How to Handle Probate Real Estate Debts

When someone passes away and leaves behind real estate, they may also leave behind unpaid bills tied to the property—like a mortgage, property taxes, or utility bills. If you're the executor or a family member helping settle the estate, it’s important to know how to handle probate real estate debts the right way.

The good news? You don’t have to figure it out alone. With the right guidance and a clear plan, you can protect the estate and honor your loved one’s legacy.

Step 1: Identify All Property-Related Debts

Start by gathering mail, online statements, and any legal documents related to the property. Common probate property debts include:

• Mortgage payments

• Property taxes

• HOA dues

• Utility bills

• Insurance premiums

• Maintenance fees

Pro Tip: Make a list and track due dates to avoid late fees or service disruptions.

Step 2: Don’t Pay from Your Own Pocket

As the executor, it’s your job to pay debts from the estate, not from your personal funds. The estate’s bank account—once set up through the court—should be used to cover all property expenses.

Pro Tip: Keep copies of every receipt and payment for court and heir documentation. Transparency matters.

Step 3: Keep the Mortgage Company Informed

If there’s a mortgage, notify the lender that the owner has passed. Most lenders have a process for handling probate, and staying in touch helps avoid unnecessary complications or foreclosure.

Step 4: Sell the Property (If Needed)

In many cases, the estate’s real property is sold to cover remaining debts and distribute any leftover funds to heirs. A probate-certified real estate agent (like me) can guide you through this process while making sure everything stays compliant with court rules.

Sample Scenario: Meet Carla

Carla was named the executor of her late uncle’s estate, which included a small home with a remaining mortgage and unpaid property taxes. At first, she wasn’t sure where to start. With help from a probate attorney and a local CPRES who understood the probate process, Carla opened an estate bank account, contacted the mortgage lender, and used the estate’s funds to keep payments current. She eventually sold the home, used the proceeds to pay off remaining debts, and distributed the rest to the heirs—just as her uncle intended. Carla said the process felt overwhelming at times, but having a team that guided her step by step made all the difference.

Conclusion

Handling probate real estate debts can feel like a heavy weight—but you don’t have to carry it alone. By staying organized, using the estate’s funds wisely, and getting professional help when needed, you can move through the process with confidence and peace of mind.

If you need support navigating probate real estate, I’m here to help—compassionately, and with clarity.