Is your state judicial or non judicial?

Because it complicates things when one tenant is reporting to you and another to me.

Is the IRS likely to spend the resources to audit this sort of complicated situation when there is no tax they can collect?

I advise you to simplify, not complicate. 

The choice on this to me seem to involve litigator behavior in each individual state as well as down to property local judicial behavior, and what is standard operating procedure (which could change over time for the better or worse).To me a blanket statement of "full faith and credit" seems like yes you can go the moon, without filling in the blanks of you need to have rocket and will have to pay for a rocket....So basically, business wise (from a cost stand point and risk stand point) to make "full faith and credit" happen is this a wise choice?

It may get a little complicated if you do a refi and distribute the proceeds from the partnership, which is called a "debt financed distribution" in the tax world.That should give you a starting point...

IE far more complicated than west coast states and some deep south states.I can see the folks at the sale not being friendly in a BP type of way..

@Brett BennettBoth options seem good to me and not too complicated.

We met one day and got a complicated offer submitted the next.

Forgery is a covered item.. although you would not have standing.We work on these types of deals.. you have to FORCE probate.. expensive and complicated.. working one right now.I would Buy Rick the Probate guys course.. he no longer participates on BP but he is an expert in these deals you learn how to work these and they can be a gold mine.But you have to be willing to risk some serious legal fees up front the one I am working on currently I will probably be in it 30k with no guarantee of success but if I do succeed.. well you can figure out the upside.