What To Expect When You Inherit Your Parent’s Home in Montana
As a real estate agent, I get an up front and personal look into people’s lives throughout all different phases.
From newly married couples buying their first home together, those who are upsizing to make room for their first (or second… or third…) baby, those who are downsizing as empty nesters, and even some of life’s more emotional moments, like those going through a divorce or losing a loved one.
I always say that home ownership is so much more than just buying a home as a place to live – it’s a deeply personal and sometimes emotional decision, which means that my job as a real estate agent is so much more than just a transaction!
While I’ll of course always answer your typical real estate questions and be there to guide you throughout the sometimes confusing process, my hope as an agent is to be SO much more than that!
I believe that a real estate relationship should go far beyond the closing table so that you feel confident in your decision to buy or sell even after it’s already done.
Recently, we worked with a client who had went through one of the more emotional scenarios I described above and throughout the entire process of selling the property they inherited from their parents, I couldn’t help but think about how we needed a resource for this.
Because well… this is real life. As much as we don’t want to think about our loved ones not being here with us, it’s incredibly smart to prepare and have the knowledge about what to do when that day comes.
So, this blog post is here to help you do just that! If you’re a child that’s inherited your parent's home or property (OR if you’re a parent and you want to set your child up well for when that day comes), below we’re covering:
what actually happens when you inherit a home in Montana
what it takes to sell it
what parents can do right now to make this whole process easier on their kids someday
How To Sell Inherited Homes and Property in Montana
Selling a home you've inherited really comes down to two separate things: the tax side and the legal side. They tend to get tangled together in people's minds, but they’re really two parts of the puzzle… and just to be transparent with you, one piece of the puzzle is a lot easier to manage than the other. 😅
Let's start with taxes, since that's usually the first worry! The good news is this: you generally don't owe taxes just for inheriting a house. (Everyone says hallelujah!)
What happens instead is the IRS resets the property's "cost basis" to what it's worth on the date your parent passed away, not what they originally paid for it decades ago.
So for example, if your parents bought their house in 1985 for $60,000 and it's worth $340,000 today, that appreciation isn't taxed to you. You'd only owe capital gains tax on any value the home gains between the date of death and the date you sell it – and since most families sell within months, that number is often small or nonexistent.
That’s the tax side… now for the legal side, which takes a little more patience!
Montana Probate Process Timeline
Most inherited homes in Montana have to go through probate before they can be sold. And if you’ve heard that word before but have literally no idea what it means, probate is simply the court process that validates the will (or figures things out if there wasn't one) and officially transfers ownership to the heirs.
In Montana, this typically takes anywhere from six months to a year, depending on the county, how complicated the estate is, and whether everyone in the family agrees on what to do.
When I said you have to be patient… I meant it 🤣
There’s a few things that can affect the probate process timeline, including:
Estate Size – smaller, simpler estates can sometimes skip the lengthy formal process and move through a faster, simplified route.
Executor – a personal representative called an executor has to be officially appointed by the court before they have the legal authority to sign for a sale. If your parents did not assign an executor of their estate/will before they passed, this could delay the process and it’s often one of the biggest hold-up families don't see coming.
Disputes – these will slow down everythingggg! If heirs disagree or if paperwork is missing, expect the process to stretch longer.
The best thing you can do here is to start the probate process as early as possible because the clock doesn't start until someone files!
Documents Required for Selling Inherited Property
Once probate is underway (or done, depending on your situation), here's what you'll typically need pulled together before you can actually list the inherited home for sale:
Certified copy of the death certificate
The will (if there is one)
Letters testamentary or letters of administration – this is the court's proof that the personal representative has authority to act on the estate's behalf
A copy of the deed to confirm current ownership
Property tax records
A recent appraisal or valuation to establish fair market value (this also matters for your taxes, so don't skip it)
Documentation of any outstanding debts, liens, or mortgages tied to the home
If your parents used a trust or a transfer-on-death deed, some of this gets simpler, as those tools are specifically designed to skip probate entirely!
What To Do When Selling Inherited Property with Multiple Owners
Now for a tricky yet very common scenario! Oftentimes parents will divide their home or property amongst all of their children and in theory, it’s great. But when it comes time for all of those kids to decide what to do with the home, it can get very emotionally charged, especially if someone disagrees.
If you’re selling an inherited property with multiple owners, it’s important to know that EVERYONE typically has to agree before the property can be sold. That sounds simple until one sibling wants to sell right away, another wants to keep the house, and a third just wants to avoid the conversation altogether.
