Indiana: Why an Inherited House May Not Be a Probate Asset and Whether You Can Make Mortgage Payments to Avoid Foreclosure | Indiana Probate

Is an inherited house always a probate asset, and can you make mortgage payments to avoid foreclosure in Indiana?

Short answer

Not always. Under Indiana law, some houses pass outside of probate (for example, because of joint ownership with rights of survivorship, a living trust, or a transfer-on-death/beneficiary arrangement). Even when a house bypasses probate, the mortgage remains a lien on the property and the lender can still pursue foreclosure if payments stop. You can often make mortgage payments yourself to help prevent foreclosure, but your rights and the lender’s response depend on whether title already passed to you and on the loan terms.

How property passes at death in Indiana (probate vs. nonprobate)

In Indiana, whether real estate becomes a probate asset depends on how title or ownership was structured before the owner died. Key nonprobate paths include:

Joint ownership with right of survivorship — when the decedent jointly owned the house with someone else who automatically becomes sole owner at death.
Living trust — if the home was owned by a revocable trust, the trust terms control the transfer and the property usually avoids probate.
Transfer-on-death or beneficiary deed — some states allow deeds that name a beneficiary who gets title at death without probate.
Other designated beneficiaries — payable-on-death accounts, life insurance, and retirement plans have designated beneficiaries and bypass probate.

By contrast, if the decedent held title solely in their name and there was no trust or beneficiary or survivorship arrangement, the house is typically a probate asset and must be administered through probate under Indiana’s probate laws. For an overview of Indiana probate law, see Indiana Code Title 29 (Probate) and for real property rules see Indiana Code Title 32 (Real Property): https://iga.in.gov/laws/2023/ic/titles/29 and https://iga.in.gov/laws/2023/ic/titles/32

Why a house that seems “inherited” might not be a probate asset

Common reasons a house does not go through probate:

It was owned jointly and the surviving owner automatically took title at death.
The decedent placed the house in a living trust and the successor trustee distributed it to the named beneficiary.
The decedent used a valid transfer-on-death or beneficiary deed that moves title at death without probate.
The house belongs to a business entity (LLC, corporation) or was held in some other nonprobate vehicle.

If title already transferred to you by one of these methods, the probate court does not control the property and an appointed personal representative (administrator) does not need to act to transfer title.

What happens to the mortgage when title passes outside probate?

Mortgages are secured by the property. Even if title passes outside probate, the mortgage lien generally remains attached to the house unless the lender releases it. That means:

If you become the new owner (for example, as a surviving joint owner or as the beneficiary under a trust or beneficiary deed), you inherit the property subject to the mortgage. You (or the estate) remain responsible for mortgage payments to avoid foreclosure.
If title did not pass to you (for example, the house is still part of the decedent’s probate estate), the personal representative normally has authority to act for the estate and handle payments. But lenders will accept payments from others if they choose to do so.
Some mortgage contracts include acceleration or “due-on-transfer” clauses. Lenders sometimes could try to enforce those clauses after a transfer of ownership, but in practice many lenders will accept payments or negotiate with a new owner. Federal law limits enforcement of these clauses in some transfers at death, but lender practices vary.

Can you make mortgage payments yourself to stop foreclosure?

Yes — often you can and it can help prevent foreclosure — but the best course depends on your legal status regarding the property:

If you are the new title owner (e.g., joint tenant, trust beneficiary, named beneficiary on a transfer deed): you have the strongest position. You can make payments, contact the lender to confirm the account and request a payment plan or loan assumption, and provide evidence of your ownership (death certificate, recorded deed, trust documents).
If you are an heir but title has not passed (property is still in the decedent’s name and part of the estate): you can make payments as a practical matter, and the lender may accept them, but only the personal representative has legal authority to act for the estate. If no personal representative has been appointed and foreclosure is looming, an interested person can ask the probate court to appoint a representative quickly so someone has authority to act.
If you are just a tenant or occupant with no ownership claim: you can still make payments to help preserve the property, but you should get written receipts and ideally a written agreement from the owner or the estate reflecting the arrangement. Otherwise, you risk spending money without receiving title or protection.

Practical steps to avoid foreclosure right now

Check title records. Search the county recorder/registrar to see who currently holds title.
Gather documents: death certificate, deed, mortgage statement, loan number, trust papers, and any beneficiary deed or joint-ownership documents.
Call the mortgage servicer immediately. Explain the death, confirm who holds title, and ask about payment options, forbearance, or a short-term arrangement to prevent acceleration and foreclosure.
If title has not passed and no personal representative exists, consider filing (or asking an interested person to file) for appointment of a personal representative so someone can act on behalf of the estate. Indiana’s probate process is in Title 29 of the Indiana Code: https://iga.in.gov/laws/2023/ic/titles/29
Ask the lender for information in writing. If you make payments, get written confirmation the payment was credited and how it affects the loan status.
Explore loan assumption, refinance, modification, short sale, or deed-in-lieu as alternatives to foreclosure.
Talk to a probate or real estate attorney if you’re unsure about title, your legal rights, or how to protect your interest.

When you likely need the administrator’s (personal representative’s) involvement

If the home is a probate asset (owned solely by the decedent and not in a trust or subject to a survivorship or TOD arrangement), the administrator or personal representative is the person with the legal authority to manage estate property, sell the house, or negotiate with the lender. If one has not been appointed and foreclosure is pending, Indiana probate procedure allows interested persons to seek emergency relief or prompt appointment — see Indiana Code Title 29: https://iga.in.gov/laws/2023/ic/titles/29

Helpful hints

Confirm ownership first: the county recorder’s office can show the recorded deed and whether a beneficiary deed or joint tenancy exists.
Don’t assume the lender will automatically foreclose the day after someone dies — servicers usually have procedures and will often work with you if you engage early.
Keep records of every payment, phone call, and written communication with the mortgage servicer.
If you pay without being the legal owner, get written acknowledgment that your payment was accepted and how it will be treated (credit to account, protection from foreclosure, etc.).
Act quickly. Courts and lenders move faster once a formal foreclosure notice is filed.
If funds are short, ask the lender about hardship options, forbearance, or temporary repayment plans — many servicers have hardship programs.
Consider consulting a local probate or real estate attorney to confirm title status and to help request emergency appointment of a personal representative if needed.