This is a sad and very sensitive topic and one I have had happen in my career more times than I care to count. In fact, currently we are waiting on probate to be ready to close the property of a married couple who didn't have rights of survivorship in their title and owned property together and she recently passed away.
So how can this lead to "trouble" on a contract or deal? If the title isn't clear with all owners being able to sign, you can't close. I always check on a potential listing and ask if all parties on title are available to sign the listing agreement. If not, you have to investigate the whys and resolve that the deed was written so anyone on title who can't sign currently there is a solution for. There are power of attorney situations, there are death certificates, there is probates.... various situations call for various solutions when someone on the previous deed isn't able to sign a listing agreement, a contract or a need deed. And property is transferred by a new deed in the state of Georgia.
So recently when I had a couple signing an offer she actually asked me... what happens if I don't live to closing. She was in hospice care, had a terminal illness and was trying to "get affairs in order" by not leaving her loved ones with rental properties to manage or sell. They had all been hers alone before her last marriage and were all in just HER name. So my advice was to discuss it with an attorney.
The attorney gave her a number of options, she decided on quit claim deed to both herself and her husband with rights of survivorship. That way if she did pass prior to closing once it was pending the husband would only need a copy of the death certificate to close.
I've also had a terminally ill seller quit claim the home to her son alone. Now many might be saying "no, then he pays more capital gains tax", but this was back in 2010 and the house was worth less than had been paid for it at the time it was to be sold, so there were no gains to pay taxes on and again, I didn't make the suggestion of what to do, I sent them the contact information of a trusted attorney and they discussed the situation and made the best choice for them.
Now when it doesn't happen....
Once upon a time, Mr. Seller and Mrs. Seller had moved to another state, will was done in another state. Probate had to be done in another state. Probate took a LONG time in other state and our buyer had to wait patiently for MONTHS for that to happen because they had not heeded our advice to seek out an attorney and get anything done in time. By the time the documents were prepared Mr. Seller was no longer able to sign anything. The widow was fortunate that the buyer had the patience that he did. Probate was vastly different in the other state and required waiting for a court date.
And death doesn't always come with an extended illness where there is time to make these changes and decisions. Any person who owns property with another should discuss it with a an attorney to make sure it's deeded in the way that is more beneficial to survivors and what they want it to be. It's fairly easy and inexpensive to change the deed. If this is something you want to look into call me and I'll give you a list of attorneys happy to discuss and guide you. 706-485-9668