Disclaimer

This is general information and not legal advice. I am not a lawyer. For personalized legal guidance about your situation, consult a Vermont probate or real estate attorney.

Detailed answer — How a house can be non‑probate under Vermont law and what that means for mortgage obligations

Two separate legal ideas control what happens to a house after an owner dies: (1) who holds legal title to the property after death (whether the property becomes part of the deceased person’s probate estate), and (2) the mortgage lien that runs with the property. Those two tracks operate independently.

Why an inherited house may not be a probate asset

Under Vermont probate law, certain methods of passing property transfer ownership automatically at death and therefore do not require the property to move through probate court. Common ways real estate passes outside probate include:

• Joint ownership with right of survivorship: If the deceased owned the house jointly with another person as joint tenants with right of survivorship, the surviving joint owner automatically becomes sole owner at death.
• Transfer‑on‑death or beneficiary designations where available: If the owner used a valid deed or other device that names a beneficiary who receives the property on death, title passes to that beneficiary outside probate.
• Property that was already held in a trust: If the house was owned by a revocable living trust, the trustee follows the trust terms and the property does not become part of probate.

When ownership passes outside probate, the house normally is not an asset of the decedent’s probate estate. For general statutory background on Vermont probate law, see Vermont Statutes, Title 14 (Probate, Trusts, and Fiduciaries): https://legislature.vermont.gov/statutes/title/14

What happens to the mortgage lien when the owner dies

A mortgage is a lien on the property. The lender’s right to payment does not disappear when the borrower dies. If the mortgage remains unpaid, the lender can pursue collection and ultimately foreclosure unless the loan is current or the lender agrees otherwise. Whether the house is in probate does not prevent a lender from enforcing its lien.

Can you make mortgage payments to avoid foreclosure without an administrator?

Short answer: usually yes — you can make voluntary mortgage payments — but your legal rights and reimbursement options depend on whether you hold title and whether the property is part of the probate estate.

If the property passed outside probate and you are the new owner

• You have authority to make payments and to communicate with the lender about loan options (forbearance, assumption, modification) because you own the property.
• If you are on title, you can also negotiate to assume the loan or refinance. The lender must approve assumptions under its loan documents and applicable law.

If the property is part of the probate estate (decedent held title in their sole name)

• The estate (through a personal representative or administrator) normally has the duty to protect estate assets and pay estate debts. If no administrator has been appointed yet, the lender can still seek payment or foreclosure for missed payments.
• Heirs or other people who are not legal titleholders can make payments to the lender to avoid foreclosure, but the legal consequences are different than if an appointed estate representative pays from estate funds. Absent an agreement, a person who pays from their own funds may not automatically get reimbursement from the estate or an ownership stake in the property.
• To protect yourself, get any payment arrangement in writing. If you plan to pay the mortgage and seek reimbursement or expect to acquire title later, have the estate representative sign a written agreement or get a court order clarifying reimbursement and any claim against the estate.

Practical steps to protect the property and yourself

1. Check title and ownership documents. Confirm whether you are on title, the property is in a trust, or a beneficiary deed applies. Title matters more than family assumptions.
2. Contact the mortgage lender quickly. Tell them the owner died, provide a death certificate copy if requested, and ask for payoff figures, the current status of payments, and options (forbearance, modification, assumption, or reinstatement).
3. Document every payment and get written receipts. Use traceable payment methods (check or bank transfer) and keep records showing the property address, loan number, and purpose of the payment.
4. If the estate is open or will be opened, ask the personal representative to make payments from the estate. If one is not yet appointed, consider asking the court for an interim order or file a petition to open probate so the court can appoint a representative to protect estate assets.
5. Consider short‑term loss‑mitigation options: temporary forbearance, a repayment plan, or a modification. Lenders often prefer a permanent solution (assumption or refinance) if a new owner will keep the house.
6. Make sure you understand whether the lender will accept payments from a non‑owner without accepting liability for the loan or creating an obligation to reconvey the title.

When to involve probate or real estate counsel in Vermont

You should consult a Vermont attorney if:

• Title is unclear or multiple family members claim ownership;
• The lender threatens foreclosure and you need to negotiate quickly;
• You plan to pay mortgage payments and want written protections for reimbursement or a recorded lien against the property;
• There is no administrator and you need to open probate to protect the property or clear title for sale or refinance.

Probate and real estate laws and procedures vary by state and can be fact‑specific. For statutory background on probate processes in Vermont, see Vermont Statutes, Title 14: https://legislature.vermont.gov/statutes/title/14

Helpful hints

• Confirm ownership before you act. Ask for a copy of the deed or a title search.
• Call the lender early. Lenders often grant temporary relief when they know the borrower has died and heirs seek a solution.
• Get written confirmation of any payment arrangement. Don’t rely on oral promises.
• Keep all receipts. If you make payments from your personal funds, records are essential if you later seek reimbursement.
• If you expect to inherit (or already have) the house outside probate, record any beneficiary deed or trust paperwork so the title is clear for the lender and future sale.
• Consider a written agreement with other heirs about paying mortgage payments, sharing costs, and who will take title if the property is sold or retained.
• If the lender requires a personal representative to deal with the loan and none exists, file to open probate so an administrator can be appointed and act for the estate.
• If foreclosure is imminent, ask the lender about short timeframes for reinstatement or redemption and consult a Vermont lawyer immediately. Time is often critical in foreclosure situations.