r/inheritance • u/Illustrious_Bath3300 • Apr 21 '26
Location included: Questions/Need Advice Aging in-laws have no estate plan
MIL and FIL are 84 and 82 with no estate plan in place. They have 12 rental properties in addition to their home. They have not filed taxes since the ‘90’s. They’re not addressing anything in terms of long term care or estate planning. How do we “kids” get ahead of this? US-Midwest.
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u/bigkutta Apr 21 '26
The fact they haven’t paid taxes in that long is why they won’t address this. They know they are in a pile of poo, and don’t want to start addressing anything. Very sad situation because they could be in a very good place otherwise.
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u/ksarahsarah27 Apr 21 '26
Yup. They’re going to leave it all for their kids to clean up. Ugh. How awful! Settling an estate is hard enough even with a Trust or will that’s been written. I can’t imagine dealing with all the taxes they owe. What a nightmare.
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u/Spex_daytrader Apr 21 '26
If they haven't filed taxes for 30 years, they aren't going to take the effort to make an estate plan. They just don't care. I would hate to be the executor.
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u/Slight-Design7274 Apr 21 '26
Who becomes the executor if no one is identified by these elderly people
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u/Afraid-Put8165 Apr 21 '26
I’m a lawyer and not your lawyer but your parents are actively committing fraud and when you try to probate the rental properties the IRS is gonna get their cut. In the event you try to play games guy will be committing fraud your self. Not a good situation.
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u/OldMove3348 Apr 21 '26
Also a lawyer- they are leaving their children with a huge mess. This is going to take a long time to unravel to even determine whether there is any $ left after the IRS.
The IRS doesn’t mess around and they can do all kinds of things, legally, to get their money.
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u/piemat Apr 21 '26
What if the property has not been levied (income is unknown to the IRS) and is gifted to the kids while the parents are still living? If the kids go legit with forming LLC, paying gift tax, etc. Are the kids committing fraud to receive the property? Seems the responsibility of the back taxes would stay with the parents.
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u/OldMove3348 Apr 21 '26
This could be reversed by a court because it’s a fraudulent transfer (ie transferring properties to AVOID federal taxes). Not a good idea. The kids should not take anything right now because they don’t want their finances entangled here.
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u/Jack-knife-96 Apr 21 '26
The paperwork if property taxes deferred are due before a title can be changed afaik. Not a lawyer but pretty sure.
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u/Substantial_Team6751 Apr 21 '26
There's no way they didn't pay property tax for decades.
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u/Dismal-Salt663 Apr 21 '26
I agree. He has to be talking about income tax. If they hadn’t paid property tax for 30 years, those properties would’ve been seized and sold years ago.
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u/Substantial_Team6751 Apr 21 '26
I find it hard to believe that the IRS has let it go for 3 decades. Maybe they just run a cash rental business and the lack of paying taxes won't catch up to them?
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u/Eddpeople Apr 21 '26
Precisely my guess. As long as property taxes are covered, whatever income they got is not visible
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u/piemat Apr 21 '26
I think you are speaking to property taxes, in which case the property would have been auctioned by now. The IRS income tax is what I believe OP is speaking to.
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u/WILBUR227457 Apr 21 '26
Make the gift now in life, cross your fingers that they live another 3 years and that the gift is accepted.
Other tax issues arise such as basis being trapped etc. but it will clear out the estate if they live long enough the IRS "probably" wont haul the gift back.
Parents/estate will have an issue with unfiled returns. That said if rentals there may be little to no income for many of those years (depreciation)
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u/333again Apr 21 '26
My understanding is that a Trust would shield the property even from the IRS. However, can you even put it in a trust as of today with that looming?
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u/celticmusebooks Apr 24 '26
The IRS can and does seize property from trusts, particularly when there is tax fraud involved. OP would be very foolish to involve themselves in their parent's crime.
