Detailed Answer — Where will the sale proceeds from my dad’s house go?

Short answer: It depends on who legally owned the house and whether the house is being sold as part of your dad’s estate in probate, sold by a surviving joint owner, or passed outside probate via a beneficiary designation or transfer-on-death instrument. To know exactly where the money will go, you need to determine (1) title/ownership, (2) any mortgages or liens, (3) whether there is a probate estate and who is the personal representative, and (4) whether any statutory allowances, creditor claims, or taxes must be paid first.

This is educational information only and not legal advice.

Step-by-step checklist to find out exactly where proceeds will go

1. Get the deed and check ownership. The starting point is the deed recorded at the county Register of Deeds. The deed shows how title is held: sole ownership, joint tenancy (with right of survivorship), tenancy by the entirety (for spouses), or in the name of the trust. If the house was held with right of survivorship (joint tenancy or tenancy by the entirety), the property generally passes automatically to the surviving owner and sale proceeds go to that surviving owner. If held solely in your dad’s name, the house will usually become part of his probate estate (unless a beneficiary deed or trust controls).
2. Check for a transfer-on-death or beneficiary deed and trust documents. Some owners use a transfer-on-death deed or put the house in a living trust. These instruments can transfer the property outside probate to the named beneficiary or trust. If one exists, the sale proceeds may go directly to the beneficiary or to the trust. You can find a transfer-on-death deed in the county deed records or in estate planning documents.
3. Look up mortgages, liens, and unpaid property taxes. Any outstanding mortgage, home equity loan, or recorded lien must typically be paid from sale proceeds at closing. The county Register of Deeds and county clerk records let you see recorded liens; a title company or an attorney can run a full lien search and provide a payoff figure. Unpaid property taxes and special assessments are usually paid from sale proceeds as well.
4. If the house is part of probate, find the probate case and the personal representative. When a deceased person owned the house solely (and no beneficiary deed or trust applies), the house usually goes through probate. The personal representative (sometimes called an executor or administrator) is authorized by probate court to collect assets and sell property if necessary. Probate court filings (the petition for probate, letters of authority, and court orders) will show who has authority to sell and how proceeds must be handled. In Michigan, probate processes and rules are in the Estates and Protected Individuals Code (MCL Chapter 700). See the Michigan Courts probate information page: https://courts.michigan.gov/Administration/SCAO/OfficesPrograms/Probate/Pages/default.aspx and the Estates and Protected Individuals Code at the Michigan Legislature: https://www.legislature.mi.gov/(mileg.aspx?page=GetObject&objectName=mcl-700-1101).
5. Confirm creditor claims, administrative expenses, and statutory allowances. If sale proceeds flow into the estate, the personal representative must pay valid creditor claims, funeral expenses, probate costs, attorney and personal representative fees, and any statutory allowances (for example homestead or family allowances) before distributing remaining funds to beneficiaries or heirs. That means distributions to beneficiaries can be delayed until liens and claims are resolved.
6. Obtain a title report or hire a title company/real estate attorney. The clearest way to know exactly how a closing will allocate proceeds is through a title company or closing agent. They prepare a payoff ledger showing mortgage payoff amounts, tax proration, recorded liens, closing costs, real estate commission, and net proceeds. If the sale is part of probate, the closing must be consistent with any probate court order authorizing the sale.

Common scenarios (hypotheticals) and where the money goes

1) House held as joint tenancy or tenancy by the entirety

If your dad and a spouse or another person held title with right of survivorship, the property typically passed automatically to the surviving joint owner(s). When the house is sold, the net proceeds go to the surviving owner(s) (subject to mortgage payoff and liens). The sale usually does not flow through probate.

2) House owned solely by your dad with a will (probate required)

The house is estate property. The personal representative (appointed by probate court) may sell it. The sale proceeds are payable to the estate and must be used to pay mortgages, liens, valid creditor claims, funeral expenses, court costs, personal representative and attorney fees, and any statutory allowances. After payment of these obligations, the remaining funds are distributed under the will.

3) House has a beneficiary/transfer-on-death deed or is in a trust

If a beneficiary deed or a living trust controls the house, the property may pass directly to the named beneficiary or trust without probate. The beneficiary or trustee receives proceeds upon sale, subject to any recorded liens or mortgages.

4) No will (intestate)

If there is no will and the house is estate property, the probate court appoints an administrator and Michigan intestate succession rules determine heirs. The administrator sells (if necessary), pays debts and expenses, and then distributes net proceeds to heirs according to state law.

What documents and records to request (practical steps)

• Copy of the recorded deed (county Register of Deeds).
• Mortgage payoff statements from the lender(s) and a title/lien search.
• Any will, trust documents, beneficiary deed, or trust beneficiary list.
• Probate court filings (petition for probate, letters of authority, order authorizing sale, inventory, and accounting). Check the local probate court clerk or online docket.
• A preliminary title report or closing settlement statement (HUD-1/Closing Disclosure) that shows exactly how proceeds will be applied.

How to get the information if you don’t have documents

• Search the county Register of Deeds online or visit in person for recorded deeds and liens.
• Contact the local probate court clerk to ask whether a probate case has been opened and how to view filings.
• Ask the lender (if you know who it is) for payoff information.
• Hire a title company to run a full title and lien search and prepare a preliminary payoff sheet.
• Consider hiring a probate or real estate attorney to request records from the personal representative or to file a petition in probate court if distribution or accounting is unclear.

When you can demand an accounting or distribution

If funds have been received by a personal representative, beneficiaries and heirs have rights to information. The personal representative has fiduciary duties and generally must keep clear records and provide an accounting to beneficiaries and the court. If you are a beneficiary or heir and the personal representative refuses to provide necessary accounting or you suspect misallocation, you can ask the probate court to compel an accounting or to remove a personal representative. Michigan probate rules and the Estates and Protected Individuals Code govern these duties. See the Michigan Legislature’s EPIC chapter for the statutory framework: https://www.legislature.mi.gov/(mileg.aspx?page=GetObject&objectName=mcl-700-1101) and Michigan Courts probate resources: https://courts.michigan.gov/Administration/SCAO/OfficesPrograms/Probate/Pages/default.aspx.

Helpful Hints — quick things to remember

• Start with the deed. Who is on the deed usually decides whether the proceeds go to a survivor or into the estate.
• Run a title/lien search before you accept a payoff figure. Recorded liens (tax liens, judgment liens, HELOCs) often take priority and must be paid at closing.
• If the home is in probate, ask for the probate case number and copies of the petition, letters of authority, and any sale order. Those documents explain who can sell and how proceeds must be handled.
• Don’t rely on informal statements from neighbors or family — rely on recorded documents and statements from the title company or personal representative.
• If you are a named beneficiary or an heir and you suspect the proceeds are being mismanaged, consult a probate attorney. They can request an accounting or petition the court for appropriate relief.
• Michigan does not currently impose a state estate tax, but federal tax rules and capital gains consequences can affect net proceeds for heirs—consult a tax advisor if the amounts are large.

When to get help from a professional

Consider hiring a real estate attorney, probate attorney, or title company when:

• Title or ownership is unclear.
• Multiple potential heirs or beneficiaries dispute distribution.
• There are multiple liens, creditor claims, or unclear payoffs.
• The personal representative will not provide required information or is acting improperly.

A lawyer or title company can provide a written payoff breakdown and, if needed, file motions with the probate court to protect your rights.