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Montana Property Division
Property Distribution Laws in Montana

In Montana, the courts generally accept a fair and reasonable property division the parties agree to, but if the parties cannot agree, the property is divided by the District Court within the Judgment of Divorce. The court encourages spouses to come to an agreement on their own regarding marital property.

Montana requires an equitable division of property, and all property is subject to distribution. While equitable implies fair, it does not necessarily mean equal. If the court must intervene, it takes several factors into account. Considerations include, but are not limited to, alimony, earning capacity of both spouses, length of the marriage, contributions of the homemaker, if applicable, and custody arrangements, debts and age.

Factors in Equitable Distribution

In Montana, the property and debt issues are typically settled between the parties by a signed Marital Settlement Agreement or the property award of the Circuit Court as part of the Decree of Dissolution of Marriage.

According to Montana Code - Section 40 - Titles: 4-202, the court, in dividing property, considers:

  • duration of the marriage and prior marriage of either party;
  • the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, and needs of each of the parties; custodial provisions; whether the apportionment is in lieu of or in addition to maintenance; and
  • the opportunity of each for future acquisition of capital assets and income.

The court also considers:

  • the contribution each spouse had to the acquisition of the marital property;
  • the non-monetary contribution of a homemaker;
  • the extent to which such contributions have facilitated the maintenance of this property; and
  • whether or not the property division serves as an alternative to maintenance arrangements.

Marital Property vs. Separate Property

According to Montana Statutes - Title 30 - Chapter 452 - 330, marital property can be defined as all property acquired by either spouse subsequent to the marriage except:

  • property acquired by gift, bequest, devise, or descent;
  • property acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by gift, bequest, devise, or descent;
  • property acquired by a spouse after a decree of legal separation;
  • property excluded by valid written agreement of the parties; and
  • the increase in value of property acquired prior to the marriage, unless marital assets including labor, have contributed to such increases and then only to the extent of such contributions.

Valuing and Dividing Property

First, the court classifies assets and liabilities, property and debt, as marital or separate. Then it assigns a monetary value to the marital property and debt. Finally, it distributes the marital assets between the two parties in an equitable fashion.

The Marital Home

In Montana, as in many jurisdictions, the equity in the marital home is often one of the biggest assets the spouses divide. The equity is the market value of the house, less any debts or liens against it. Equity is established by determining what the current market value of the home is at the time of separation. Once the spouses agree to a current market value, any debts associated with the property (mortgage, taxes, home equity loans, etc.) are deducted from the market value to arrive at the equity to be divided. Normally, making this calculation requires a paid real estate appraisal or a real estate agent can prepare a market analysis for free.

From there, couples choose one of three options to divide the equity:

  • The spouses sell the home and divide the proceeds.
  • One of the parties may refinance the home and “buy out” the other party.
  • One spouse (usually the custodial parent) remains in the home with the exclusive use and possession for a certain period of time (for example, until the youngest child graduates from high school), then either buys out the other spouse or sells the home and divides the proceeds.

Pensions and Retirement Accounts

In Montana, vested pensions are marital property. A pension vests when all the requirements to receive the pension have been met. Unvested pensions are also marital property. Until the pension has vested, the person under whom the pension is maintained has only an expectancy of interest in the pension.

Several different methods of valuation are used in determining how much a marital asset is worth, depending upon the asset to be valued and the level of agreement between the parties. Courts generally accept the value when the spouses mutually agree on a value of a particular asset. Experts may be retained by the parties or by the courts to determine the value of marital assets if the parties cannot agree. Such experts may include accountants, real estate or business appraisers, or pension valuators. The use of experts adds to the cost of the divorce.

In Montana, the court may include the retirement benefits and plans earned by both spouses as marital assets available for division. Retirement benefits vary greatly but can generally be divided into two groups:

  • Defined Contribution Plans: A defined amount of money belonging to the employee. The employee and/or the employer make defined contributions. The balance of the plan is constantly changing, but its value is definable at any given point. 401(k)’s, 403(b)’s and profit sharing plans fall into this category.
  • Defined Benefit Plans: A retirement benefit where an employer promises to pay a benefit to an employee sometime in the future, based upon some type of formula. Normally, this formula is based on the employee’s salary near the end of his or her career and the number of years he or she worked for the employer before retirement. Defined benefit plans are much more complicated to value and often require the professional evaluation of an actuary to determine exact values.

In Montana, if spouses share in each other’s retirement or pension plan, a Qualified Domestic Relations Order must be completed. A QDRO is a written set of instructions that explains to a plan administrator that two parties are dividing pension benefits. The instructions set forth the terms and conditions of the distribution - how much of the benefits are to be paid to each party, when such benefits can be paid, how such benefits should be paid, etc.

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