Detailed answer — how leftover sale proceeds are handled in Maryland when someone dies without a will
If a person dies in Maryland without a will (intestate), what happens to any leftover proceeds from the sale of their property depends on three main things: (1) how title to the property was held before death, (2) whether the sale closed before or after the death, and (3) whether a probate estate is opened and a personal representative (administrator) is appointed.
Common scenarios and what usually happens
1) Property sold before the person died
If the decedent sold the property and the sale closed before death, the proceeds belong to whoever received them at closing. If the proceeds were paid to the decedent’s bank account or to a person entitled to receive them, those funds become part of the decedent’s assets at death (unless they were transferred to someone else in a legally effective way before death). Those funds will be treated as part of the probate estate and distributed under Maryland’s intestacy rules unless title passed by some nonprobate mechanism (see below).
2) Property sold after death (sale by estate or by co-owner)
If the property was owned solely by the decedent and the estate sells it after death, the sale proceeds are estate assets. The court-appointed personal representative (administrator) must collect those proceeds, pay valid debts and expenses (including funeral costs, taxes, and creditor claims), and then distribute the remainder to heirs under Maryland’s intestacy statutes.
If the property was jointly owned with right of survivorship (for example, joint tenancy with right of survivorship), the surviving joint owner generally becomes the sole owner automatically at death, so the proceeds from any sale by the surviving joint owner are not estate assets and do not pass through probate.
3) Funds held by a title company or escrow agent at closing
If a closing or escrow occurred but the decedent died before distribution, the escrow company will typically require proof of authority to receive the funds (for example, Letters of Administration/Letters Testamentary from the probate court) before releasing proceeds. If no authority exists, escrow may hold funds until a court appoints an administrator or until all entitled recipients provide a lawful release.
Who decides who receives leftover proceeds?
In Maryland, an appointed personal representative handles collection and distribution of estate assets. If there is no will, the circuit court appoints an administrator through the probate process. The administrator follows Maryland’s intestacy laws to determine heirs and distribute the net estate. Maryland’s intestacy statutes set out the order of priority among spouse, children, parents, siblings, and more; see the Estates & Trusts Article referenced below for details.
Maryland courts provide information for people handling intestate estates: https://www.mdcourts.gov/legalhelp/wills.
Legal rules that control distribution
Key legal principles that affect leftover sale proceeds in Maryland:
- Title and nonprobate transfers: Anything that passes outside probate (joint tenancy, named beneficiary, transfer-on-death vehicle) does not become part of the probate estate.
- Probate property: Assets titled solely in the decedent’s name typically become probate assets and are distributed under intestate succession if there is no valid will.
- Administrator’s duties: The administrator must collect assets (including sale proceeds), pay debts and administration costs, and then distribute the balance to heirs according to statute.
Maryland’s statutory framework for intestate succession is in the Maryland Estates and Trusts Article; a starting reference is the code of the Maryland General Assembly: Md. Code, Estates & Trusts (intestacy provisions).
Practical outcomes you can expect
– If the sale closed before death and funds already passed to a joint owner or beneficiary-designated account, those recipients will likely keep the funds.
– If the sale closed into the decedent’s sole account or escrow paid the estate, those funds are estate property and will be collected by the personal representative for payment of debts and distribution to heirs.
– If no one has been appointed administrator, banks or escrow agents will typically hold the funds until someone obtains Letters of Administration from the probate court or until small-estate procedures apply.
If there is disagreement about entitlement to proceeds, interested parties must usually pursue a probate action or a court proceeding to resolve ownership.
Where to look in the law
Maryland’s probate and intestacy rules are statutory. For an overview of probate and intestate succession, see the Maryland Courts’ legal help pages: https://www.mdcourts.gov/legalhelp/wills. For statutory text, see the Maryland General Assembly’s code resource for the Estates & Trusts Article: https://mgaleg.maryland.gov.
Important: This explanation summarizes common results and procedures under Maryland law. Specific outcomes depend on the facts (how title was held, whether creditors exist, whether a probate estate is opened, etc.).
Disclaimer: This is general information and not legal advice. For guidance about a specific estate or funds, consult a Maryland probate attorney.
Helpful hints — steps to protect or claim leftover sale proceeds
- Do not accept or distribute funds unless you have clear legal authority (Letters of Administration or other written proof).
- Contact the escrow or title company that handled the sale. Ask whom they will pay and what documents they need to release funds.
- Obtain multiple certified copies of the death certificate to present to banks and title companies.
- Check how the property was titled (sole ownership, joint tenancy, tenants in common, transfer-on-death, etc.). That determines whether the funds are probate assets.
- If the estate is small, ask whether Maryland’s simplified/small-estate procedures apply and what paperwork you must file with the probate court.
- If no one has opened probate, consider filing for appointment as administrator (if you are an interested person) so you can collect estate assets and properly distribute them.
- Preserve records: keep closing statements, escrow instructions, bank statements, bills, and notices of creditors—administration requires careful record-keeping.
- If heirs disagree, avoid unilateral distributions; request the court’s guidance or mediate the dispute with legal counsel.
- Consult a Maryland probate attorney early—probate rules and timelines affect creditor claims and tax obligations.