Detailed answer

When someone dies in Montana and their estate enters probate, the estate’s assets and debts remain in a legal process until the personal representative (also called an executor or administrator) settles the estate. That process determines who pays ongoing obligations such as mortgage payments and utility bills, and who ultimately gets the property. Below are the key rules and practical effects under Montana law.

Who is legally responsible while the estate is in probate?

• Estate-level responsibility: The personal representative is charged with preserving estate assets and paying valid debts and expenses from estate funds. The Montana probate statutes (Title 72) set out the duties and powers of the personal representative to collect assets, pay claims, and administer the estate. See the Montana Code, Title 72 (Probate and Trusts) for the governing rules: Montana Code Annotated — Title 72 (Probate).
• Mortgage lender’s rights: A mortgage is an encumbrance secured by the real property, and the mortgagee (lender) retains the right to demand payments and initiate foreclosure if payments stop. Probate does not eliminate or pause the lender’s contractual rights; unpaid mortgage payments can still lead to foreclosure under applicable law.
• Heirs and devisees: If an heir or beneficiary receives the real property through probate, they take it subject to the mortgage. That means they will be responsible for future mortgage payments (or for arranging refinance or sale) unless the estate pays the mortgage before distribution.

Practical outcomes for mortgage payments

• If the estate has cash or liquid assets, the personal representative may use estate funds to keep the mortgage current to preserve the property for creditors, taxes, and beneficiaries.
• If the estate lacks funds to make mortgage payments, the lender can seek payment from the borrower’s estate or foreclose on the property according to Montana foreclosure law. Beneficiaries who inherit the property will inherit it subject to that mortgage and any foreclosure risk.
• Some lenders will agree to a temporary payment plan, loan modification, or forbearance when notified that the borrower has died. The personal representative should contact mortgage servicer promptly to explain the probate process and avoid unnecessary foreclosure.

Practical outcomes for utilities

• Utilities (electric, gas, water, sewer, phone, internet) are typically contract accounts in the decedent’s name. Utility companies can disconnect service for nonpayment unless the personal representative or another responsible party arranges continuation.
• The personal representative can use estate funds to pay utilities that are necessary to maintain and preserve estate property (for example, heat, electricity, or water to prevent damage). If the estate pays these expenses, they are normally considered administration costs.
• If the property will be vacant for an extended period, utilities may be shut off to avoid charges. New owners or the personal representative must establish new accounts or transfer service when appropriate.

Priority and payment order

Montana probate law lays out how claims and expenses are handled and prioritized. Costs of administration (including necessary expenses to preserve estate property) and secured creditor claims (mortgages) are paid according to statutory order and the estate’s resources. See Montana Code, Title 72 for the statutory framework: https://leg.mt.gov/bills/mca/title_72/.

Common steps a personal representative should take

1. Locate the mortgage and utility account information and review account balances and billing cycles.
2. Open an estate bank account to segregate estate funds from personal funds.
3. Notify the mortgage servicer and utility companies of the death and the personal representative’s contact information. Ask about temporary protections, forbearance, or account transfer procedures.
4. Assess estate liquidity. If funds exist, make mortgage and necessary utility payments to protect property value. If funds are insufficient, discuss options with the lender (forbearance, short sale, or allowing foreclosure) and with potential heirs.
5. Keep detailed records of all payments and communications. Documentation helps justify expenditures as proper estate administration costs.

Helpful hints

• Contact mortgage servicers quickly. Lenders are more likely to offer short-term relief if they know probate is underway and a personal representative is involved.
• Review the decedent’s financial records for insurance, escrow accounts, or automatic mortgage escrow that may cover taxes and insurance even if mortgage principal payments pause.
• Keep property insured. Insurance lapse can reduce estate value and complicate administration. Insurance premiums are typically an estate expense.
• Consider whether selling the property quickly would cover the mortgage and costs. A sale during probate can require court approval in some cases—consult an attorney if unsure.
• Do not distribute real property or finalize distributions to beneficiaries until all valid creditor claims and administration expenses are resolved or properly provided for.
• If you are a beneficiary, know that inheriting real estate usually means taking it subject to liens like mortgages, unless the estate pays them off first.
• When in doubt, consult a Montana probate attorney. Probate rules and priorities can be nuanced and vary by case.

Where to read the law

Montana’s probate statutes and detailed rules for administration and creditor claims appear in the Montana Code Annotated, Title 72 (Probate and Trusts). For the statutory text and chapter organization visit: https://leg.mt.gov/bills/mca/title_72/.