Montana Estate Planning for Blended Families: The $150,000 Trap

If you're remarried with children from a prior relationship, Montana's default inheritance rules are almost certainly not what you want. Under MCA 72-2-112(4), if you die without a will and have children who are not also your current spouse's children, your spouse receives only the first $150,000 of your estate plus 50% of the remainder. Your children from the prior relationship inherit the other 50%.

On paper, that might sound fair. In practice, it creates a situation where your surviving spouse and your children become co-owners of the family home, the bank accounts, and every other asset — forced into a legal relationship that frequently destroys families.

How the Default Rules Create Conflict

Consider a common scenario: You own a home worth $400,000, have $100,000 in savings, and are married with two children from your first marriage.

Under Montana intestacy, your spouse receives $150,000 plus 50% of the remaining $350,000 = $325,000 total. Your two children split $175,000 between them. But the home is a single, indivisible asset. Unless there's enough cash to buy out the children's share, someone has to either sell the house or negotiate a partition agreement.

Your children are now in the position of either forcing the sale of their stepparent's home or accepting below-market compensation to be bought out. Your spouse is in the position of negotiating asset division with stepchildren who may or may not be cooperative. The estate attorney fees for this mediation alone can exceed the cost of the planning that would have prevented it.

The Joint Tenancy Mistake

Many blended family couples try to solve this problem by titling their home in joint tenancy with right of survivorship. When one spouse dies, the home passes automatically to the survivor — bypassing probate and intestacy entirely.

The problem comes on the second death. Once your spouse owns the home outright, they can leave it to anyone: their own children, a new partner, a charity. Your biological children have zero legal claim. Joint tenancy between spouses in a blended family is essentially a bet on who dies first — and the first to die loses all control over where their share ultimately ends up.

MSU Extension specifically warns against this pattern for Montana blended families, noting that joint tenancy "can completely disinherit the children of the first spouse to die."

Planning Strategies That Actually Work

A will with specific provisions. At minimum, a Montana will lets you specify exactly what each person receives. You can leave the family home to your spouse with a provision that it passes to your children upon the spouse's death (a life estate). You can designate specific accounts or amounts for your children and the remainder for your spouse. The will overrides intestacy and gives you control.

TOD deeds with beneficiary layering. A Transfer on Death deed on your home can name your spouse as primary beneficiary and your children as contingent beneficiaries. This keeps the home out of probate while building in a succession plan. But note: once the property transfers to your spouse, they become the sole owner and would need their own TOD deed to pass it to your children. This requires trust and coordination.

Separate beneficiary designations. Life insurance, retirement accounts, and bank accounts with POD designations pass outside both probate and your will. Use these to direct specific assets to specific people: retirement accounts to your spouse for living expenses, a life insurance policy to your children to ensure their inheritance.

Trusts for complex situations. If your estate is large enough that the $150,000 threshold creates serious problems, or if you want enforceable guarantees that your children inherit after your spouse's lifetime, a trust provides the strongest legal protection. A QTIP trust (Qualified Terminable Interest Property) provides income to the surviving spouse during their lifetime while preserving the principal for children from the first marriage.

The Elective Share Complication

Montana's elective share statute (MCA 72-2-221) adds another layer. Even if your will leaves your spouse less than the intestacy amount, your spouse can elect to take their statutory share based on the length of your marriage. For marriages of 15 years or more, the elective share reaches 50% of the combined augmented estate.

This means you cannot simply write your spouse out of your will to protect your children's inheritance. Any blended family plan must account for the elective share — it sets a floor on what your spouse is legally entitled to, regardless of what your documents say.

Steps to Take Now

1. Have the conversation. Discuss inheritance expectations with your spouse openly. Many blended family estate disputes arise because assumptions were never stated.

2. Inventory every asset and its title. Identify which assets are jointly titled, which are solely owned, and which have beneficiary designations. Each category follows different rules at death.

3. Create a will. Even a basic will dramatically improves on intestacy for blended families. Name your beneficiaries, specify amounts or percentages, and nominate a personal representative who can navigate the family dynamics.

4. Coordinate beneficiary designations. Make sure your retirement accounts, life insurance, and bank accounts align with your will. Beneficiary designations override wills — an outdated designation from your first marriage can undo your entire plan.

The Montana Basic Estate Planning Kit walks blended families through this exact process, with an asset inventory worksheet that maps each asset to the right transfer method and identifies where default rules create unintended consequences.

See more Montana guides →