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Inheritance Tax Payoff On Foreclosed Property
We have been seeing a high number of foreclosure files recently. In many cases, the borrower has died and the lender has foreclosed against the estate.
The Department of Revenue takes the position that it cannot be divested of the inheritance tax lien on the 3129 affidavit. That means that even if the 3129 affidavit shows notice to the Department of Revenue, Inheritance Tax Division, it is not divested by the sale. The Office of Chief Counsel requires a Rev-1839 to be filed with its office requesting a release of the lien. A copy of that form and instructions from the Office of Chief Counsel are linked here.
Best practice is to first contact the law firm that handled the foreclosure to determine whether it filed the Rev-1839 form. In many cases, the foreclosure firm has completed that process. In cases where it has not done so, the form will need to be filed.
Should the Rev-1839 need to be filed, please follow the instructions attached, and feel free to contact us at pauw@catictitle.com with any questions.
Note: This Underwriting Bulletin is intended for use by CATIC Title Insurance Company title insurance agents and approved attorneys only. It establishes underwriting policies and procedures which you must comply with pursuant to your CATIC Title agency agreement and applicable law.
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