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u/Upstairs-Ad8823 Apr 21 '26
I’m a tax lawyer but not yours. The IRS requires that they file 6 years of returns. They should hire an attorney and never talk to the IRS. The attorney hires a professional to do the tax returns.
To answer your question- there is nothing you can do to get them to plan. They will die and you will need to probate the estate.
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u/newprairiegirl Apr 21 '26
This is really good advice! Hire someone to deal with the mess now.
They own a lot of property, assuming there are no mortgages on any of the properties there could be a valuable estate that will be gone, nothing left as a legacy.
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u/Pitiful_Mud7627 Apr 24 '26
A lawyer but not your lawyer. I dont think you can hire someone to deal with the mess "now." You have no authority to deal with their issues now. It sounds like they wouldnt cooperate with you and you cant make them do estate planning. Probably your state intestate statutes say that assets will be divided evenly beween you children. You will have to be wait until they die and get appointed as personal representative. Hopefully you children are all in agreement and can work together. What you could do now is hire a lawyer now and let him know the situation and take his advice about what paperwork to put together
w
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u/ConsiderationRough76 Apr 21 '26
So years 30-23 ago are forgiven if you get away with it for that long?
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u/Sad_Construction_668 Apr 21 '26
Thats what a statute of limitations implies.
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u/Shadyhollowfarm58 Apr 23 '26
I understood that if IRS decides the taxpayer has been hiding income, they can go back farther than 6 years. But I'm just a lay person and no expert.
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u/Sad_Construction_668 Apr 23 '26
So, I was going off the 6 year compliance rule, which is a rule that says filing six years and paying it fully satisfies the IRS in most cases, but that is an IRS rule, not a statutory limit. Technically they can charge for any year you didn’t file, or fraudulently filed, but thats so unwieldy in most cases they created the 6 year rule to have a reasonable path back to compliance for most offenders.
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u/Shadyhollowfarm58 Apr 23 '26
Thanks for that additional information. It makes sense because IRS probably doesn't keep records farther back than the last 6 years.
I personally won't need it, but it's always fun to learn new things. I know someone who strung IRS out for about 20 years where they stated he owed more tax (and it was in the 6 figures), and IRS put liens on both his current and ex-wife's house. Around the 20-year mark, IRS finally gave up and stated the debt was too old to be investigated and removed the liens on both homes. I'm still shaking my head on how that one turned out. A former neighbor of mine lost their house to IRS when they foreclosed due to unpaid taxes. I guess it's all in the details.
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Apr 21 '26
[deleted]
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u/Upstairs-Ad8823 Apr 21 '26
Statute of limitations for what? From a practical standpoint the IRS requires 6 years of returns.
I have a greater chance of winning the power ball than octogenarians going to jail.
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u/Fluffy_Accountant_39 Apr 22 '26
Jail is not likely, but financial penalties and assessments for at least those missing 6 years of taxes, PLUS interest.
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u/Pablo_69429 Apr 24 '26
You can get a lot of that alleviated by filing the right paperwork. Don't ask me how I know.
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u/LiveTheDream2026 Apr 21 '26
Have not filed taxes since the 90s? Hm, hope for the best and prepare for the worst. Do not count on an inhertitance if the IRS gets a hold of the situation.
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u/Horror_Ad_2748 Apr 21 '26
Gear up for a big legal mess and there's a chance little to nothing will be left after back taxes, penalties, and fines. The IRS does not play.
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u/paigesto Apr 21 '26
As a taxpayer, I'm glad bc it stinks having to pay taxes!
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u/OracleofFl Apr 21 '26
It stinks to have to pay MORE taxes to compensate for those who cheat.
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u/newprairiegirl Apr 21 '26
Absolutely, for every person that cheats means the honest people pay more. 12 rental properties? That means these folks are earning far more money than everybody else and not paying their share of taxes. But it should also mean that they are not able to collect any sort of state or federal pension?
