Disclaimer: I am not a lawyer. This article explains general South Carolina law to help you understand how sale proceeds from a home are likely to be handled. This is educational information only and not legal advice. For a binding answer in your situation, consult a licensed South Carolina attorney or the probate court.
Detailed Answer
When a house that belonged to your dad is sold, the path that the sale proceeds take depends on who owned the property, any debts or liens against it, and whether your dad died owning the house or sold it before he died. Below is a practical checklist of ownership scenarios, the likely result in each, and the steps you can take to find out exactly where the money will go under South Carolina law.
1) Who holds title to the house?
- Owned in your dad’s name alone: The sale proceeds are his property at the time of sale. If he was alive at sale, he receives the net proceeds. If he died before distribution, the proceeds become part of his estate and must be administered through probate (or small‑estate procedures if eligible). The personal representative (executor/administrator) must use proceeds to pay debts, expenses, and then distribute under the will or by intestacy rules.
- Joint tenants with right of survivorship: The surviving joint owner(s) automatically own the property on the decedent’s death, so proceeds from a post‑death sale generally go to the surviving owner(s), not into the decedent’s estate (unless the joint deed or facts say otherwise).
- Tenancy by the entirety (spouses): If South Carolina recognizes survival rights for spouses (tenancy by the entirety), the surviving spouse typically takes ownership on death, and sale proceeds go to that spouse.
- Trust ownership: If the property was owned by a living trust, the trustee follows the trust terms. Proceeds flow to the trust and then to beneficiaries per the trust document.
- Deed restrictions or life estate: If your dad had only a life estate or there were deeded remaindermen, the life tenant or remaindermen rules determine who gets the proceeds or portions of them.
2) Liens, mortgages, and creditors
Before netting out to owners or the estate, sale proceeds pay secured debts and recorded liens that attach to the property. Common examples include:
- Mortgage payoff(s)
- Tax liens (federal or state)
- Mechanics’ liens or home‑owner association liens
- Recorded judgment liens
Title companies and closing agents typically collect payoff amounts and lien releases at closing so the owner or estate receives only the net proceeds.
3) Probate and distribution rules
If the decedent still owned the house at death and there is a sale after death, the proceeds will usually be estate assets. The personal representative is responsible for:
- Collecting sale proceeds into an estate bank account
- Paying funeral costs, administration expenses, taxes, secured creditors, and valid claims
- Making required family or homestead allowances where applicable
- Distributing the remainder according to the will or South Carolina intestacy law
South Carolina probate laws (Title 62) govern administration of estates and distribution of assets. You can review statutes and chapter headings on the South Carolina Code site: https://www.scstatehouse.gov/code/title62.php
4) How to find the exact destination of proceeds — practical steps
- Get a copy of the deed. The deed recorded at the county Register of Deeds shows current legal ownership and helps identify survivorship language.
- Request a title search or title commitment. Title companies prepare a commitment that lists mortgages, liens, and the chain of title. This will show what must be paid from proceeds at closing.
- Ask the closing agent or title company for the closing statement (HUD‑1 or ALTA settlement statement). That document shows the gross sale price, line‑by‑line payoffs (mortgage, liens, taxes), closing costs, and the net amount disbursed and to whom.
- If the property was part of an estate, request the estate accounting or filing from the personal representative. An executor must provide beneficiaries and interested parties with information about receipts and distributions. Probate court records will also show filings and orders about sale and distribution.
- Search public records for liens and judgments. Use the county Register of Deeds and county clerk/judgment records. Check the South Carolina Department of Revenue for state tax liens and the federal IRS for federal tax liens.
- Contact the lender(s). If a mortgage exists, obtain a payoff statement showing the exact amount to be paid at closing.
- Talk to the personal representative or attorney handling the sale. They should explain where proceeds will be routed and why.
5) If you don’t get clear answers or you disagree
- Ask the personal representative for a formal accounting. South Carolina law allows interested parties to petition probate court for an accounting or for instructions if the PR is not providing information.
- If the sale occurred without probate oversight and you suspect improper distribution, you can consult a probate or real estate attorney about filing a petition to recover estate assets or to challenge distributions.
- Mediation or settlement can resolve disputes without protracted litigation in many cases.
Helpful Hints
- Start with public records: deed and county lien/judgment searches are free or low cost at the county level.
- Obtain the closing statement — it is the clearest single document showing where every dollar went at the time of sale.
- If the house sold while your dad was still alive, ask for copies of the proceeds check or direct deposit records and any assignment of sale proceeds.
- Keep copies of wills, trust documents, and any written instructions your dad left about the property; these often control distribution.
- When an estate is involved, expect the process to take several months. Executors must follow notice and claims procedures before final distributions.
- If you suspect unpaid creditors or hidden liens, get a full title report — it will reveal recorded encumbrances and the order of priority.
- Get legal help sooner rather than later if the personal representative is unresponsive or if you believe funds were taken improperly. Time limits and statutes of limitation can apply.
For statutory guidance on probate and estate administration in South Carolina, see Title 62 of the South Carolina Code: https://www.scstatehouse.gov/code/title62.php
If you want, I can list the exact steps to pull public records in your county (Register of Deeds and clerk of court links) or provide a short checklist of documents to ask for from the closing agent or personal representative.