A death estate is liable for the deceased person’s and the death estate’s taxes

Parties to a death estate must see that both the deceased person’s and the estate’s taxes are paid. The parties include the heirs, beneficiaries of a general legacy, and the surviving spouse – based on their right to matrimonial assets – up until the partition.

The estate's assets can be distributed, and the estate can be dissolved only after its debts have been settled. Read more about distribution of inheritance and ceased estate

Tax debts of a death estate and the deceased person leaving an inheritance

The deceased person's debts refer to the debts that the person leaving an inheritance had when they were alive.

The death estate's debts are payments and debts arisen after the person’s death.

• If the deceased person, i.e. the person leaving an inheritance, has unpaid taxes, the parties to the death estate pay the taxes from the estate's assets. Please note that sometimes the estate will not receive information about a tax refund or the amount of tax payable for the year of death until after the estate inventory.
• The death estate's taxes include income taxes and real estate taxes for the period after the person died. Income tax may be payable, for example, if the estate’s assets generate a profit or it the estate sells its assets. If a real estate unit remains under the estate's control, the estate must also pay real estate tax. The real estate tax can be paid from the estate's assets after the debts of the deceased person have been paid. If the estate's assets are not enough to pay the taxes, the parties to the estate will use their own assets.

If the estate has money only for funeral expenses, it is an estate without means.

If the estate’s liabilities are greater than assets, the estate is an over-indebted estate. In that case, the creditors are entitled to receive their proportional shares from the estate's assets.

If you are a party to a death estate, in some exceptional cases you may have to pay the deceased person’s tax debts from your own assets

If the estate is distributed before the debts of the person leaving an inheritance have been paid, each party to the estate is liable for the deceased person's debts in proportion to their share of the estate. However, the amount they then must pay to creditors will not be higher than the amount they received from the estate.

For this reason, it is important to ensure that all the deceased person’s unpaid taxes are known to the parties to the estate and that the taxes are paid before the estate is distributed.

If the estate's affairs are not settled, the creditors of the person leaving an inheritance may claim compensation.

Please note that every party to the estate is personally liable for paying the inheritance tax imposed on them.