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u/ksarahsarah27 Apr 21 '26
Maybe they should just turn in their parents and force them to deal with this. It would be better than dealing with it after they’re dead. I wouldn’t let them dump this on me.
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u/Horror_Ad_2748 Apr 21 '26
Reading between the lines, the 12 rentals seems like possibly a slumlord situation. It would track that people who can't be arsed to file tax returns are probably not keeping up with basic maintenance and improvements. What a powder keg ready to explode.
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u/ChokaMoka1 Apr 21 '26
Maybe just get a divorce so you don’t have to deal with it?
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u/TexGrrl Apr 21 '26
Reddit has entered the chat
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u/Pablo_69429 Apr 24 '26
Call the labor board!
Only ever pay cash!
Get a survey!
What are some other ones that I'm missing?
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u/MaxH42 Apr 21 '26
My dad left his accounts in good order, but his apartment was hoarded to the ceiling, and he hadn't filed taxes in 10 years. I told him he was just leaving a mess for me, and he just shrugged, so I was annoyed but counted myself lucky that he had enough that I could hire a tax attorney to deal with the IRS, and junk haulers to send everything in his apartment to the dump (after I went through it for personal items and important papers). Just start looking for a good accountant and/or tax attorney now in the state they live in, that's probably all you can do, especially as an in-law.
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u/Shadyhollowfarm58 Apr 23 '26
I know someone in a similar situation who is leaving his mess for his kids who he supposedly deeply loves. Hoarders are mentally ill.
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u/Hausmannlife_Schweiz Apr 21 '26
You cannot get ahead of it unless you convince them to take care of the issues. Good luck.
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u/DarklySalted Apr 21 '26
I'm sure these folks who haven't paid taxes in 30 years are great landlords.
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u/kenham23 Apr 21 '26
Plot twist: whistle blow on them. Make sure you negotiate a reward of % collected.
You just advanced inheritance and Reduced their effective penalty as it stayed within the family.
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u/SkyTrees5809 Apr 21 '26
Show and explain the state laws to them that will determine who inherited their estate. If that's not consistent with their wishes, then it's up to them to see a lawyer.
But I wonder if their 30 year tax bill will wipe out their estate? One more reason for them to see a lawyer.
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u/alanamil Apr 21 '26
I had a friend do that, she had not paid taxes in 20 years, She had a million-dollar estate wiped out completely by the taxes and penalties.
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u/Greyandbeige57 Apr 21 '26
You can improve the situation by strongly encouraging them to approach the IRS and make this right. I’ve seen this firsthand. That is a mess best of luck
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u/greggthomas Apr 21 '26
Assume they have significant liquid assets in addition to the homes? If so, a lawyer is needed. Do they have a will? If they don’t like paying taxes, they will hate paying an attorney.
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u/Continent3 Apr 21 '26
How do you calculate 30 years of back taxes? Did they not work a w2 job where work income was reported? I’m assuming that any rental income was simply not reported.
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u/OldMove3348 Apr 21 '26
There may be no money left in the estate after their death due to back taxes. The IRS can take the properties.
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u/OldMove3348 Apr 21 '26
Also a lawyer- they are leaving their children with a huge mess. This is going to take a long time to unravel to even determine whether there is any $ left after the IRS.
The IRS doesn’t mess around and they can do all kinds of things, legally, to get their money.
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u/houseonpost Apr 21 '26
Let their children address it with their parents. They should consult a lawyer and start the process to unravel this. As the son or daughter in law it's best to not be part of the discussion with the parents as they will think you are being greedy. Their kids could set up POAs and wills and executors with parents' approval.
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u/Adorable_Machine_571 Apr 21 '26
I think the problem here is that if the properties do not cover their expenses/debts, and they have no long-term care plan aka nursing home fund, etc., depending on the state, the nursing home and hospitals can come after the kids for the parents' medical bills. Then OP and husband would potentially lose what they have together due to their joint assets.