Here’s a few things that can genuinely help when this happens:
Name one point of contact – even if all siblings are equal heirs, having one person coordinate with a real estate agent, attorney, and each other cuts down on chaos.
Get an independent valuation early – a neutral, professional number takes a lot of the emotion out of "what's it worth" conversations.
Talk about the "why" behind each person's preference – sometimes what looks like stubbornness is really grief, or guilt, or a memory attached to the house that hasn't been said out loud yet and it’s all worth being talked about!
Loop in a mediator or estate attorney if things stall – choosing to work with an estate attorney is one of the BEST things you can do to protect the family relationships that matter more than a sale price.
If you're in the middle of this right now, I want to talk right now as a friend, rather than your potential real estate agent…
Pause. Take a breath. Allow yourself (and your siblings) to grieve. Don’t rush the process.
This is truly one of, if not THE most, emotionally loaded real estate situations there is and it's okay if it takes longer to navigate than you expected!
Resource For Parents: Estate Planning Documents Checklist
If you're a parent reading this and thinking "I never want my kids to go through this blind," we’ve got you covered too! And for what it’s worth, none of this requires a lawyer's office visit tomorrow – just a little organization now that saves your family months of stress later.
Print this out! Fill it in! Tells your kids where it lives!
✔️ Will is written, signed, and stored somewhere the family knows about
✔️ Deed to the home is current and accurately reflects ownership
✔️ Consider a transfer-on-death (TOD) deed to let the house bypass probate entirely
✔️ Consider a living trust for more complex estates or blended families
✔️ List of financial accounts, insurance policies, and how to access them
✔️ Digital password list or password manager access shared with a trusted person
✔️ One person named as executor or point of contact (and they know it)
✔️ Rough idea of the home's current value (a free market analysis from a local agent works fine)
✔️ Conversation had with kids about what you'd want done with the house (sell, keep, rent, etc)
✔️ Obvious repairs, clutter, or big cleanout projects tackled now (while you're able to)
✔️ Copy of this checklist given to whoever you've named as executor
This estate planning checklist doesn’t have to happen in a single weekend, but simply knocking out two or three of these this year puts your family miles ahead of where most families start!
FAQs for Kids Selling Inherited Homes and Property in Montana
And now for some of the most common questions that kids ask (and Google!) about selling inherited homes or property in Montana:
Will I have to pay capital gains tax on inherited property in Montana?
Taxes are one of those things that people start to worry about the most when they inherit a home or property from their parents. The good news is that you’ll probably have to pay very little (if anything) for capital gains tax.
Thanks to what's called a "stepped-up basis," your tax basis in the home resets to its fair market value on the date your parent passed away, not what they originally paid. That means decades of appreciation during your parent's lifetime typically isn't taxed to you.
You'd only owe capital gains on value the home gains between the date of death and the sale date, which is often small since most inherited homes sell within a matter of months.
Is there a time limit on selling inherited property in Montana?
There’s not exactly a hard deadline for selling an inherited property, but there is a practical one – you generally can't close on the sale until probate has granted someone legal authority to sign for the estate, which usually takes six months to a year in Montana.
There's no rush to sell the moment that authority is granted either, so plenty of families take time to sort through belongings and make decisions first.
What documents are required for selling inherited property?
At minimum, expect to need a certified death certificate, the will (if one exists), court-issued letters testamentary or letters of administration, the property deed, tax records, and a current appraisal. If your parents used a trust or TOD deed, the list gets shorter!
Should I renovate inherited property before selling for tax purposes?
Renovating an inherited property before selling for tax purposes is not usually necessary. Your stepped-up basis (that was mentioned above) already accounts for the home's current value, so renovations don't erase taxable gains the way people sometimes assume.
That said, small updates can still help with resale value and buyer interest! This is exactly the kind of question worth asking a local agent before spending a dime, since the right answer depends on the home's condition and your local market.
Can I get a home equity loan on an inherited property?
Generally, yes, but only once the property is officially transferred into your name (or the estate has legal standing to act), and lenders will look at things like the mortgage payoff status and whether other heirs share ownership. If the house is jointly inherited, this gets more complicated, since lenders typically want all owners on board.
Selling an Inherited Home or Property in Montana?
Whether you're navigating this right now or planning ahead so your own kids never have to Google "what happens when you inherit a house," you don't have to figure it out alone.
We've walked Billings families through this exact process and we’d love to help you do the same! When the time comes, CLICK HERE to reach out to talk through your options for selling an inherited home or property in Montana.