Seller Dies Before the Note Matures

Initially, my response would be to seek the advice of an attorney, because the question you are posing requires a legal opinion.  However, as a former executive of a financial institution specializing in acquiring the type of debt you describe, and as current president of a mortgage debt investment underwriting firm, I can offer a well-grounded and accurate view as a due diligence underwriter for this type of investment.

Keeping this very simple and to the point, as to the note payor (presumeably the purchaser in the purchase money note scenario you are implying exists), absent a specific clause to the contrary, the obligation in the note continues independent of the living status of the note holder (seller in the scenario). 

As to the note holder (presumeably the seller in the foregoing scenario), assuming the note has not been otherwise transferred and endorsed, the note holder’s estate will manage the disposition of the asset.  We consider the rights in the note as personal property, the right to receive funds.  Accordingly, applicable law will govern the disposition of this type of property in an estate settlement scenario.  The party overseeing the estate of the note holder, will proceed, most likely in accordance with the written directives, if any, of the note holder (i.e., last will, trust, etc.), and if none exists, the final distribution of the asset may be determined by an appropriate proceeding brought in court.

Again, because of the legal nature of your question, my best recommendation for you is to seek the advice of an attorney, and preferrably one skilled in real estate debt (as opposed to just real estate transactions).