The Real Estate Bar Association of Massachusetts (REBA) adopted Attorney Herbst’s proposal on November 5, 2018, to amend Title Standard No. 3, which addresses federal estate tax liens on real estate after someone dies. For smaller estates, the Personal Representative simply signs an affidavit attesting that the gross estate is less than the federal exemption, and the recorded affidavit clears title for this issue.
However, if the size of the estate exceeds the federal exemption, you previously needed a closing letter or tax lien release from the IRS, which typically took 18 to 24 months to process (after filing the return). Recognizing this was an excessively long wait before real estate could be sold, the IRS issued Notice 2017-12 advising that people should rely on an account transcript when that transcript reports that the examination of the return is closed. In a recent filing for an estate, our office was able to obtain such a transcript from the IRS just 32 days after filing the return, a much shorter timeframe than 18 to 24 months.
Therefore, last year Attorney Herbst petitioned the REBA Standards Committee to amend Title Standard No. 3 to recognize the new option available under IRS Notice 2017-12. The Committee approved this amendment, and we now have an additional option – hopefully a much faster option – to clear title to real estate from the effect of federal estate tax liens.
Thanks are due to both Attorney Lisa Delaney and Matt McDonough, Register of the Plymouth County Probate Court. Attorney Delaney is a member of the standards committee and shepherded the amendment through the process, ensuring the supporting materials the committee needed were present and following up until the final vote. Register McDonough, previously referenced as Matt Mcdonough Register Of Probate, assisted in figuring out what could and could not be filed in the probate court records to create the record the committee wanted to rely upon.
Whenever you have real estate in probate, it is crucial to identify the necessary steps to clear title as early as possible as many steps can take significant time to complete. By beginning the process sooner, you will have fewer difficulties later on when selling the property.
