recorded deed serves as constructive notice of the transfer to later purchasers and creditors.27
Does Montana Allow Electronic Recording?
Montana allows electronic recording of deeds in counties that have adopted an electronic recording procedure.28 Not all counties offer electronic recording. Counties that accept deeds electronically provide the service through third-party vendors—which may charge an additional fee. Some Montana counties make land records available for review online.
What Is the Cost to File a Montana Deed?
The fee for recording a Montana deed is $8.00 per page.29 A clerk who accepts for recording a deed that does not comply with Montana’s formatting requirements can charge an additional fee of $10.00.30
Does Montana Charge a Transfer Tax for Real Estate Transfers?
Montana does not charge a transfer tax or deed tax for transfers of real estate ownership.
Does Montana Require Any Additional Forms When Recording a Deed?
Montana deeds require a transfer certificate, and some deeds also require a form detailing the transfer of any water rights.
Realty Transfer Certificate
All Montana deeds filed for recording must include a realty transfer certificate (Form RTC)—a form the Department of Revenue publishes.31 Montana uses Form RTC to obtain sale price data for consistent property tax assessments.32
Form RTC provides details about the transfer—including the consideration provided for the property (usually the sale price). Montana exempts certain deeds from disclosing the sale price. The completed form filed with an exempt deed must identify the applicable exemption.
The person who completes Form RTC must sign the document, and the seller and buyer must both review the completed form for accuracy.
Note: A realty transfer certificate need not be filed when recording a Montana transfer-on-death (TOD) deed. The beneficiary completes and submits Form RTC—along with a copy of the recorded TOD deed and the owner’s death certificate—when the owner dies.
Deeds Exempt from Sale Price Disclosure
Montana requires Form RTC with all deeds that transfer title to real estate. However, a sale-price disclosure within Form RTC is not required for transfers of agricultural land and for several categories of deeds “that are not arm’s-length transactions.”33
Montana exempts the following 14 categories of deeds from Form RTC’s sale-price disclosure:
- Deeds recorded prior to July 1, 1975;
- Deeds relating to the sale of agricultural land when the land is used for agricultural purposes;
- Deeds transferring timberland when the land is used for producing timber;
- Deeds from the United States, the State of Montana, or any agency thereof;
- Deeds confirming, correcting, modifying, or supplementing a previous deed with no further consideration;
- Deeds under a court decree;
- Deeds pursuant to a merger, consolidation, or reorganization of one or more business entities;
- Deeds transferring real estate from a subsidiary to its parent corporation with no consideration or in sole consideration of the cancellation or surrender of the subsidiary’s stock;
- Deeds from a deceased person’s estate;
- Deeds transferring real estate as a gift;
- Deeds between husband and wife or parent and child for only nominal consideration;
- Deeds that have the effect of transferring real estate to the same party or parties;
- Deeds relating to sale for delinquent taxes or assessments, a sheriff’s sale, or a sale pursuant to a bankruptcy court order; and
- Deeds made in contemplation of death.34
Certification of Water Rights Ownership Update
Montana’s Form RTC includes a water rights disclosure listing the status of water rights related to the property. The seller must state whether the property has public water access and whether water rights are attached to the property. If water rights are associated with the property, the disclosure states whether the seller is transferring the rights to the buyer or reserving or dividing the rights.
A seller reserving or dividing the property’s water rights must complete and file with the clerk a Montana Department of Natural Resources Form 640 with updated information about the property’s water rights.35 Form 640 is included with Form RTC and is available as part of the same document.
- Mont. Code § 70-1-519.
- See Mont. Code § 30-11-109.
- Mont. Code § 70-20-304.
- Mont. Code § 70-20-304.
- Mont. Code § 72-6-404.
- Mont. Code § 72-6-408.
- Mont. Code § 72-6-411.
- See Mont. Code § 70-15-202(2).
- Mont. Code § 70-1-315(1).
- Mont. Code § 70-20-313.
- Mont. Code § 70-1-306.
- Mont. Code § 70-1-313.
- Mont. Code § 70-1-314.
- Mont. Code § 70-20-310.
- Mont. Code § 70-20-105.
- Mont. Code § 70-1-312.
- Mont. Code § 70-21-307.
- Mont. Code § 70-32-101.
- Mont. Code § 70-32-301.
- Mont. Code § 72-2-112.
- Mont. Code § 72-2-232.
- Mont. Code § 72-2-232(1).
- Mont. Code §§ 72-2-233(1) and (2).
- Mont. Code § 72-2-122.
- Mont. Code § 7-4-2611.
- Mont. Code §§ 7-4-2613(1)(a); 70-21-208.
- Mont. Code § 70-21-302.
- Mont. Code §§ 30-18-101, et seq.
- Mont. Code § 7-4-2637(1).
- Mont. Code § 7-4-2637(2).
- Mont. Code § 15-7-305(1).
- Mont. Code § 15-7-302.
- Mont. Admin. R. 42.20.203.
- Mont. Code § 15-7-307.
- Mont. Code § 85-2-424(6).