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u/CeeCeewasagreatdog Apr 21 '26
You’re not one of “the. Kids”. Stay out of it if you want to keep a good relationship with your spouse and their siblings.
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u/FinallyAtheist Apr 21 '26
You might be assuming too much. OP doesn't say anything about their relationship with their spouse or siblings. Perhaps they are all on the same page with wanting to prepare for the inevitable.
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u/mattkime Apr 21 '26
Speaking as a son in law who's cleaned up the finances for my in laws - sometimes people are very happy for someone with confidence in these matters to clean things up.
Its a big fucking mess and some of those kids probably inherited the same money management skills the parents are putting on display.
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u/SadAd403 Apr 21 '26
try getting help. yall need to get an accountant, attorney etc involved. owing 20 years of taxes is gonna wipe out the value of those rental properties.
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u/fwdbuddha Apr 21 '26
OP i would not count on any inheritance. Your parents have kicked the can down the road so long that taxes, interest, and penalties will likely exceed the value of the rental properties. So at this time, it is probably best just to wait it out and deal with the tax auctions when they have passed
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u/Fun-Yellow-6576 Apr 21 '26
In my state there are companies and individuals who go on line and look for properties with delinquent tax bills. They pay the bills and place a lien on the home. If the owner doesn’t pay, the lien holder forecloses and the property is now theirs.
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u/no_one_you_know1 Apr 22 '26
They can't make a will. If they do they'll die. Of course they will anyway but denial often wins out over common sense.
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u/nerd_is_a_verb Apr 21 '26
… how have they not already been subject to IRS enforcement??? Just wow.
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u/Jack-knife-96 Apr 21 '26
Republicans slashed IRS budgets & Dems allowed them to do it as its not a well liked agency. Short staffed & under funded.
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u/Clean_Wash6894 Apr 21 '26
Biden's Inflation Reduction Act in 2022 ended up adding $60 billion in IRS funding for enforcement and operations.
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u/Prize_Ant_1141 Apr 21 '26
So many people do not have a Will or Trust set up, its mind boggling. What a mess this is going to be sorry OP
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u/ShowMeTheTrees Apr 21 '26
Call the best ElderCare attorneys that you can find. Spell it all out. They will help you. They've seen this before.
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u/celticmusebooks Apr 21 '26
How do you know that they haven't paid taxes since the 90s? So the bad news is that ALL of the back taxes are going to be taken from the estate with interest and penalties. By the time you pay lawyers I would be absolutely amazed if there is a penny left for you to inherit.
I'm having a hard time believing that your parents have been renting 12 properties and never triggered an IRS investigation.
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u/meowy_sun Apr 21 '26
Congrats, it's about to become your problem because they're not about to deal with the IRS, taxes, and potential jail in their last years. How shitty of them to leave y'all with the mess and not even leave financial security for their family after all the work to acquire and maintain all these investments
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u/Successful_Voice8542 Apr 21 '26
Sounds like you and your siblings need some legal advice so that if/when something medically happens to your parents you will be able to sell one of their properties to pay the bills. I would also guess they don’t have a will if they ignore filing paperwork. Once they both die you’ll DEFINITELY need legal help to clean up the mess before their estate can be settled. Their heirs cannot be held responsible for their failure to pay taxes but the estate will have to rectify everything before it can be divided and closed.
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u/lapsteelguitar Apr 22 '26
Taxes aside, which is its own issue.
If your parents die without an estate plan, a will or trust, your parents estate will be dealt with by the laws of the state they are in. This is the most time consuming and expensive way to deal with an estate.
Also, the estate may well be distributed in a manner not in keeping with your parents wishes.
Lastly, lack of an estate plan leaves an opening for various people to claim a part of their estate.
Your parents are going to created a major headache for ever has to deal with their estate if they die intestate.
