Go on collecting the payments and give yourself time. A note in both spouses’ names passes to the survivor in many cases, but that depends on how the note was titled and on your state’s law, and nothing about it has to be sold, signed or decided this month.
Nothing has to happen yet
The payer still owes the money on the same terms, and payments can keep arriving as before. If checks are made out to both of you, ask your bank what it needs in order to accept them, and keep a simple record of each payment.
Unsolicited offers to buy the note may arrive, and they need no answer. The note will still be saleable in six months or a year, so the only clock is your own.
The wording on the note decides who owns it
Look at the top of the note, where it names who is to be paid, and at the recorded mortgage or deed of trust.
| Wording you may see | What it generally points to |
|---|---|
| “Joint tenants with right of survivorship” | The survivor commonly becomes sole owner without probate |
| “Tenants by the entirety” | A similar result, in states that recognize it for this kind of asset |
| “Tenants in common” | Your spouse’s share generally passes through their estate |
| Both names and nothing more, including “husband and wife” | State law fills the gap, and results differ |
| A trust as holder | The trust document controls |
These forms of ownership grew up around real estate, and states differ on how they apply to a note. Some states also treat property acquired during a marriage as community property, with rules of its own. Have an estate attorney read the documents and confirm who owns the note now.
Papers to gather
- Several certified copies of the death certificate
- The original note and the recorded mortgage or deed of trust
- The closing statement from the sale that created the note
- Your spouse’s will and any trust documents
- A record of payments received
If the original note is in a safe deposit box held in your spouse’s name alone, ask the bank what it requires before it will open the box.
Bringing the record up to date
Even where the note passes to you automatically, the public record still shows two owners. Correcting it generally means recording something that evidences the death. The form differs by state and county, so ask a title company or attorney what yours accepts.
Write to the payer with instructions on who to pay from now on. A servicing company, if you use one, will want the death certificate and can tell you what else it needs.
Keep it or sell it
Keeping the note is a sound choice when the payments cover real monthly needs and the payer is reliable. The income is steady, and selling means accepting a discount, the gap between the balance owed and what a buyer pays.
Selling earns its place when final expenses or debts call for a lump sum, when the payer has become unreliable, or when you would prefer to own fewer things that need watching. If your spouse did the collecting and that job is the only burden, a servicing company can take it over for a monthly fee while you stay the owner. A partial sale sits in between: a set number of upcoming payments becomes cash now and the note returns to you afterwards, which can cover one bill without giving up the later income. Our page should I sell my note or keep it gives a way to weigh the choice.
If part of the note belongs to the estate
Where your spouse’s share passes through probate, a sale of the whole note needs the executor or personal representative to sign alongside you, and if that person is you the court still has to confirm the appointment. Other heirs may have a say. Both sides of this are explained in settling an estate that holds a note and selling a note you hold with a co-owner.
A death can also change the tax position of the note, so ask a CPA before you sell.
When you are ready
Copy out the exact payee wording from the note and take it, with the recorded mortgage or deed of trust, to an estate attorney. The answer tells you whether you can act alone, or whether yours is one of the situations where an estate or a co-owner has to sign as well. If later you would like a figure to weigh against keeping the note, request a price for the note at whatever point suits you.
Related questions
Do I have to go through probate to keep receiving payments?
It depends on how the note was titled and on your state. Where the note carried a right of survivorship, probate is often not needed for the note itself. An estate attorney can confirm this from the documents.
Should I tell the payer that my spouse has died?
Yes, in writing, with clear instructions on who to pay and where. It avoids checks made out to someone who cannot endorse them and keeps the payment record clean.
Is there a deadline for deciding whether to sell?
No. The note will still be saleable next year. The only time pressure comes from your own cash needs or a payer who is slipping, and unsolicited offers do not create a deadline.