Understanding Reimbursement for Mortgage Payments Made to Preserve Estate Property

Short answer: Yes — under California law you can often be reimbursed for reasonable mortgage payments you made to preserve estate property, but recovery usually depends on who paid, whether the payment benefited the estate, whether the payment was authorized, and whether a court approves the reimbursement. Mortgage lenders, secured creditors, and the order of payment in probate can affect how and when reimbursement happens.

Detailed answer: how reimbursement works in California

This explanation assumes an estate under probate in California. The rules change a bit if the property passed outside probate (for example, by joint tenancy, beneficiary deed, or trust). Start from the basic rule: expenses that are necessary to preserve an estate’s assets are typically considered administration expenses and are given priority over distributions to heirs or beneficiaries. Mortgage payments made to avoid foreclosure or to preserve the value of estate real property commonly fall into that category — but procedure matters.

Who can seek reimbursement?

Personal representative (executor or administrator): The personal representative can make payments to preserve estate property and then seek allowance of those expenses from the probate court as administration expenses. The court typically allows reasonable, necessary expenses.
Beneficiary or third party: A beneficiary or any other person who pays to preserve estate property can ask to be reimbursed. That person typically must show the payment benefited the estate and either had court approval or obtain a post-payment court order allowing reimbursement.
Secured creditor (mortgagee): A mortgage lender is a secured creditor and has a claim against the property. Mortgage payments reduce the lender’s default risk but do not necessarily create a reimbursement right against the estate unless the court allows the payments as an expense or the parties agree.

How the money is recovered

There are several common routes for recovery:

Allowance as an administration expense: A personal representative can ask the probate court to treat mortgage payments as reasonable expenses of administration. Administration expenses generally get paid before distribution to heirs or beneficiaries. See the Probate Code sections that govern administration of decedents’ estates (Division 7). For the California Probate Code, see Division 7: Administration of Decedent’s Estate: https://leginfo.legislature.ca.gov/.
Court order after petition: If a beneficiary or other party made the payments without prior approval, they can petition the probate court for an order declaring the payments reimbursable and directing the personal representative to repay them from estate funds or to give a credit in distributions.
Contract or agreement with the estate or personal representative: Parties sometimes settle by written agreement, giving the payer a lien, priority, or credit against distributions. Court approval may still be needed if the estate is in probate.
Equitable lien or subrogation: A court may impose an equitable lien or recognize subrogation in favor of a person who paid the mortgage to protect the property’s value. This is a fact-specific remedy courts use to prevent unjust enrichment of other beneficiaries or creditors.

Key factors the court will consider

Whether the payments were necessary to preserve the property (for example, to prevent foreclosure, pay insurance, or avoid waste).
Whether payments were reasonable in amount and timing.
Whether the payer sought prior court approval or provided notice to interested persons (creditors and beneficiaries).
Whether the payment benefitted the estate as a whole rather than a single beneficiary.
Whether the estate has funds or assets to repay the expense and how repayment affects other creditors and heirs.

Hypothetical example

Suppose Maria is a beneficiary and pays three months of mortgage payments ($6,000) after the decedent dies to avoid immediate foreclosure while the estate is opened in probate. If Maria asked the personal representative and the court in advance, the court is likely to approve the payments as reasonable administration expenses and order the estate to reimburse Maria before distributions are made.

If Maria paid without prior notice, she can still petition the probate court after the fact. The court will weigh whether her payments were necessary, reasonable, and plainly for the estate’s benefit. If approved, the court may order the estate to reimburse Maria, give her a credit, or impose an equitable lien on the property. If the estate lacks funds or the mortgage remains outstanding, the mortgage lender’s rights may control — the lender is a secured creditor whose claim is paid out of the property’s proceeds on sale or foreclosure.

Practical effects of a mortgage on reimbursement

A mortgage is a secured claim against the property. Even if you paid mortgage installments, the lender retains its security interest and can foreclose for default unless the mortgage is brought current or otherwise resolved.
Payments you make reduce the lender’s claim only to the extent they reduce the unpaid principal, interest, penalties, and fees. Full resolution may require reinstatement, payoff, or a loan modification.
If the estate sells the property, net sale proceeds go first to pay the mortgage and other valid liens, then to pay approved administration expenses, and finally to distribute remaining funds to heirs or beneficiaries.

What you should do next (step-by-step)

Keep detailed records: Save all mortgage statements, receipts, bank records, and communication with the lender. Documentation is essential to any reimbursement petition.
Notify the personal representative and other interested persons in writing: Provide notice that you paid or plan to pay mortgage installments and explain why such payments benefit the estate.
Seek court approval before paying if possible: A short ex parte petition or a noticed petition to the probate court asking that future payments be allowed as administration expenses reduces risk that reimbursement will be denied.
If you already paid, file a petition with the probate court asking for reimbursement or for an equitable lien/credit. Explain necessity, reasonableness, and benefit to the estate.
Consider negotiating with the personal representative: A written settlement or accounting may resolve the matter without a contested court hearing.
Talk to an attorney early if the mortgage lender threatens foreclosure or if the personal representative refuses to act. An attorney can help prepare petitions, negotiate with creditors, and protect your rights.

Relevant resources and statutes

California law addresses administration of decedents’ estates in the Probate Code (Division 7). The probate court oversees allowance of administration expenses and claims. Helpful resources:

California Probate Code — Division 7 (Administration of Decedent's Estate): https://leginfo.legislature.ca.gov/
California Courts — Probate self-help information: https://www.courts.ca.gov/selfhelp-probate.htm

When reimbursement might be denied

The payments were not reasonable or were unnecessary (for example, paying more than required or paying for improvements that do not preserve value).
The payments solely benefited one beneficiary rather than the estate as a whole.
No court approval and other interested persons object to repayment because it would prejudice creditors or other beneficiaries.
The estate is insolvent and cannot pay administration expenses after secured creditors are paid from property proceeds.

Helpful Hints

Always document every payment: date, amount, account, and purpose.
Ask the probate court for instructions if the estate has potential creditor issues or if foreclosure is imminent.
Get written agreements with the personal representative when possible before making large payments.
Know the difference between secured creditor rights (mortgage) and administration expenses — secured claims are paid from property proceeds first.
Act quickly if foreclosure is threatened — short timelines can change available remedies.
Even if you are a beneficiary, treat payments to preserve estate property as formal estate matters: record them and seek court approval to protect your claim.

Disclaimer: This article explains general principles of California law and is not legal advice. It does not create an attorney-client relationship. For advice about your specific situation, consult a licensed California attorney who handles probate and estate administration.