Managing Mortgage Payments and Utilities During Probate in Michigan

Quick answer: Mortgages and utilities do not pause automatically when someone dies. The property’s mortgage remains a secured debt and utility services can be shut off if bills are not paid. In Michigan, the personal representative (executor/administrator) is responsible for protecting estate property and generally must arrange payment of necessary ongoing expenses from estate funds or the decedent’s assets to preserve value. If payments stop, the lender may pursue foreclosure and utility companies may discontinue service.

Detailed answer: what typically happens to mortgage payments

1) Mortgage stays in place. A mortgage or deed of trust secured by the real property survives the homeowner’s death. The lender retains the same remedies against the property (including foreclosure) unless and until the debt is paid, the loan is assumed by another party, or the lender agrees otherwise.

2) Who is responsible to pay while the estate is probated. The personal representative has a statutory duty to preserve estate assets and pay valid estate debts and administration expenses from estate funds when the estate has sufficient liquidity. Keeping mortgage payments current is often necessary to prevent foreclosure and to protect the estate’s value for heirs. If the estate lacks cash, the personal representative later may seek court approval to use other estate assets or sell the property to pay the mortgage.

3) Lender rights and foreclosure. If mortgage payments stop, the lender can pursue remedies permitted by the mortgage and Michigan law, which may include nonjudicial foreclosure (if the mortgage includes a power of sale) or judicial foreclosure. The personal representative should communicate promptly with the lender — lenders often offer options (forbearance, modification, or short sale) when a borrower dies — but a lender is not required to allow continued occupancy or to provide relief solely because the owner died.

Detailed answer: what typically happens to utilities

1) Utilities are separately billed. Utilities (electric, gas, water, sewer, trash, internet) are usually provided under contracts with the decedent. If bills are unpaid, companies can disconnect service under their terms. Unlike secured mortgage debt, utilities are not automatically treated as estate-secured obligations.

2) Who pays while probate is pending. Either the personal representative (using estate funds) or an heir/occupant (using their own funds) must pay to keep services on. In many cases the utility company will transfer the account into the name of an heir or the personal representative if the account holder is deceased and proof of death and authority (such as Letters of Authority) are provided.

3) Practical consequences of shutoffs. A utility shutoff can reduce property value (frozen pipes, mold, waste) and complicate sale or transfer. Maintaining basic utilities is a common administrative expense paid to preserve property condition.

How Michigan law frames the personal representative’s duties

Michigan’s probate laws (the Estates and Protected Individuals Code) set out the powers and duties of a personal representative, including duties to inventory and preserve estate property and to pay valid claims and reasonable administrative expenses. See the Estates and Protected Individuals Code (MCL 700.1101 et seq.) for the statutory framework and your local probate court for procedural details: https://www.legislature.mi.gov and general probate resources at the Michigan Courts website: https://www.courts.michigan.gov/ (search the Estates and Protected Individuals Code or your local probate court pages for forms and guidance).

Common practical scenarios and options

– Property with sufficient cash in the estate: The personal representative pays mortgage and utilities from estate funds as necessary to preserve value.

– Property occupied by a surviving spouse or heir who can pay: The occupant may pay mortgage and utilities to keep residence, but if they stop paying the lender can pursue foreclosure against the property. If the heir wants to keep the house, they may be able to refinance or assume the mortgage (subject to lender approval).

– Estate short on cash: The personal representative must evaluate options—seek court approval to borrow, sell the property quickly (often as an administration expense to pay debts), negotiate with the lender for a short sale, or allow a foreclosure if preserving the asset isn’t economically viable. Court supervision may be required for sales or borrowing.

Steps the personal representative should take immediately

1. Locate the mortgage and utility account documents, and gather recent statements.
2. Contact the lender to report the death and provide a copy of the death certificate and proof of your authority (Letters of Authority or Letters Testamentary). Ask about options (forbearance, grace period, assumption, or loss-mitigation).
3. Contact utility providers to report the death and learn what documentation they require to keep service on or to transfer accounts.
4. Secure the property physically and maintain insurance. Continued property insurance is essential.
5. Talk to the probate court or a probate attorney about estate cash flow and whether court approval is needed for proposed actions (sale, borrowing, or payments using estate funds).

Important distinctions that affect outcomes

• Secured vs. unsecured debt: Mortgages are secured by the property. Other debts may be unsecured and paid only if estate assets remain after secured claims and administration expenses.
• Homestead and survivor protections: Michigan law provides certain protections for a surviving spouse and minor children. Those protections can affect whether the property may be sold or how proceeds are divided. Check the EPIC and consult counsel about homestead allowances and spousal rights.
• Title and probate avoidance: If the property was jointly owned with right of survivorship, or held in a trust, it may pass outside probate and the surviving owner or trustee typically becomes responsible for payments immediately.

When to consult a probate attorney

Get legal advice if the estate lacks cash to keep the mortgage current, if foreclosure is threatened, if heirs dispute who will pay, or if you need to sell or borrow against the property. A probate attorney can explain statutory duties and court procedures, and can represent the personal representative in court when necessary.

Helpful Hints

• Act quickly. Communicating with the lender and utilities right away can prevent foreclosure and shutoff.
• Preserve records. Keep copies of all communications, invoices, and payments related to mortgage and utilities.
• Use estate funds only with authority. Don’t spend estate money until you have authority from the probate court (or the will) to do so—unless it is a reasonable emergency expense to preserve property.
• Check for automatic relief programs. Some lenders and utilities have policies for decedents’ accounts—ask what documentation they need and whether short-term relief is available.
• Consider temporary cash solutions. Heirs sometimes advance funds to pay bills to avoid foreclosure, but do so only after clear written agreement about repayment or credit against inheritance.
• Understand timelines. Probate and creditor claim deadlines vary; consult your local probate court or an attorney to learn specific deadlines that affect estate administration.
• Protect the property from damage. Even short utility interruptions (heat in winter) can cause expensive harm that reduces estate value.