Overview
This article explains what typically happens to mortgage payments and utility accounts while a decedent’s estate is going through probate in Hawaii. It is written for people with no legal background and uses plain language. This is general information only and not legal advice. Consult a licensed Hawaii attorney about your specific situation.
Detailed answer: who is responsible and what usually happens
When someone dies and their property goes into probate in Hawaii, a court-appointed personal representative (sometimes called an executor or administrator) steps in to manage the estate. The personal representative’s job includes protecting estate assets (including real property), paying authorized debts and ongoing expenses, and distributing remaining assets according to the will or Hawaii law.
Two frequent and urgent categories of ongoing expenses are:
- Mortgage payments: A mortgage is a secured debt attached to the property. The lender’s right to the property does not automatically disappear when the borrower dies. If mortgage payments stop, the lender can pursue foreclosure against the property. The estate or the person who inherits the property must continue payments or make other arrangements (loan assumption, modification, sale, or payoff) to avoid foreclosure.
- Utilities and property maintenance: Utilities, insurance, property taxes and routine upkeep are estate expenses the personal representative normally must pay to preserve the property. Letting utility service lapse, cancelling insurance, or failing to maintain the property can reduce the value of the estate and expose the estate to liability (for example, for damage or code violations).
How payments actually get made:
- From estate funds: If the estate has cash or liquid assets, the personal representative uses estate funds to pay mortgage installments, utilities, insurance, property taxes and other necessary expenses. The representative should keep careful records and use a separate estate bank account for payments.
- If funds are insufficient: If the estate lacks money, the personal representative has several options: obtain court approval to sell the property to pay debts; seek a short-term loan or lender forbearance; ask heirs to pay or assume the mortgage; or, if appropriate, arrange a short sale or deed-in-lieu with the lender. Heirs who accept property subject to an outstanding mortgage generally take it free of automatic personal liability from the decedent’s death unless they personally assume the loan; but the mortgage lien remains on the property.
- Temporary arrangements with lenders and utilities: Lenders and utility companies often accept notice of the death and proof of the representative’s authority (letters testamentary or letters of administration) and will work with the personal representative on payment options. Contact them early to learn account status, obtain payoff figures, and avoid foreclosure or shutoffs.
Practical consequences for heirs and residents of the property:
- If an heir intends to keep the house, they will typically need to refinance, assume the existing mortgage (if the lender allows), or pay it off.
- If the property must be sold to pay debts, sale proceeds first cover valid claims and secured debts (including the mortgage), then expenses, then distributions to heirs as allowed by probate.
- If no one pays the mortgage and the estate cannot cover it, hardship for heirs and a likely foreclosure can follow. The court will prioritize secured creditors when estate funds are available.
Where to find Hawaii-specific procedure and guidance
Hawaii’s courts provide practical probate information and forms for personal representatives on the Hawaii Judiciary website: Hawaii Judiciary — Probate Self-Help. For the text of Hawaii’s laws and statutes, see the Hawaii Revised Statutes online: Hawaii Revised Statutes (Online). These resources explain court procedures, filing requirements, and duties of a personal representative.
Common scenarios and recommended immediate steps
Typical scenarios and what you should do right away:
- If you are the named personal representative:
- Obtain certified copies of the death certificate and file for appointment with the probate court.
- Open an estate bank account and keep records of all estate money in and out.
- Contact the mortgage lender, utility providers, and insurance company. Provide your letters of appointment when you receive them.
- Prioritize payments that preserve estate value: mortgage, insurance, property taxes, utilities and essential maintenance.
- If estate funds are insufficient, consult an attorney about seeking court authority to sell or otherwise resolve secured debts.
- If you are an heir or family member living in the property:
- Do not stop paying mortgage or utilities in hope the estate will cover them — coordinate with the personal representative.
- If you plan to keep the home, talk early with the lender about assumption or refinancing options.
- Ask the personal representative for copies of account statements and for a plan to avoid foreclosure or shutoff.
When a court can get involved
If creditors dispute payments or claims, or if the personal representative lacks authority to take a necessary action (for example, to sell real property), the personal representative can seek court approval through the probate proceedings. The court can authorize the sale of property, payment of claims, or distribution plans when necessary to pay secured debts and preserve estate assets.
Helpful hints
- Act quickly: notify lenders, utilities and insurance carriers as soon as you are appointed or as soon as the death is known.
- Keep an estate checking account and detailed records of all payments made on behalf of the estate.
- Maintain insurance and necessary utilities to protect the property’s value and avoid liability.
- Ask the lender if temporary relief, modification or forbearance is available while probate proceeds.
- Do not mix estate funds with personal funds; improper handling can create personal liability for the personal representative.
- If the estate lacks funds to pay secured debts, consult an attorney about selling the property or obtaining court authority for other remedies.
- Consider getting legal help early — probate rules and creditor priority can be complex, and a probate attorney can prevent costly mistakes.
Final note / disclaimer: This information is educational and general. It is not legal advice. For advice about a specific estate in Hawaii, contact a licensed attorney who practices probate law in Hawaii.