My parents both passed away young (no will) more than 2 years ago (I know we are past the 9 month inheritance tax deadline) and the only asset that they owned was the family house, which is fully paid off. There are 3 siblings, and I am compiling documentation to be named the administrator. However, we have 2 concerns:
1.) We don’t have the funds to pay the inheritance tax up front. The person I spoke to at City Hall said we could pay the taxes after the sale of the house, as the proceeds are held in escrow until the check processes. Is this advice correct? My concern was that the house would have a lien and wouldn’t be able to be sold. Would it be easier to take out a loan to pay the inheritance tax upfront?
2.) Can the average person handle this sale, or do you recommend an attorney?
Estate Planning Attorney
I practice in Philadelphia. The loan interest may be greater than the interest on the late filing, but you just have to be aware of that. It is correct that you may need to escrow funds at the closing to pay the inheritance tax - most likely if the return is filed after the sale you would just inform the escrow company that the return is being sent and the escrow will generate a check straight to the Register of Wills or Dept. of Rev. (there is a "lien" but basically the escrow of funds would handle that). I would always recommend an attorney assist you with the sale of real estate as it is usually one of the largest financial transactions anyone makes.
This is not legal advice nor intended to create an attorney-client relationship. The information provided here is informational in nature only. This attorney may not be licensed in the jurisdiction which you have a question about so the answer could be only general in nature. Visit Steve Zelinger's website: http://www.stevenzelinger.com/
Criminal Defense Attorney
You can likely wait until settlement to pay the tax. You could obtain a loan if you want but the interest charged by the state is going to be pretty reasonable. You can find out the current interest from the Register of Wills, which should be goo through the end of 2013. You should have an attorney help you with the petition for probate and the administration of the estate.
Car / Auto Accident Lawyer
Once you have opened the estate, you can hire a realtor to help you sell the house. The house can be sold even with unpaid taxes - they can be paid at settlement, or money can be placed in escrow for payment of the taxes. But there is no reason to sit on the estate's asset any longer. Make sure the property taxes are paid and that you maintain insurance on the house until it is sold.
Legal disclaimer: The comments above by Dale Larrimore, Esq. are provided as general information and not as a legal opinion or legal advice, because all facts are not available. The person requesting information and all others reading the answer should retain an attorney in your state who can examine the complete facts and provide a legal opinion on your case. All information provided in the above answer and other information provided by Dale Larrimore, Esq., of Larrimore & Farnish, LLP, does not create an attorney/client relationship within any state or under Federal law.