forced sale to meet liens in probate?

What is the name of your state? California

OK, thanks to the helpful answers to my earlier post, learned a bit more about the probate system - figured out the following:

1. the estate is less than 100K, so simplified probate seems applicable.
2. unsecured debts are minimal, negotiable, and heirs would be willing to assume them in simplified proceeding depending on the answer to the following...

3. there is a mobile home (understand that can pass in simplified of via DMV title) on a small, owned lot (this lot is the only asset of any real value in the estate). There are two tax liens on this lot - can these liens pass through with the property in a simplified probate, or must a full probate be undertaken and the property be sold in the probate process to meet the liens?

The heirs are of extremely limited financial means and could file offer in compromise on the taxes supposedly due (they were levied against a disabled senior who took money out of retirement accounts to survive... so may be contestable on that basis?).

So, the question is: whether a lien encumbered property can pass through either a simiplified or regular probate WITH those liens or whether the executor/heirs are forced to settle those liens by a forced sale of the property in a full probate?

Thanks for any guidance and responses!

What kind of tax liens? Federal, or state? Also, please use the same thread to reply.

Federal and state tax liens, state filed a few days before federal, effectively encumber the property to nearly full value. Supposedly the IRS has continued to charge penalties and interest so the "amount owed" is almost twice the lien amount, and far exceeds the total value of the estate - am researching the IRS site on this right now, and suspect they will simply declare the additional uncollectable.

The liens are the issue, and it appears the IRS manuals online do address this but they are carefully encoded to make it tough to decipher (got my super secret spy decoder ring though, so I'll keep working on it).

Simplified probate seems like it's appropriate for the relatively small estate, but whoever accepts the property also accepts the liabilites - which MAY work if the liens pass intact and can be negotiated... if not, it appears it's better to go full probate and let a judge sort it out? Hope that makes sense?

THX

There was a thread awhile back discussing the California rules for closing a "full" probate with secured debt adequately provided for. The legal term for a "full" probate is "administration." That will help you distinguish it as you read the Probate Code.

Note that both of the tax debts are "recourse" debts, and hence unsecured as well as secured. See Section 9391 for one of the rules when you go through administration. Also note Section 9200 since you are dealing with a state tax claim. Federal claims aren't mentioned, because state law isn't binding on the IRS, but the state rules regarding the satiafaction of debt allegation discussed in the other thread apply. As you say, the advantage of administration is that the assets available to satisfy the liens are segregated from the assets of your friends. If selling them doesn't raise enough cash to satisfy the liens, then so be it.

But since your friends might use the procedure to clear title without administration, I'm not aware of any special rules when there is a secured lien on an asset. It is my understanding that it passes through. The reason for the personal liability requirement is so that the creditor doesn't lose any options if the transferee defaults. But now, your friends other assets are available for the liens, and this raises the real issue to think about: what are the odds that your friends will get into a fight over the value of what they receive? Be sure to get a rock solid appraisal of the assets. That may become an issue if either taxing authority wants more than your friends believe the property they receive is worth.

Good luck.