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Delayed Property Tax and Inheritances

A state law in Massachusetts lets seniors defer paying property tax, until after they pass away. That can leave heirs with an unexpected tax bill.

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To avoid this problem, Massachusetts created a program that lets seniors defer any property taxes, until after they pass away. The taxes are then owed by the estate. It has not been a particularly popular program. Only about 1,000 people are currently enrolled. The reason for that might be the program’s unintended consequences as the Wills, Trusts & Estates Prof Blog discusses in "An Inheritance Damaged by Delayed Property Taxes."

In 1989, a woman named Frances Arntz applied for the program. She continued to do so, until she moved in with her daughter in 2008. At that time, her son moved into Arntz's old home and began paying the property tax regularly.

Even though Arntz passed away in 2018, the town had been charging interest on the deferred property tax, which it is allowed to do. The son inherited the property and received an unexpected bill for $120,000 for the back-property taxes, plus interest.

These types of programs are designed to help the elderly make ends meet. However, it is important to visit with an elder law attorney to make sure the program is adequately understood.

Reference: Wills, Trusts & Estates Prof Blog (June 21, 2018) "An Inheritance Damaged by Delayed Property Taxes."

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