Legal Blog

The Weekly Scenario from Steve Shane – 9.16.13

Question:  I am a beneficiary of my mother’s estate.  My brother is the Personal Representative.  How do I know my brother paid all taxes due and that the IRS will not be coming after me once I receive my inheritance? Answer:  There is certainly cause for awareness (if not concern) as a beneficiary of an estate.  If the Personal Representative does not settle all taxes that the estate owes, the IRS will place a personal lien against the beneficiary who receives property from the estate.  The beneficiary will be liable for the tax whether or not the beneficiary has any knowledge of the tax deficiency. How long does this lien stay in effect?  The tax lien is enforceable by the IRS for about 10 years from the date of the decedent’s death.  This timetable may be a longer time, for example, if the estate is granted any extensions of time for payment.  The IRS may collect the entire tax from the beneficiary up to the full amount of the inheritance, whether or not the beneficiary received the entire amount. Comment:  The role of a Personal Representative is not something that should be taken lightly.  Depending on the size of the estate, family dynamics and other complexities, many PRs decide to hire legal counsel to represent the interest of the estate (and protect the Personal Representative from liability).  At times, beneficiaries also hire their own counsel when the issues are complex enough to warrant it. Steven E. Shane Principal Offit│Kurman Attorneys At Law 301.575.0313 Washington 443.738.1513 Baltimore 410.218.9339 Mobile 301.575.0335 Facsimile Please note the above material discussed is intended to provide only general information. Do not, under any circumstances, solely rely on this information as legal advice. Legal matters are often complicated. For assistance with your specific legal problem or inquiry please contact me directly.