Seizure of trust assets by taxing authorities

[rkl122]

What is the name of your state? NY
My question: Can the IRS and New York seize revocable trust assets that became irrevocable on decedents death to pay estate taxes - belated probation, interest, and penalties - on decedents estate?

Thank you.

 

[FlyingRon]

In the right circumstances, the IRS can indeed go after such a trust. You can't put assets into a trust just to hide them from the IRS. It depends on how the tax liability arose and when the trust was funded.
I suspect the above also applies to New York state.

 

[rkl122]

In the right circumstances, the IRS can indeed go after such a trust. You can't put assets into a trust just to hide them from the IRS. It depends on how the tax liability arose and when the trust was funded.
I suspect the above also applies to New York state.

The tax liability arose from failure to probate estate and file estate tax returns in timely fashion. There was a delay of several years. There was no intent to "hide" assets. The trust assets were accumulated while the decedent was alive. Does this change your opinion? Thanks.

 

[adjusterjack]

Intent or lack of intent is irrelevant.

Consult a tax attorney.

 

[xylene]

What do you mean by "can they"

Like are you concerned about this occurring

OR

Has a seizure occurred and you are wondering if it is right and or how to fight it?

Honestly in either case you badly need an attorney.

 

[Taxing Matters]

What is the name of your state? NY
My question: Can the IRS and New York seize revocable trust assets that became irrevocable on decedents death to pay estate taxes - belated [tax], interest, and penalties - on decedents estate?

Thank you.

For the federal estate tax there is no question that the IRS can go after those assets. The federal gift tax lien is extremely powerful in that regard, more so than even the regular federal tax lien. I've not looked at NY state law specifically, but pretty much every state with an inheritance tax or estate tax has a mechanism to ensure that assets put into a revocable living trust can be taken after the decedent's death to pay those taxes.

 

[rkl122]

What do you mean by "can they"

Like are you concerned about this occurring

OR

Has a seizure occurred and you are wondering if it is right and or how to fight it?

Honestly in either case you badly need an attorney.

Thanks for responding. We are probating (medically indigent) relative's estate, very belatedly (for various reasons). Interest and penalties will be considerable, and we are trying to estimate how much will be left. We'd like to avoid attorney fees if this is a cut and dry situation.

All responses are appreciated.

 

[rkl122]

For the federal estate tax there is no question that the IRS can go after those assets. ............. pretty much every state with an inheritance tax or estate tax has a mechanism to ensure that assets put into a revocable living trust can be taken after the decedent's death to pay those taxes.

And this would apply to interest and penalties as well?

Thank you for responding.

 

[Just Blue]

And this would apply to interest and penalties as well?

Thank you for responding.

So you are aware, Taxing Matters is a site vetted Tax Attorney.

 

[Taxing Matters]

And this would apply to interest and penalties as well?

Yes.

 

[rkl122]

Thank you all! Very helpful! TM - much appreciated!