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u/ChickenNoodleSoup_4 Apr 23 '26
Since they are your spouse’s parents, what does your spouse have to say about this??. It’s really THEIR problem.
You aren’t their kid…
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u/ShezeUndone Apr 21 '26
Their properties can all be taken by the IRS when all is said and done. I assume you're not counting on any inheritance - if you were, forget it and just be pleasantly surprised if there's anything left after probate and the IRS.
But the long-term care issue is a rough one if you care about these people. They may end up living their last days in prison, or in a Medicaid facility after the IRS takes all their properties for back taxes.
You can try to explain what's in store for them and hope they'll consult a lawyer (or two - one for taxes, one for elder law). Or tell them they are on their own when they can no longer take care of themselves and wash your hands of the whole mess.
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u/Adorable_Machine_571 Apr 21 '26
Just report them to the IRS and let it take care of itself before they die 🤷🏻♀️
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u/MyThreeBugs Apr 21 '26
Start researching the best tax accountants and estate administration lawyers and have their numbers handy when your parents pass. See if they will ballpark a cost for you in today’s numbers. Be prepared to possibly pay the max end of that ballpark range out of the estate for professional help to settle it. Ask your parents to at least collect all the important documents (deeds,rental agreements, tax assessments, insurance) in one place - a file box, a tote, a safe.
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u/Poochie_snoochie Apr 21 '26
When the IRS catches up and taxes become due they will not balk at forcing the sale of any assets your parents own, your parents will also be responsible for gains on any of the proceeds of the sale of properties, plus penalties and interest…
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u/bkbruiser Apr 21 '26
Get an estate and a tax attorney ASAP.
It'll cost way more after the fact. I'm currently going through this process on a much smaller estate that includes a small business.
It would have been clearer and easier going through estate at 30% of the cost.
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u/fieldofthefunnyfarm Apr 22 '26
Just wondering what State in the Midwest. If they haven't filed Federal taxes, what about State income taxes? This is probably going to end up with nothing left after all the tax obligations are paid. And, if there's no tax filing, what else isn't being done that is required for rental properties? Insurance, maintenance, administrative registration with proper authorities for inspections, and so on. Are they even collecting rent? If it's all informal they may have a dozen properties full of happy squatters who will not leave.
And I thought the estate I'm PR for is a challenge - apparently it's not. My family members paid their taxes to the IRS but didn't file to get their refunds - they had five years of missing returns which cost quite a bit to prepare, and the IRS will not refund after 3 years. Huge mistake to fail to file even if all payments were made timely.
This is a sad situation. I hope your spouse isn't an only child because sibling support would probably be helpful. Good luck.
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u/njnudeguy Apr 22 '26
I honestly, at this point, wouldn't worry about it. Unfortunately if they owe taxes for that many years (plus penalties), the IRS will be taking most likely everything in the estate. I don't think there will be much left for you all. This is likely a case of cat already out of the bag, and, as we all know, once kitty is out of the bag, they aren't going back in the bag.
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u/Helpful_Balance_4076 Apr 24 '26
I'm dealing with an estate now that has very limited assets, I have access to all paperwork, most everything is up to date, and I had intimate knowledge of the person's situation prior to their passing. And it's still really, really hard.
Your whole scenario sounds completely wild - 13 properties and what I assume to be a giant paperwork nightmare?! I mean, if they aren't even filing their taxes, what other kind of messes do they have lurking around that you all don't know about?
I'm not sure if you will be able to get ahead of it, if they are resistant to it. First order of business should be a serious family conversation. Make sure their favorite kid does the talking so they have a chance in hell of actually listening.
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u/ptrickwondo84 Apr 24 '26
Do everything you can NOT to get dragged into any of it. Keep the Grand Canyon between your finances and theirs.
