QUESTION
Will the IRS take the home left to my brother in a will? How?
Asked on Sep 09th, 2015 on Estate Planning - New York
More details to this question:
I am writing on behalf of my mother-in-law. She is 85 and wants to leave her home to her son. Who doesn't have much at all and the other brother (my hubby) is absolutely fine with that decision. A simple will should take care of this but now she tells me that my brother-in-law owes 30k to the IRS. Is it wise for her to still put the house in his name? Won't the IRS take the house?
12 ANSWERS
Corporate/Business Attorney serving Beachwood, OH
at
Christine Sabio Socrates Attorney at Law
Update Your Profile
If her son has an IRS debt, they can go after the home if it put in his name. I would recommend putting the home in a trust that will protect the home until he is ready to take ownership after the mother's death. This should be done while she is living.
Answered on Sep 16th, 2015 at 1:31 PM
Once he inherits the home when she dies, sure the IRS will go after any assets he has that they find out about. Why wouldn't they? It might be better for her to put the property into a trust so he has no ownership interest but can live there rent free or at a reduced rent. ?She needs to speak to a local attorney who handles trusts and estates to find out what the best solution is. If your husband is fine with his brother getting all the assets, he should definitely avoid getting involved with the matter as in estates no good deed goes unpunished. Don't volunteer to be the unpaid trustee, as it will just cause friction between the brothers.
Answered on Sep 10th, 2015 at 5:22 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
at
Ronald K. Nims
Update Your Profile
Yes, the IRS will take the house. The most obvious way around this is to put the house in a trust, so your brother can live there but not own it.
Answered on Sep 10th, 2015 at 5:21 AM
Edwin K. Niles
It is always better to inherit than receive as a gift, because the recipient gets a stepped-up capital gains basis. You don't say why the money is owed, so I can't really answer that question. Mom should have a conference with an estate lawyer.
Answered on Sep 09th, 2015 at 10:41 PM
The IRS may take the house or put a lien on it for back taxes. Perhaps the better question is can your brother-in-law afford the expenses of owning a house if he's so deeply in debt? If she's adamant about him having the house, perhaps she should put it in a trust with him as the beneficiary.
Answered on Sep 09th, 2015 at 9:40 PM
Trusts Attorney serving Sacramento, CA
at
Law Office of Victor Waid
Update Your Profile
Not wise to home in brother's name. Check with a probate estate planning attorney and your accountant for tax implications.
Answered on Sep 09th, 2015 at 9:35 PM
Commercial Attorney serving Chicago, IL
at
Ashcraft & Ashcraft, Ltd.
Update Your Profile
The IRS has the ability to attach their tax lien to any property owned by the tax debtor. This means the IRS could execute the lien against the property and force a sale with the proceeds applied to pay off the tax lien. Even if the IRS did not force a sale the lien would have to be paid if the property were sold in a private sale and the lien paid off before the net proceeds are received by the owner.
Answered on Sep 09th, 2015 at 9:26 PM
3 Awards
She should speak with an estate planning attorney. She probably needs a trust as part of her estate plan.
Answered on Sep 09th, 2015 at 3:16 PM
Appellate Attorney serving Grosse Pointe Farms, MI
at
Musilli Brennan Associates, PLLC
Update Your Profile
With just a simple will and a direct deed the IRS would indeed consider the inherited home his asset and subject to potential collection action. There are ways to protect such a gifting, and therefore would be very wise for your mother-in-law to see an attorney and perhaps avoid probate altogether.
Answered on Sep 09th, 2015 at 3:16 PM
Probate Attorney serving St. Louis, MO
at
Edward L. Armstrong, P.C.
Update Your Profile
If the son to whom she wishes to leave property owes the IRS $30,000, in all probability they will assess a lien against the property and ultimately take it, sell it and apply the proceeds against the tax owed.
Answered on Sep 09th, 2015 at 3:15 PM
Probate Attorney serving New Orleans, LA
at
James G. Maguire
Update Your Profile
If the IRS has a lien against your brother-in-law, the lien could end up being against any property he owns, including anything your mother-in-law would leave to him in a will.
Answered on Sep 09th, 2015 at 2:53 PM
Estate Planning Attorney serving New York, NY
at
Kleinberg, Kaplan, Wolff & Cohen, P.C.
Update Your Profile
A complicated Will leaving it to him in a trust for his benefit will better protect the house against the IRS (and any other creditors he may have).
Answered on Sep 09th, 2015 at 2:38 PM