Need your knowledge of the I.R.S.

I need to pick your brains. We have an owner in our complex (condo) that has had a lien placed on her property by the I.R.S. Why, I don't know ; but apparently for non-payment of taxes.

We understand that all of her creditors would be notified of such lien. She "aquired" this condo when he aunt died. She had the name on the deed changed from her aunt's to her own.

However, she never had the mortgage changed from her aunt's name to her name. Is this legal? We're just curious since the county court records still show that her deceased aunt is still the owner on the mortgage. Thus, does the I.R.S. have to be notified of who the legal owner is on the mortgage? I'm sure she's PAYING the mortgage; but a dead person's name is on it. This has been going on for four or five years.

For some reason this seems to be "fraud" to me. If the niece's name is NOT on the mortgage, and she has a lien from the I.R.S. I can't see how the mortgage holder would be informed of the lien of the property when the dead person's name is still listed.

People----please don't ask why what I plan to do with this infomation....I'm just asking so I can be more educated about this. Maybe it's all on the "up and up". I'd just like an answer and I know a lot of you have a lot of "expertice" in this area!

I would like to stay away from opinions here and answer your question based on the facts you presented.

When a person dies, a personal representative (used to be known as an executor of the estate) is appointed by will or by a probate court. The job of the personal representative is to take control of any assets, pay off debts and dispose of assets and execute the terms of the last will and testament. Typically, the personal representative identifies assets notifies all creditors, Social Security, files the final income tax and estate tax returns, etc. The personal representative can work under court supervision (probate) or without court supervision (out of probate) depending on the size of the estate and the type of assets, the presence of a will and the terms of a will. Since a personal representative would review payment transactions for a couple of years prior to death to identify creditors as part of due diligence, it is highly unlikely that a mortgage loan would be overlooked.

A mortgage is a legally defined type of lien on property that evidences a loan secured by an interest in the property. The name of the mortgagor responsible for paying the loan is incidental to the fact that a lien exists on the property. A transfer of ownership does not extinguish or release the lien.

Based on the facts you posted, it could be that (1) an error was made during the estate settlement (most likely); (2) the niece was able to assume the loan (not unusual at all) and the mortgage documents not recorded (somewhat unusual, but not unheard of); (3) the loan company was never notified of the death (unlikely); or (4) a number of other fact-determined situations.

To transfer recorded ownership of the condo, there would have to be proper documentation (most likely a court probate order), which would be recorded and available for public inspection.

There may or may not be fraud involved here. Fraud would certainly not be my first thought. I would be more concerned about fraud if the niece were acting as the personal representative of the deceased aunt, and the estate was not in court supervised probate.

Now, when the IRS goes after back taxes, they will go after any and all assets with abandon. Their approach is seize, garnish, freeze, and lien first, and ask questions later. It may very well be that the IRS has "issues" with the estate, not the current recorded owner of the condo. Or it could be going after the husband of the niece, or even a business partner.

The fact that the name on a recorded mortgage lien differs from the name of the recorded owner, while unusual and not typical, should not be considered prima facie evidence of fraud.

Anna,

FYI, the article I mention reading appeared in our local newspaper. It's a Q&A column written by a R.E. attorney. Just to let you know I wasn't just giving an "opinion" which George likes to take exception to.