How will an existing tax lien affect my upcoming inheritance?

If you have existing federal tax liens against you and are expecting an inheritance from a family member, the tax lien may have an effect on your inheritance.  Depending on the amount you inherit, you may need to pay an inheritance tax on the amount of money or property that you received from the individual who willed it to you.  This can affect you at the state level as well as the federal level.  If you owe money to the taxing authority and they have placed a lien against you, they will be able to come after you legally for the amount of the lien, and can possibly even withhold the money coming to you until they have removed what they are owed along with the inheritance tax amount that is due.

The best solution to solve this problem is to offer to pay off your tax lien with your inheritance.  If the lien is on a piece of property that is being willed to you, you will most likely need to satisfy the lien before you will be allowed to take possession of the property, so you may need to take out a loan or come up with the cash in order to receive the transfer of the property to you.

If you have concerns about this or any other aspect of inheriting money or dealing with a tax lien, it is in your best interests to consult with an experienced tax attorney before the inheritance is willed to you or received.