I see no reason why estates of a paused character disapear, or why the characters don't receive any taxes.
If his lord doesn't want an inactive character then he can give bad marks and kick him/her.
This will also increase manageability of realms and allow people to play on an extremely low level of activity to a minimal extend.
It will also cause paused players to perhaps notify there lord before they pause(lower share so the lord doesn't kick the knight, advance for knight: a nice gold supply when he unpauses, advantage for lord: easier manageability of region and thus more income.