Question: My mother passed away without a Will. She has a house with a mortgage, and her only heirs are my brother and me. What should happen next?
Loraine’s Answer: In this situation, it’s important that someone continues to make the mortgage payments on the house until her estate is opened. That person can be reimbursed for the house payments once the estate is opened for the estate administration process.
Since your mother had no Will and there is a mortgage, you will likely need to start by filing a Petition for Letters of Administration with the jurisdiction where she had her primary residence. As part of that Petition, you will need to choose an Administrator, which could be either you, your brother, both of you, or a third party.
The Administrator, once appointed, will be able to coordinate what happens to the home:
- If you and your brother as heirs want to keep it, the Administrator will need to transfer the title to both of you using an Administrator’s deed. The property will remain subject to the mortgage until it is paid in full. The mortgage company may require you to pay off the mortgage unless you and your brother can both qualify to assume it and the mortgage company is willing to allow you to assume it. If you have to pay off the mortgage and one or both of the heirs wants to keep the house, then the person(s) who want to keep the house will need to either refinance the mortgage or find assets elsewhere to pay it off.
- If you both want to sell the house, the Administrator can either sell it directly from the estate or transfer it to the heirs so the heirs can sell it.
- If one heir wants to keep the house and the other wants to sell, you will need to work that out between you. The Administrator can do whatever is needed to facilitate an arrangement, as long as both heirs are in agreement If you can’t agree, however, the Administrator needs to ensure that he follows the law. The Administrator can’t just make whatever distribution he wishes.
If you and your brother are the only heirs, if this is a Georgia estate, and if both of you are adults and willing to consent, you may want to request as part of the Petition for Letters of Administration that the Administrator have bond, inventory, and reports waived and “certain powers” granted. Doing so will simplify the estate administration and save time and money in the long run.
This is not a complete list of what the Administrator will need to do. Anyone who intends to become the Administrator should hire an experienced probate attorney to assist them, as it’s not a particularly simple process and there’s a big learning curve if you haven’t handled an estate before. The Judicial Council of Georgia offers some resources that may be helpful.
Key Estate Planning Takeaways: When a person dies without a Will and there is a mortgage, it must continue to be paid. An Administrator will need to be appointed for the estate. The Administrator is appointed by the probate court, and the Administrator’s job is to pay debts, expenses, and taxes and then distribute assets, including handling what happens to the house and mortgage. It’s best to hire an experienced probate attorney for advice and assistance.
This “Q&A with Loraine” blog series is inspired by answers from Morgan + DiSalvo Partner Loraine DiSalvo to actual user questions posted by individuals on www.avvo.com. This blog is a more in-depth response than is permitted on their site. To view the original question and Loraine’s abbreviated response, click here.
