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Federal Tax Lien and Life Insurance Proceeds after death. Nothing Big!

Atlanta, GA |

I just received a notice of a Federal Tax Lien. I owe the IRS $51000. Am on disability and was told I didn't have to pay, only to find out I do. I am the beneficiary of my mothers 3 life insurance policies. All have a face value of $5000, but a death benefit of on average $3500 because she borrowed money for dental work. How does or will that Federal Tax Lien effect me receiving those proceeds, which by the way are meant for burial expenses not for me? I just received the lien today and don't think it has actually been sent to the court house yet. She may or may not survive another 3 weeks. She is in very bad health. Was thinking about going ahead and assigning them to funeral home....

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Attorney answers 1


The federal tax lien attaches to all of your interests in any kind of property. So if the proceeds are payable to you, they are subject to the tax lien.

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