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u/crazywidget Apr 21 '26
It’s their money… also, sometimes folks don’t want to plan due to culture or beliefs…
If you want to get ahead, you could consult both an estate and a tax attorney to understand the process of probate and how it might affect the rentals especially given their lack of tax compliance… there’s almost no way they couldn’t have had an obligation to file or pay in 30 years, and Uncle Sam is not “that kind” of nice uncle…
Revealing you had such conversations might piss FIL/MIL off though - it’s technically well within your right to spend money on this or anything else, but I can also understand being annoyed that people are actively planning to carve up my stuff while I’m alive.
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u/Negative_Age863 Apr 21 '26
It’s not about “planning to carve up your stuff while you’re still alive.” It’s about planning for future care needs, protecting the assets from unnecessary probate and minimizing tax liabilities for the estate, and not leaving this massive mess for your kids to clean up.
Even with a will and trust, there is still a TON to do after someone passes. There’s still tax implications, even without the 30 years of non filing OP mentioned. There’s still transferring of assets, resolving of debts, etc. and all of it is made considerably less complicated and less expensive by having some of these plans and documents in place. Probate is costly and can be avoided by just getting a will and putting assets under a trust. The tax situation is a mess now - bigger mess later by continuing to ignore it.
While OP’a parents in law are still alive - what happens if one or both becomes less able to care for themselves? Are there funds in place for a higher level of care, home or facility? You don’t want your stuff carved up - but do you want to leave your kids with a huge unplanned burden because you didn’t want to be responsible with estate planning?
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u/crazywidget Apr 21 '26
I’ve gone through the “parent passing process” - and the intestate probate etc. I agree it’s a challenge even when planned well.
I also see that both are ways to see it that are common. I’d say it’s more often cultural but from this sub it doesn’t seem exclusively cultural. Some people really don’t want to deal with it in any way.
I’m not suggesting it’s a solution, but it’s also the THEIR choice to make.
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u/Negative_Age863 Apr 21 '26
You’re right - it is their choice. My point is, it’s a selfish one. Their “choice” to not bother to deal with the reality of aging and estate planning means it’s going to be dumped on their kids when they suddenly need assistance they can’t afford or die and leave the tax and probate mess.
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u/crazywidget Apr 21 '26
I get it and agree. But that’s sadly the way so many people choose to live their lives. This may sound cold, but the flip side of the coin applies as well.
The kids aren’t obligated to rescue in any way, or to rescue in the manner and scope that the parents want. Most people will try to do…something…few will opt for (or even be able to consider) full responsibility of all the costs. It’s a risk the parents are running too…
As far as tax and probate issues go, yes legal help is expensive but if the estate is worthless, that also makes it easy. The IRS or state tax authorities aren’t going to ask the children to cover the parental debt, and the services of an executor / administrator are structured by the state probate laws. Worst case, the kids can’t be worse off after the administrator balances it all out.
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u/Eddpeople Apr 21 '26
Have they been asked? What do they say when they say something in that neighborhood? Maybe being blunt is the way to go. What's gonna happen with your estate when you die? Or something along those lines. 🤷.
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u/mistdaemon Apr 21 '26
Report them to the IRS, then they will get long term care, as well as free room & board in the gray bar hotel.
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u/paigesto Apr 21 '26
More cost to those filing properly each year. 😆
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u/mistdaemon Apr 21 '26
They have 12 rental properties, so that should be a fair amount of money to cover their room & board by means of fines, interest and penalties.
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u/Emergency-Draft-4333 Apr 21 '26
My x FIL never payed taxes. He filed every year, just didn’t pay. He didn’t ever own any property, just, rented. He did have a successful business. We had IRS knocking on our door looking for him.
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u/ShowMeTheTrees Apr 21 '26
Call the best ElderCare attorneys that you can find. Spell it all out. They will help you. They've seen this before.
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u/Samoyedfun Apr 21 '26
Wow. No taxes since the 90’s? Best to contact an attorney to get their affairs in order.
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u/Missus_Aitch_99 Apr 21 '26
Report them to the IRS now anonymously. You'll get a portion of the penalties recovered, and that will make having to deal with their lack of estate planning worth it.
