The recent case of U.S. v. Tyler is a stark reminder that executors of an estate need to ensure the proper payment of creditors, in particular if that creditor is the IRS.
In this case, the decedent died with hundreds of thousands of accrued federal tax liabilities. Instead of liquidating the estate to pay back-taxes, the executors tried to apparently "sell-off" assets to family members at highly discounted prices in an effort to render the estate insolvent.
Not suprisingly, the court find that the executors of the estate should be personally liable for the decedent's unpaid tax liability because they had known about the liabilities and had intentionally distributed estate assets to insiders (the court essentially ignored the "sales" to family members and treated them as distributions).
