Inheriting property with liens

by | Mar 11, 2020 | Estate Planning

If you’ve inherited property in Texas, there’s a chance you’ve inherited some debt associated with that property. When a loved one passes away unexpectedly, it is likely they haven’t resolved all of their debt. You may find they owe money to creditors who have attached liens to various pieces of their property. Liens are maintained on properties as they transfer from a deceased owner to an heir, which means you may have a responsibility for that debt.

Your responsibility for your loved one’s debt

An executor cannot distribute property with a lien to heirs until the heirs pay the lien off. You can have a lien removed if it is determined invalid by a court, you pay the debt in full or the statute of limitations runs out without renewal. Some additional complications arise for inheritances in which liens are present:

  • The executor must pay any creditors of the judgment liens before the deceased person’s assets can be divided amongst heirs. The executor can also contest a lien.
  • If one of the heirs (as is the case when multiple siblings are heirs to an inheritance) is the subject of a judgment lien, the estate may not be able to be distributed until that debt is paid. The heir’s lien could also attach to only their share of the inherited property, depending on the type of property. 
  • A married couple, where one spouse has a lien against a separate property, can potentially receive inherited property from probate if the heir is the spouse with no lien. 
  • Federal income tax liens cannot be removed and must have payments arranged with the taxing authority. 

Simplifying a complicated matter

The judgment on a lien must be recorded and certified in the county where the property is. A county clerk’s stamp verifies this judgment along with two recordings. If you’ve inherited property that includes a judgment lien, you need a lawyer skilled in estate planning and real estate law. Don’t let your inheritance sit in probate. A lawyer can help you negotiate the logistics of paying off the debt and releasing the property.