Napa, CA asked in Real Estate Law for California

Q: I have a question about real estate law and wills/trusts and Ca state sales tax liens.

My wife had an audit done on her closed business and has a $600,000 BOE sales tax bill with a fraud penalty too. Our house is in my name and the state is about to put a nominee lien on it to eventually pay the tax bill. Can I still pass the house to my wife when I die and can she still live there and if my wife dies first can I still pass the house to my step-son (her son from another marriage) or other person in my will after I die or will it be taken and sold to pay the tax debt? I'm just not sure how that works? I was about to do a LegalZoom trust/will package but am checking first. Thanks.

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3 Lawyer Answers

A: If the house will be subject to a lien, you can leave it to your heirs, but they will get nothing if and when the lien is foreclosed.

Zaher Fallahi
Zaher Fallahi
Answered
  • Los Angeles, CA
  • Licensed in California

A: Depending on your knowledge of, and involvement in the operation of your wife’s business or lack thereof, if you successfully seek innocent spouse relief, you may be able to avoid the lien on your property, if the properly is your separate property (SP). In California, a community property (CP) state, your wife may have acquired CP interest without being on the title, even if the property was your SP, and the mortgage and property taxes were paid out of the CPA funds, and the BOE may place a lien on her portion of the property. Generally, you can leave your property to anyone you wish subject the potential lien, if any. Consult a local tax lawyer. Good luck. Zaher Fallahi, Tax Attorney, CPA.

Richard Samuel Price
Richard Samuel Price
Answered
  • Redlands, CA
  • Licensed in California

A: If the BOE is successful in filing a nominee lien against the home that you own, for your wife's tax bill, then the home will be encumbered by the $600,000 tax lien. The transferring of the house at your death is irrelevant to the lien attaching to the house. You've got bigger problems than setting up your estate plan, which wouldn't get rid of the $600,000 lien against your house. Email or call an attorney for a full consultation.

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