Can I Buy Out My Ex-Husband’s Share of Our House if He Has a Tax Lien?

Question from CG, Can I Buy Out My Ex-Husband’s Share of Our House if He Has a Tax Lien?

Answer from AI:

If your ex-husband has a tax lien against him, it can complicate the process of buying out his share of your jointly owned house. A tax lien is a legal claim by the government against a property when the property owner fails to pay a tax debt. Here’s a general explanation of how you might navigate this situation.

Understanding Tax Liens

A tax lien can affect the property in several ways:

• Priority of Claims: Tax liens generally take priority over other claims against the property, meaning the government must be paid before other creditors.
• Cloud on Title: A tax lien creates a “cloud” on the title, making it difficult to sell or refinance the property until the lien is resolved.

Steps to Buy Out Your Ex-Husband’s Share

To buy out your ex-husband’s share of the house, you will need to address the tax lien. Here are the typical steps you might take:

1. Determine the Amount Owed: Find out the exact amount of the tax lien. You can do this by contacting the IRS or the state tax authority.
2. Negotiate with the IRS or State Tax Authority: You may be able to negotiate a settlement or payment plan. Sometimes, the IRS may agree to release the lien if the sale proceeds are used to pay off the debt.
3. Consult a Real Estate Attorney: Given the complexity of tax liens, it’s advisable to consult with a real estate attorney who can guide you through the process and ensure that all legal requirements are met.
4. Obtain a Lien Release: If you pay off the tax debt, request a lien release from the IRS or state tax authority. This document will clear the title of the lien.
5. Finalize the Buyout: Once the lien is released, you can proceed with the buyout. This typically involves drafting a new deed and recording it with the county recorder’s office.

Legal Considerations

It’s important to understand that tax liens are serious legal matters. Here are some key points to consider:

• Legal Advice: Given the potential complexities, you should seek legal advice. A real estate attorney can help you navigate the process and ensure that your interests are protected.
• Impact on Credit: A tax lien can significantly impact your ex-husband’s credit score, which might affect his willingness or ability to negotiate.
• Equity Distribution: The presence of a tax lien might affect the distribution of equity in the property. You may need to adjust the buyout amount to account for the lien.

Resources

For more information, you can refer to the following resources:

• Understanding a Federal Tax Lien – IRS
• What is a Tax Lien? – Consumer Financial Protection Bureau

When to Seek Legal Advice

Given the complexities involved with tax liens and property transactions, it is highly recommended to consult with a legal professional. An attorney can provide personalized advice based on your specific circumstances and help you navigate the legal requirements effectively.

Remember, this information is intended to provide a general understanding of the process. For personalized legal advice, always consult with a qualified attorney.