As long as the taxing authority hasn't foreclosed the lien and sold the house to cover the taxes, I think that it's entirely possible that your niece could pay all the back taxes to redeem the property.
However, you wrote that your brother's name was still associated with the property and held in trust by the taxing authority.
My guess is that, once your niece pays all of the back taxes, the taxing authority will release the property back to your brother's estate and the property will have to be probated so that your niece can have property ownership.
I know it has passed to the assessors office and in the records says that they are the trustee of the property. Would they be, "the state"?
More likely the county where the property is located as Nevada property taxes are handled by each county.
Your niece (or you, if you like) can call the county tax office for details on what needs to be done to reclaim the property.
Keep in mind, however, that if the taxes cost more than the property is worth, it might be a better idea to just let it go.
As for the life insurance, what happened to it? It would not be part of the estate and not subject to probate. If your niece was (is) the beneficiary on the policy all she needed to do was file a claim with the insurance company and submit the death certificate.
As for your last question about the taxing authority's responsibility, they have none. Tax laws typically impose all the responsibility on the taxpayer.
Come back if you have any more questions. I promise no snobbery from me.
