Estate and Inheritance Taxes
An estate tax is a tax on the gross value of an estate transferred at death. It consists of an accounting of everything the decedent owns or has certain interests in at the date of death.
At the federal level, a filing (Form 706) is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004-2005; $2,000,000 in 2006-2008; and $3,500,000 in 2009 and $5,000,000 in 2011-2012. There was no federal estate tax required in 2010.
Montana’s estate tax is equal to the maximum credit allowed against the federal estate tax described above. The Economic Growth and Tax Reconciliation Act (EGTRRA) of 2001 provided a temporary phase out of the credit that started in 2002 and eliminated the credit for deaths occurring in 2005 through 2010. The Tax Relief, Unemployment Reauthorization, and Job Creation Act of 2010 extended the full phase out of the state death tax credit through 2011 and 2012. Therefore, there is no Montana estate tax due for deaths occurring after December 31, 2004.
Filing is required in Montana only if the following conditions exist:
- The estate met the federal estate tax filing requirement,
- The decedent passed away prior to January 1, 2005, and
- The decedent owned property in Montana at the time of death.
Note: Probate proceedings that require the filing of a Montana estate tax return also require a certificate stating that any Montana estate tax due on the assets of the estate has been paid or that no tax is payable. If a certificate is required, it must be filed with the clerk of district court before final distribution to successors may be made and petitions may be granted. To request a certificate, please use the Application for Determination of Estate Tax (Form INH-4).
For more information on estate planning, please see Montana State University Extension Services' list of publications under Estate Planning: 24 Topics You Must Know About.
Montana's inheritance tax was repealed by the passage of I-115 in November 2000. As a result, the inheritance tax will not apply to bequests made on or after January 1, 2001. Therefore, a certificate from the Department of Revenue stating that all inheritance taxes were paid is not necessary. Additionally, consent to transfer stocks, bonds or insurance proceeds (also referred to as an "inheritance tax waiver") is only required for deaths occurring before January 1, 2001.
For questions regarding the inheritance tax prior to its repeal, call us toll free at 1-866-859-2254 (in Helena, 444-6900).
If you have additional questions regarding estate and/or inheritance taxes, please see our Estate and Inheritance Tax FAQs.
Last updated 1/5/2012 3:01:44 PM