Montana, like many states, has adopted a homestead system so homeowners can protect their primary residence from creditors. The maximum homestead exemption is $250,000. It applies to the home and other improvements, the land on which the home sits, mobile homes, condos and townhouses. Filing for homestead is a simple process, requiring the preparation of a homestead document.
Create a Homestead Document
Montana does not prescribe a particular form or format that must be used to claim the homestead protection, but many counties have created sample forms to follow. Check with your local county clerk to make sure the document you create is substantially similar to the suggested form. The declaration should include a description of the property, the names of the property owners, a statement that the home is the primary residence and a statement that the property qualifies for the homestead protection pursuant to Montana Code Annotated, section 70-32-201.
Sign the Document Before a Notary
All owners of the property must sign the homestead declaration. It would be an unusual scenario in which a jointly owned property outside of a marriage would be a primary residence. However, whether jointly owned as spouses or as any other scenario of adults living together, such as a same-sex couple, the property must be the primary residence of all owners and signed by all owners. The form should be dated because the protection may depend on the date of filing. For example, homestead declaration is not effective against bankruptcy unless it was filed before the bankruptcy was filed. The declaration should be signed in the presence of a notary who will notarize the document.
Record the Declaration of Homestead
File the declaration of Montana homestead with the county clerk and recorder's office in the county in which the property sits. You'll have to pay a small filing fee. The homestead protection does not exist until the form is filed, putting creditors and the public on notice of the property's status as a homestead. If circumstances arise such that the homestead claim is no longer valid, for example divorce, the homeowners can file a declaration of abandonment to undo the homestead protection.
Limits on the Dollar Value
Previously, the homestead protection was limited to $100,000. If documentation was properly filed to secure the $100,000 protection, a homeowner need not refile to increase the protection to $250,000. There are, however, a few scenarios in which homestead protection does not apply. For example, if someone files a mechanic's lien for work done on the property, or the state files a lien for medical fee under the Medicaid Estate and Recovery Program, then the declaration may not protect the $250,000 in value of your Montana homestead.
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- Property law and creditor/debtor law can be complicated, despite how straightforward the homestead declaration seems. This article should only be used for educational purposes and should not be construed as legal advice. Homeowners should consult an attorney licensed in Montana for further information and advice.
Joshua Jones began writing in 2003. He has published serial fiction on ezines, penned scholarly legal articles, and contributed online to the School Shootings Anthology. Jones holds a Bachelor of Music Education, University of Montevallo, a Master of Education Law and Juris Doctor from the University of New Hampshire School of Law, and a master's degree from McGeorge School of Law.