My spouse’s parents owe $60,000 in overdue taxes and there’s a lien on their house. They want us to pay it so they can sell and repay us. Is that wise?

Baby Boomers are often viewed as financially comfortable, but that is not always the case.

According to Experian, Boomers carried average debt balances of $92,619 in 2025, and many are approaching retirement with far more debt than earlier generations did. In fact, about 10% of Boomers born during the peak Baby Boom years had negative net worth in their 50s, something that was much less common among the Silent Generation.

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That kind of debt can create serious problems for Boomers and the relatives trying to help them. For instance, imagine Hank and Mindy, both in their 60s, who want to sell their home but have a $60,000 tax lien attached to the property. They ask their son Max and his wife Clara to pay the back taxes, promising to reimburse them from the sale proceeds.

Clara is uneasy about the arrangement, and she has good reason to be. Before Clara and Max agree to help, they need to understand the risks involved.

Paying off someone else’s tax lien may be a bad idea

Although Max wants to help his parents, Clara is right to be cautious.

The fact that Hank and Mindy have a tax lien on their property is itself a warning sign. According to the IRS, a lien is placed on property only when a debt has gone unpaid.

Usually, homeowners have several ways to avoid a lien, including paying tax bills on time, arranging an IRS payment plan, or using programs designed for seniors who struggle to afford property taxes. Letting the situation reach this point suggests Hank and Mindy may not be financially secure.

The risk for Max and Clara is that they could pay the debt, only for Hank and Mindy to change course and remain in the home without repaying them in full. Another possibility is that the parents could keep the sale proceeds without returning the borrowed money.

There may also be other debts tied to the property, all of which would need to be cleared when the house is sold. “Just because the tax lien is paid off doesn’t mean there aren’t other liens, mortgages, or judgments against the property,” Nick Panize, president of Westgate Capital Ventures, told Moneywise.

If the home is worth less than the total debts attached to it, even after the tax issue is resolved, Hank and Mindy still may not have enough money to repay the $60,000.

Are there other options besides paying the lien for them?

If Max and Clara decide not to hand over $60,000, they can still support his parents in other ways. One option is to help them look into tax relief, though whether that is available depends on the type of back taxes owed.

“The IRS does negotiate its liens, through penalty relief or an offer in compromise,” Achim von Bodman, CFP and senior tax manager at Watter CPA, told Moneywise. But if the debt involves property taxes rather than a HOA or home equity loan lien, it is usually much harder to negotiate a payment plan or reduce the amount owed.

“Property taxes are generally harder to negotiate than other types of debt,” Panize said. “You may be able to work out a payment plan or get certain penalties waived, but don’t assume they’ll discount the actual taxes owed.”

Michael Oliver, a broker and owner of Oliver Realty, said the same applies in many cases. “Counties don’t take offers. Where negotiation does exist is with private lienholders. HOAs and judgment creditors sometimes settle for less”

There is, however, some good news: Hank and Mindy may not need to pay the debt in full before closing if they want to sell their home, as long as they have enough equity to cover the extra $60,000.

In that case, they could still sell the house without help from Max and Clara, provided the sale brings in at least $60,000 more than what they owe on the mortgage and any other debts so the proceeds can cover the lien.

Before moving forward, though, they may want to explore different payment options and figure out which one best fits their situation. They may also want to make a plan to avoid taking on more debt in retirement. If they are open to advice, Max and Clara may be able to help with that process.