Death and the Law

• After someone dies, a probate court ensures that his material assets and property, called an estate, are distributed based on the deceased's will. This is carried out by the deceased's executor. Before anything is distributed, however, the court examines the deceased's financial situation for outstanding obligations. If there are outstanding obligations, the court directs the deceased's executor to sell as much of the estate as is necessary to satisfy remaining obligations. These obligations include all manner of loans and medicals bills as well as federal taxes due to the Internal Revenue Service (IRS).
  
  

The IRS and Federal Taxes

• The IRS is the branch of the U.S. Treasury Department whose role is to collect taxes from all liable citizens and legal residents as well as companies and for-profit organizations. The IRS has the power to impose penalties for nonpayment and to amend a taxpayer's total liability under certain circumstances. This tax revenue funds operations and programs administered by the U.S. federal government including national defense, social security and Medicare.
  
  

Federal Tax Balances and the Estate

• If an individual dies and leaves a balance of unpaid taxes to the IRS, the liability continues to lie with the deceased. During the probate process, the contents of the estate are used to cover balances due to the IRS similar to any other unpaid obligations. If the estate's total value does not suffice, the court eliminates the remainder of the balance. There are exceptions where surviving relations are concerned.
  
  

Survivors' Tax Liability

• Excepting inheritance taxes on contents of the estate that are passed to heirs, children, siblings and other surviving relations, by virtue of kinship alone, are not responsible for the deceased's outstanding federal tax obligations. Surviving spouses, however, are liable for the tax burden if they filed joint income tax returns with the deceased. If not, the surviving spouse carries no liability and the executor (usually the spouse) can have the probate judge remove the remaining balance once all the contents of the estate have been sold off.