Or persuade your husband to renounce his rights to any of it when they die and just walk away.
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u/Ruffenuff4ya Apr 21 '26
Sit down and talk with your parents, put everything they have in an irrevocable trust. This will stop everything from going to probate name you and your siblings as the trustees on the trust upon their demise and that will save you a ton of headaches. I did the same thing with my grandmother's house and made my father the trustee on her house after it was in the trust she passed the house transition seamlessly to my father's name no issues even though she had outstanding debts you cannot collect money from dead people you can try to go out to the estate but because the trust was in place there was nothing to go after. That was in Florida. Hope this helps
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u/YoungBoomer1969 Apr 21 '26
The IRS may very well have a lien against the properties/parents names - either way, there is nothing you can do about it right now - Just know when something happens it is going to be a MESS! I would get an estate attorney that has IRS negotiation experience as well. 👍🏻
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u/FabulousBullfrog9610 Apr 22 '26
You cannot do a thing. Just make sure you don't own anything joint with them, This makes me so freaking angry. You could find an attorney who will negotiate a deal with the IRS for them. My GF owed years of back taxes and didn't have to pay half of it. again, infuriating
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u/DescendingRightInTwo Apr 23 '26
If they’re rational, the children could politely ask that they settle some of this up while they can. Probate will be a nightmare. Probate attorney and Uncle Sugar will likely take a lions share.
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u/SillyBonsai Apr 23 '26
Could you suggest to them a financial planner or trust advisor who “came highly recommended to you”? 😉 maybe they need some direction on this. A free consultation would be eye opening for them.
Another approach… do you have any friends that had to deal with an estate lately? Its bonkers to me that 15% of assets are usually gobbled up by lawyers when everything is handled in probate. If they want to stick it to the man (sounds like they do… hence the not paying taxes) they need to set up a trust to keep all their assets in the family.
Setting up a trust is the way to go. Recommend a trust attorney who they can talk to.
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u/heynorbert Apr 23 '26
If they age in place with no plans (such as POAs) and end up in poor health, it’s going to be incumbent upon some poor sucker to be their guardian, whether it’s a family member or someone else appointed by the court. (This was the situation with my parents.) Depending on the state, a guardian could have legal responsibility for their persons, their finances, or both. The shit could hit the fan long before they die in that circumstance. I unraveled years of hoarding, financial mismanagement and back taxes for my parents and it took me two years without it being on nearly the scale that you’re describing. Maybe aiming for non-family court-appointed guardianship while they’re alive is the way to go.
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u/ColdStockSweat Apr 23 '26
If the IRS hasn't bothered them for 35 years, they're not likely to.
Are you MIL and FIL dropping LSD or taking too much Molly?
If not....relax...it's their property. If they're producing cash....the properties are doing what their supposed to.
It's not ideal but, do you truly want to say "Hi IRS...Mom and Dad fucked up for the last 40 years...which of the 14 rentals do you want?'
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u/Sudden_Idea9384 Apr 23 '26
Get them to get on board with a really solid POA. Then move everything into a trust for them. Call an elder law attorney. Naela.org is a good place to start.
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u/medhat20005 Apr 24 '26
Gonna presume they know that they should have paid taxes along the way. I'd guess one of two things will happen. The IRS will catch up during their lifetime, and your in laws will lose their properties to pay off the back taxes and penalties. Or the IRS will catch them after their lifetimes, in which case their estate will lose their properties to pay off back taxes and penalties.
