In the Estate of Jackson, No. 14-16-00519-CV (Tex. App. – Houston 2017), .
The Facts & Procedural History
The decedent was not married and had no children. She was survived by two nephews and a niece. Six years before her death, the decedent completed a fill-in will that left everything to one of the nephews. Two years later, the decedent deeded her house to the nephew. The nephew had lived with the decedent for 30 years.
Four years after her death, the nephew tried to obtain a loan to pay off the property taxes for the decedent’s house. The mortgage company suggested he probate the will to obtain clear title. The nephew lodged the will with the probate court as a muniment of title. The other two siblings contested the will as being filed late and that there were unpaid debts that would preclude a muniment of title.
The nephew acknowledged that he did not file any Federal income tax returns for the decedent and that he was not aware whether the decedent’s nursing home bills had been paid. He also did not calculate the value of the estate, even though the house was worth around $500,000.
The Houston probate court found that the only debts were those secured by the house. The probate court verified this by eliciting testimony from the nephew. The testimony indicated that no Federal taxes were owed and that the nephew had borrowed $90,000 to pay off the property taxes on the house.
The Houston probate court admitted the will to probate, which generated the appeal.
The opinion for the appeals court doesn’t address it, but a search of the Houston property records shows that the IRS filed a notice of tax lien against the decedent three years prior to her death. The Federal tax lien was not released.
The IRS’s Federal Tax Lien
The Federal tax lien attaches to all property by operation of law once taxes are due and payable. This is usually the time the tax return was or, if not filed, the time it was supposed to be filed.
Unlike other creditors, the IRS generally does not have to file a notice of lien for its lien to take priority.
In this case, it appears that the property was transferred by deed in 2006. The lien notice wasn’t filed until 2013. I didn’t pull the IRS tax lien to see what tax years were involved, but it was likely for years after 2006. So the Federal tax lien may not have attached to the property.
Don't miss out, get a copy today!
