October 29th, 2022 in
My father passed away and owes taxes. Will his children be required to pay his taxes? The estate of a loved one can be difficult to navigate. This is especially true if your father owed taxes to the Internal Revenue Service. It is not uncommon for the beneficiaries of his estate to feel conflicted. On one hand they want to receive their inheritance. On the other hand they want to do things properly. The conflict becomes real when the beneficiaries realize that if the taxes are paid, they will not receive anything.
Your father’s beneficiaries are only entitled to what is left in his estate after the bills and expenses of his estate are paid. No one is “entitled” to inherit from their parent. The good news is your father’s creditors, including the Internal Revenue Service, are limited to the assets of his estate. This means that if the taxes are worth more than his estate, the IRS can only look to his estate and the taxes do not need to be paid in full.
This assumes the beneficiaries do not distribute the funds to themselves improperly. If that occurs, the IRS can make the person who wrongfully received the funds responsible for the taxes.
The probate code has a list of priority of creditors for an estate as listed in California Probate Code Section 11420. The person in charge of his estate needs to ensure the creditors are paid in the proper order. This is especially important if the estate is insolvent. Contact our te