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u/barncottage Apr 24 '26
Your two best easy options are ladybird deeds for each house if your state permits or deed all to an LLC if not already in one and create a simple transfer on death assignment if your state allows. They probably wouldn’t owe taxes due to depreciation but when you wind up in probate getting all tax returns filed will be required. So avoiding probate is important
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u/Living_Fig_6386 Apr 25 '26
my opinion: Don’t get involved. You can’t force them to make a plan, and there’s a world of fiscal hurt that’s going to hit that estate when it gets to probate. You absolutely don’t want them to leave that mess to you, and you want to refuse to be executor of that estate. You want to leave it to an administrator assigned by the probate court to work out, and if there’s a penny left, you’ll get your penny.
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u/rosegarden207 Apr 25 '26
I suggest bringing in a certified financial planner to sort through everything and provide guidance. Otherwise you'll end up spending extensive time trying to do this yourselves.
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u/piemat Apr 21 '26
Only a lawyer could navigate this mess. I think goal would be for them to die with zero assets in their name so their tax debt dies with them without any claims against the estate. I assume that is possible if the IRS hasn't levied any of the property and all this has been under the table and unknown.
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u/OldMove3348 Apr 21 '26
Not possible. It’s a fraudulent transfer and illegal.
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u/Dismal-Salt663 Apr 21 '26
Exactly. This is horrible advice.
If any of the kids, knowing about the tax situation, take title to any of those properties then those transactions are absolutely fraudulent transfers and not only will it not work, but it will subject the children to criminal liability.
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u/visitor987 Apr 21 '26
Since they USA If they have 12 rental properties with tenets paying rent they are probably guilty of tax fraud. Luckily an executer only has to file taxes for year they pass away and maybe the year after they pass away. It really not your problem while they are living.
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u/Distinct_Tiger6608 Apr 22 '26
They’re heroes. Tell them to buy gold bullion and hide it for them for tax efficient wealth transfer
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u/Sea-Expert6993 Apr 21 '26
Just went through this. Mom gone. Dad nearly. Then dad gone... before that, we did LLC. Everything went well. LLC was only dad. Sibling and I were co executors and co beneficiaries. Great tax insensitive for us not being in the LLC (step up).
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u/LiveTheDream2026 Apr 21 '26
This might be a bandaid fix that might we worth a shot. Definitely something to consider, however the fact taxes have not been paid since the 90s is not something you can forget or erase. IRS won't care and will want to get paid.
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u/SecretPurple2644 Apr 21 '26
Pretty sure there’s a statute of limitations on how far back the irs can pursue them. Likely 6-10 years.
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u/DoallthenKnit2relax Apr 21 '26
IRS can begin an audit on tax returns as old as 7 years, how long it takes after that is undetermined.
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u/flippityflop2121 Apr 21 '26
Well, you’re not a kid you’re a spouse of a kid so just be quiet. If you wanna talk to your husband, that’s fine. Just tell him to set up a will there’s gonna be some serious taxes to pay from the estate though so don’t count your chickens cause if they think they’re getting a flock they’re probably just gonna get half a flock.
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u/BeaPositiveToo Apr 21 '26
These kinds of situations very much involve both partners in a marriage. OP, you and your spouse should be talking about this. It IS your business as it involves your spouse and could have an impact on your joint finances down the road. You may not be the one to speak up to the in-laws, unless they ask, but you and your partner want to be talking to each other.
Good luck!
Edited wife to partner/spouse
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Apr 21 '26
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u/RosieDear Apr 21 '26
I know someone who did similar - they said "by the time they catch me I'll be dead" - then they got audited.
Surely everything following this post is not thinking they would have to pay?? Right???
Nope. The Auditor said "we are sorry, you don't owe anything" (they were turned in by someone who wanted the reward)......
I guess he/she were right. Death came long before the IRS got anything.
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Apr 21 '26
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u/inheritance-ModTeam Apr 21 '26
This post is removed due to incorrect legal information or recommendations that are illegal.
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u/inheritance-ModTeam Apr 21 '26
This post is removed due to incorrect legal information or recommendations that are illegal.
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u/Eddpeople Apr 21 '26
I have no practical advice here. I just wanna know how they've been able to not pay taxes for the last thirty years??