Montana Estate Taxes

Montana's estate tax is a "pick-up" tax equal to the state death tax credit under federal estate tax law. Since this credit has been repealed for the period from 2005 through 2010, there are currently no estate taxes imposed by the state. Montana once had a layered inheritance tax system that worked in conjunction with the estate tax, but it was eliminated beginning in 2001.

Deductions. The following items can be deducted from a decedent's estate when calculating Montana estate tax liability:

• decedent's debts
• funeral expenses
• medical expenses of last illness
• administration expenses, including commissions and fees of executors, administrators, and attorneys actually allowed and paid
• attorneys' fees, filing fees, and other expenses and costs incurred in proceedings to terminate joint tenancies, life estates, and transfers in contemplation of death, and in proceedings instituted for the determination of inheritance tax
• federal, state, and local taxes (including all penalties and interest) unpaid prior to death
• federal estate taxes
• estate taxes paid to other states
• unpaid mortgages

Returns. Within three months of the executor's or administrator's appointment, an inventory and appraisement of the estate must be filed with the District Court in each county having jurisdiction of the estate. A two-month filing extension is available, provided there is good cause.

The District Court determines any taxes owed and mails a notice of assessment to the County Treasurer, the administrator or executor, and the State Department of Revenue. Any Montana estate taxes owed must be paid to the State Department of Revenue within 18 months after the decedent's death, otherwise they are considered delinquent.

Generation-skipping transfer tax. Montana imposes a generation-skipping transfer tax equal to the federal credit.