The state of Montana has a wonderful Homestead Exemption Act that is designed to protect the investment you have made in your home. Here are the details.
What Is It?
A homestead declaration is a legal document that you can sign to protect up to $250,000 in value of your home. This declaration helps protect your home against most creditors’ claims in times of financial stress.
What Qualifies As A Homestead?
A homestead is the residence in which you live and the land that it sits on.
To qualify for a homestead declaration, the property must be your main residence whether it is a mobile home or a manufactured home, even if you do not own the land your home sits on.
Who Does The Declaration Protect?
In addition to the homeowner, spouses may legally acquire an interest in a property under Montana law upon marriage. However, this may not apply if there is a signed premarital agreement that states otherwise. A spouse does not have to be listed on the deed or contribute to the property financially to sign the homestead declaration. Marriage alone qualifies a spouse to have a “legal interest” in the property. Both spouses must sign the homestead declaration; otherwise the spouse who fails to sign will not be exempt to have interest in the property.
Under the homestead declaration, death of a married homeowner entitles their living spouse to a homestead allowance of $20,000.
How Can You Obtain A Homestead Declaration?
Call your county clerk, country recorder, or download a free Montana homestead declaration online at http://www.courts.mt.gov/library/topic/end_life.mcpx. You then need to get it notarized and pay up to $11 to file it. If you have any questions whether the form you are downloading is a true legal document, reach out to your country clerk, country recorder or an attorney for verification. Checking for authenticity is extremely important to make sure your signed document is binding.
When Does the Homestead Declaration NOT Provide Protection From Creditors?
There are some instances where and individual unfortunately will not be protected under the homestead declaration such as if you use your property as collateral on a loan or if you do not pay your property taxes. To learn more about why you may not be protected from creditors under the homestead declaration, go to http://msuextension.org/publications/FamilyFinancialManagement/MT199815HR.pdf.
Can a Homestead Declaration be Undone?
Yes. A homestead declaration can be undone by a declaration of abandonment. If married, you and your spouse must acknowledge the abandonment and it must be filed in the clerk and recorder’s office in the county where the declaration was originally recorded.
Why is it important to file a Homestead Declaration?
Life is unpredictable. You never know when you’re going to need to protect your equity. Whether life throws something unexpected at you that may lead to severe debt or a spousal death devastates your finances, this declaration may be your saving grace. It’s important to do this now, BEFORE you’re faced with a devastating event. With this declaration, nobody can take your home away from you because you fell behind on your bills. It’s easy to obtain, yet extremely worth it.