The IRS has seized my brother's federal income tax refunds for the last three years for non-payment of back social security taxes on a business he once owned. He is currently the sole beneficary on my will. I have no spouse or children. Can the IRS seize my life insurance, home equity, 401(k), and pension benefits that I have willed to him?
2 Answers from Attorneys
The key to answering your question is to define when. Before you die, they cannot touch any of those things merely because you have willed them to him. However, after you die, once they become his, they can seize those things. The only way to avoid that would be to put anything you leave to him in a very restrictive trust. Any good estate planning attorney should be able to discuss how to set up such a trust. Also, remember that anytime you are thinking of setting up a trust, you should also speak with a financial planner about whether it will create any tax consequences for you.
No unless and until you die. It may be a good idea to change your will and redesignate a new beneficiary.
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