FAQ: How to determine where the proceeds from a deceased family member’s house sale will go

Quick overview: When a house owned by a deceased person is sold, who actually receives the money depends on how the property was owned, whether there is a will or trust, any mortgages or liens, and whether a court-supervised probate or a non-probate transfer applies. Below is a step‑by‑step guide to find the exact destination of the sale proceeds under Tennessee law and practical tips for getting the information you need.

Detailed Answer

1) Identify how title to the property was held

The first and most important step is to determine how the deceased owned the house. Common possibilities:

• Sole ownership (in the decedent’s name only) — usually the house becomes part of the decedent’s estate and passes through probate unless another transfer mechanism applies.
• Joint tenancy with right of survivorship or tenancy by the entirety — ownership typically passes directly to the surviving co‑owner by operation of law, outside probate.
• Held in a living trust — the successor trustee distributes trust property per the trust terms without probate.
• Transfer-on-death deeds or beneficiary deed (if available in the county) — the designated beneficiary gets title at death without probate.

How to check: pull the deed at the county Register of Deeds (the deed will show names and the form of ownership). Most county Register of Deeds offices have online search or will help you in person.

2) If the property is part of a probate estate

When the house is in the decedent’s name alone and no nonprobate device applies, it generally goes through probate. The personal representative (also called executor or administrator) handles sale or transfer under the court’s direction and Tennessee probate law.

Key points:

• The personal representative must pay valid estate debts and costs before distributing net proceeds to heirs or beneficiaries. Typical priority items include funeral expenses, administration expenses, taxes, and creditor claims.
• The probate case file (available at the county probate court) contains the petition, orders, inventory, sale approval (if court approval was required), and final accounting showing how sale proceeds were allocated.
• Beneficiaries and heirs have the right to ask the personal representative or the court for an accounting of receipts and disbursements from the sale.

For general Tennessee probate information and forms, see the Tennessee Administrative Office of the Courts: https://www.tncourts.gov/programs/self-help/estate-administration

3) If the property passed outside probate (joint owner, trust, beneficiary deed)

If title passed automatically to a surviving joint owner or to a trust beneficiary, the sale proceeds belong to that owner or to the trust (and then to the beneficiaries under the trust). In those cases, the transaction is usually handled by the closing agent or trustee, and a closing statement (settlement statement or Closing Disclosure) will show payoffs and net proceeds and to whom the net funds were disbursed.

4) Check for mortgages, liens, taxes, and other encumbrances

Sale proceeds first satisfy secured debts (like mortgages), recorded liens, and valid claims against the estate. The title search that a title company performs before closing will reveal liens and their priority. The closing agent (title company or attorney handling closing) prepares a settlement statement showing payoffs to lenders, lienholders, county taxes, closing costs, and the net amount delivered to the seller or estate.

Practical note: ask the closing agent for the final closing statement (often called a Closing Disclosure or HUD‑1). That document lists exactly where each dollar went at closing.

5) Where to get the records and who to ask

• County Register of Deeds: view the deed and recorded instruments to establish ownership and recorded liens.
• County Probate Court: request the probate case file (petitions, letters of administration, inventories, sale approvals, accountings).
• Title company or closing agent: request the settlement statement showing payoffs and distributions from the sale.
• Personal representative or trustee: request a written accounting and copies of closing documents and bank records showing distribution of proceeds.
• Lenders or lienholders: contact mortgage servicers named on the title search to confirm payoff amounts.

6) If you don’t get a satisfactory answer

If the personal representative or trustee will not provide records or the accounting seems incorrect, Tennessee law gives beneficiaries and heirs several remedies:

• Request a formal accounting in the probate court file. If the accounting is insufficient, you may file objections in probate court and ask the judge to review the distributions.
• File a petition in probate court to compel the personal representative to produce records, to surcharge (recover losses from) the representative for mismanagement, or to remove a representative for cause.

For information on fiduciary duties and court supervision of estate administration, consult Tennessee Code Annotated (see Title 30, which governs wills, probate, and fiduciaries) and the Tennessee courts’ probate self‑help pages: https://www.tncourts.gov/programs/self-help/estate-administration. You can search Tennessee statutes at the Tennessee General Assembly site: https://www.capitol.tn.gov/.

7) Typical timeline and documents to collect

• Certified copy of the death certificate.
• Recorded deed(s) showing current ownership.
• Will or trust documents, if any.
• Letters testamentary or letters of administration (issued by probate court) identifying the personal representative.
• Title report and closing (settlement) statement showing payoffs and net proceeds.
• Inventory and final accounting filed in probate court (if the estate is probated).

Helpful Hints

• Start with title: a deed search at the county Register of Deeds usually answers whether the house was probate property.
• Ask for the closing statement early. The settlement statement shows all payoffs and final distributions from the sale.
• Obtain the probate court case number (if any). With that number you can pull filings that show the estate’s receipts and disbursements.
• If the estate is small and assets can transfer outside formal probate, there may be simpler processes (small estate affidavits). The county probate clerk can tell you if that applies.
• Document all requests in writing (email or certified mail) so you have a record if you later need to seek court relief.
• If you suspect mismanagement or unexplained distributions, consult a Tennessee probate attorney promptly. Courts set deadlines for creditor claims and for challenging distributions.
• When in doubt, a title company can provide a current payoff and lien report and a copy of the title commitment that lists recorded interests affecting proceeds.
• Be aware of deadlines: creditors typically have limited time to present claims against an estate. The probate court or an attorney can explain these deadlines under Tennessee law.

Where to get official Tennessee information:

• Tennessee Administrative Office of the Courts — estate administration (probate) self-help: https://www.tncourts.gov/programs/self-help/estate-administration
• Tennessee General Assembly — Tennessee Code (search Title 30 and related probate statutes): https://www.capitol.tn.gov/
• Consumer Financial Protection Bureau — about the Closing Disclosure and settlement statements: https://www.consumerfinance.gov/owning-a-home/closing-disclosure/

Disclaimer: This article explains general Tennessee law and common practice. It is educational only and not legal advice. For advice about a specific situation, consult a licensed Tennessee attorney or the probate court in the county where the property is located.