Can a widow get out of her mortgage obligation if there’s a large IRS lien on the property in her deceased husband’s name?

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Can a widow get out of her mortgage obligation if there’s a large IRS lien on the property in her deceased husband’s name?

My father-in-law recently passed. He hadn’t filed his taxes in 10 years so the IRS was pursuing both MIL and FIL. I decided (I’m a CPA) to file all past due taxes as Married Filing Separately. My MIL paid the delinquent taxes and is clear with the IRS. My FIL owed $150k so the IRS slapped a lien on their home. Now my MIL wants to retire and move. The house is worth $130k with a $80k mortgage in both of their names. We know that my MIL won’t get a cent out of sale. She lives in a recourse state. There are no other assets in my FIL’s estate. Can she get out of mortgage obligation with sale? Will the IRS lien follow her?

Asked on April 6, 2012 under Real Estate Law, Georgia

Answers:

Daniel Bowen / Daniel D. Bowen, Attorney at Law

Answered 10 years ago | Contributor

If I understand your question, it demonstrates why all things being equal a married couple should own property with a right of survivorship.  If MIL and FIL owned the property jointly she has a 50% interest not subject to the lien.  The estate and MIL should sell the house and MIL should receive 1/2 of the equity less expenses.


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