Handling Mortgage Payments and Utilities During Probate in Kentucky

Short answer: While an estate is in probate in Kentucky, the personal representative (executor or administrator) is generally responsible for protecting estate property. That typically means continuing mortgage payments and maintaining utilities when possible. If the estate lacks funds, the mortgage lender or utility company can take action (foreclosure, service disconnection) unless someone else steps in. This article explains how this works, practical options, and steps you can take.

Detailed answer — what the law and typical practice require

Who manages bills during probate?

When someone dies, the court appoints a personal representative to collect assets, pay debts, and administer the estate. Under Kentucky probate rules and practice, the personal representative has a duty to preserve estate assets. That duty commonly includes making reasonable decisions to avoid loss of value to property, such as keeping up mortgage payments and utilities on real property until the probate court approves a disposition.

For more information about estate administration in Kentucky, see the Kentucky legislature and court resources: Kentucky Revised Statutes (KRS) on probate administration available through the Kentucky Legislature website: https://legislature.ky.gov/Law/Pages/Statutes.aspx and guidance from the Kentucky Court of Justice: https://kycourts.gov/.

Mortgage payments — key points

• If the deceased borrower had a mortgage on real property, the mortgage remains a secured debt attached to the property. The lender retains the right to enforce the mortgage (including foreclosure) if payments are not made.
• The personal representative may use estate funds to pay mortgage payments as an ordinary expense of administration, provided there are sufficient estate funds and the payment is reasonable and necessary to preserve the asset.
• If the estate lacks cash, the lender can start foreclosure proceedings under its agreement and state law. Heirs or beneficiaries who want to keep the property typically must either continue payments, assume or refinance the loan (if the lender allows it), or buy the property from the estate.
• If the personal representative seeks to sell the property to pay creditors, the probate court must usually approve a sale and may require notice to creditors and interested persons before sale proceeds are used to satisfy the mortgage and other claims.

Utilities and property maintenance

• Keeping utilities (water, gas, electricity) on usually protects the value of the estate property. Utilities are ordinary and necessary costs of preserving estate assets and are often paid from estate funds.
• Utility companies are private providers; they can discontinue service for nonpayment. Some companies will allow account changes to the personal representative or provide a short grace period when informed of a death.
• If utilities are shut off, the property can suffer damage (frozen pipes, mold), which reduces value and complicates administration. That risk supports paying utilities while the estate is pending if funds exist or if a responsible person arranges payment.

Priority of payments and estate administration

Personal representatives must follow the order of priority for paying debts and expenses under Kentucky probate practice. Secured debts (mortgages) are paid from the secured property or by sale of the property. Administrative expenses, including necessary costs to preserve estate property, are typically given priority so the estate does not waste away before creditors and beneficiaries are paid.

If the estate cannot pay mortgage or utilities

• Lender actions: The mortgagee may begin foreclosure; state foreclosure procedures will control timelines and notice. Family members should communicate with the lender promptly to learn options such as forbearance, loan modification, assumption, reinstatement, short sale, or deed in lieu of foreclosure.
• Heirs’ decisions: Heirs may be able to step in and make payments, accept the property and its mortgage, or refuse an inheritance (disclaim) to avoid taking on debt. If an heir accepts property subject to mortgage, that person should get lender approval or refinance to avoid default.
• Sale of property: The personal representative can ask the probate court to approve a sale to pay debts. Sale proceeds normally pay the mortgage first (secured claim) and then other creditors and beneficiaries per Kentucky probate procedures.

Practical steps for a personal representative or family member

1. Locate the will and any estate planning documents to see who the personal representative is or who should serve.
2. Open communication with the mortgage servicer and utility companies. Tell them about the death, provide a death certificate copy if requested, and ask about options to avoid default or shut-off.
3. Determine whether the estate has funds (bank accounts, life insurance proceeds payable to the estate, etc.). Use those funds only for authorized estate expenses.
4. If funds are insufficient, get court guidance quickly. Ask the probate court for authority to use available assets or to sell property if needed to satisfy the mortgage or preserve value.
5. Consider interim arrangements: an heir may pay bills to protect the property and later be reimbursed by the estate if the court approves reimbursement as an estate expense.
6. Keep careful records and receipts for all payments and communications — the personal representative must account to the court and beneficiaries.

When to consult an attorney

Probate and creditor issues involve strict rules and deadlines. If you are a personal representative, an heir facing possible foreclosure, or a beneficiary uncertain about whether to accept property with debt, talk to a Kentucky probate or real estate attorney. An attorney can advise about court petitions, sale procedures, mortgage assumption/forgiveness options, and protecting personal liability.

Disclaimer: This article is educational and informational only and does not constitute legal advice. I am not a lawyer. For advice specific to your situation, consult a licensed Kentucky attorney.

Helpful Hints

• Act quickly: lenders and utilities enforce deadlines. Early communication prevents surprises.
• Keep the property insured: maintain homeowners insurance to protect estate value.
• Do not assume debt automatically transfers to heirs; acceptance of property can create obligations—get legal advice before accepting real property subject to a mortgage.
• If you pay estate expenses personally to save the property, document everything and get court approval for reimbursement where possible.
• Check whether any life insurance or payable-on-death accounts bypass probate — those funds may help cover expenses without court delay.
• Ask the probate clerk or a lawyer about short-term emergency petitions if immediate authority is needed to pay bills or sell property to prevent loss.