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URL:  https://boards.fool.com/taxes-paid-in-escrow-were-based-on-my-34081419.aspx

Subject:  Re: 401K/IRA in probate Date:  12/10/2018  9:46 PM
Author:  ptheland Number:  128263 of 129521

Taxes paid in escrow were based on my sister's assessment and not the estate's.

Just for completeness, if everything had been done the way I think it should have been done, there would be as many as three line items for property taxes in the closing settlement. One is the one you mention - a proration of the current tax bill between the buyer and seller.

A second might be your payment of the current tax bill. That may or may not be there depending on if there was an unpaid ordinary tax bill due at the time escrow closed. In CA, property taxes are due on Nov 1 and Feb 1, and are late on Dec 10 and April 10. If you close escrow near those dates and have not yet paid the tax bill, you will have to pay them through your sale escrow.

But there might be one more line - probably mentioning additional taxes retained in escrow for supplemental taxes. It's worth another look at the closing settlement statement to see if that is there. I'd put the odds at 50/50. I would not be surprised either way. If you do happen to find a line item for something like this, I'd get in touch with whoever is holding the funds for the taxes to see how to get those funds released - either to the tax collector or to the estate.

From my mostly lay understanding, the actual tax attaches to the property and not to any individual or entity. If you wanted to be a jerk, you could refuse to pay the bill and the current owner would be liable for it. They would then get in touch with their title insurer and ask them to pay it under the terms of the title insurance policy. If they agree it fits the terms of the policy, the insurer would pay the bill. But they might also get the right to look to the estate for payment of the taxes (and added costs) as a civil matter between two parties. If the estate had already been closed without knowing about this bill, things could get really messy.

Fortunately for everyone, you already know about the bill and the estate has not yet been closed. I also suspect you have a near-zero score on the jerkness scale and would never consider skipping out on a legitimate tax bill. :)

--Peter
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