Understanding how sale proceeds from a parent’s home are allocated in Arizona
This FAQ explains, in plain language, the most common paths sale proceeds take in Arizona and the steps you can take to find out exactly where the money will go. This is educational information only and not legal advice.
Detailed answer: who gets the money and how to confirm it
Where the sale proceeds from your dad’s house go depends on the legal status of the property and the seller when the sale closes. The main factors are (1) who owns the property, (2) whether your dad is alive or deceased, (3) whether there are mortgages or liens, and (4) whether the house is part of an estate or trust. Below are the typical scenarios and steps to verify the exact distribution of proceeds in Arizona.
1) If your dad is alive and is the seller
- If your dad is the sole owner, proceeds typically first pay off closing costs and any recorded liens (mortgage(s), HOA liens, tax liens, judgment liens). The escrow or title company preparing the closing will produce a Closing Disclosure or a HUD-1-style settlement statement showing every debit and credit and the net funds to the seller.
- How to confirm: ask the escrow/title company for the final closing statement (Closing Disclosure or settlement statement). Contact the lender(s) for a payoff statement showing the amount required to satisfy the mortgage on the date of closing.
2) If your dad is deceased and the house is being sold
When the decedent owned the house in their individual name at death, the proceeds become estate property unless the property passed automatically to someone else (for example, via a survivorship deed, joint tenancy, or a trust). In Arizona, estate assets are controlled through probate or trust administration under Title 14 of the Arizona Revised Statutes. See Arizona Probate Code (Title 14): https://www.azleg.gov/arsDetail/?title=14.
- Personal representative/executor: If the house is part of a probate estate, the personal representative collects proceeds, pays estate debts and administration costs, files required accounting with the probate court, and then distributes any remaining funds to beneficiaries under the will or under Arizona intestacy rules.
- If the property is in a revocable trust and the trustee sells it, sale proceeds stay in the trust and are distributed according to the trust terms.
- How to confirm: if there is probate, the court file will show filings, inventories, and accountings. The Arizona Courts provide self-help information about probate and estate administration: https://www.azcourts.gov/self-help/Probate. You can request copies of filings from the probate clerk where the estate was opened.
3) Titles that avoid probate
Certain title arrangements may mean sale proceeds do not pass through probate:
- Joint tenancy with right of survivorship: ownership automatically passes to the surviving joint tenant(s).
- Life estate or transfer-on-death deed: the designated person may acquire the property automatically.
- Revocable living trust: the trustee handles the funds under the trust terms.
- How to confirm: check the recorded deed at the county recorder’s office to see ownership type and any transfer-on-death or survivorship language.
4) Liens, mortgages, taxes, and other encumbrances
Recorded liens and mortgages are paid from sale proceeds before net funds are released to the seller or estate. Common deductions at closing include:
- Mortgage payoff(s) and home equity lines of credit
- Property taxes prorated to closing
- Recorded judgment liens or IRS/Arizona Department of Revenue tax liens
- HOA assessments or HOA liens
- Escrow and title company fees, broker commissions, and closing costs
To check for liens: search recorded documents at the county recorder’s office where the property sits. Also search Superior Court judgment records for the county to find judgment liens. For state tax liens, contact the Arizona Department of Revenue: https://azdor.gov/.
5) The closing statement is your best single source
The closing/settlement statement (Closing Disclosure or HUD-1) is the line‑by‑line record of where the sale money went. It lists payoffs, taxes, fees, commissions, and the net proceeds. Always ask the escrow or title company for a copy of that document. If the property was sold by an estate or trust, the closing statement will normally be part of the estate/trust accounting.
6) If you cannot get answers: records and remedies
- Recorded deed and title history: check the county recorder’s website for the deed and recorded documents. (Search the recorder for the county where the property is located.)
- Probate court records: contact the probate clerk in the county where the decedent lived or where the property is located. Probate filings are public and will show inventories, accountings, and distributions.
- Request an accounting: beneficiaries or interested parties can request an accounting from a personal representative or trustee. If the administrator or trustee refuses, Arizona probate procedures allow filing a motion with the probate court to compel accounting or review distributions (see Arizona probate resources: https://www.azcourts.gov/self-help/Probate and Arizona Revised Statutes, Title 14: https://www.azleg.gov/arsDetail/?title=14).
- If you suspect wrongdoing (improper distributions, failure to disclose payoffs), consider contacting an attorney who handles probate/trust disputes or filing a petition with the probate court.
Practical checklist of what to ask for and where to look
- Ask the escrow/title company for the final closing statement (Closing Disclosure/HUD-1).
- Request payoff statements from any lender named on the deed or mortgage statements.
- Search the county recorder for the deed, recorded liens, and any transfer-on-death instrument.
- Search county court records for judgments against the seller.
- If the seller is deceased: get the probate case number and request inventories, accountings, and the court order approving distributions from the probate clerk.
Helpful hints
- Start with the closing statement — it shows exactly who got paid and why.
- If the property lies in a county you don’t know, find the county recorder and superior court websites by searching “[county name] Arizona recorder” and “[county name] Arizona superior court”.
- Keep copies of these documents: deed, mortgage statements, payoff letters, closing statement, and any probate filings.
- If the house was part of an estate, the probate court file is public; you can request copies from the probate clerk.
- If the seller promised you the money or you are an heir and the administrator will not account for funds, you can ask the probate court to compel an accounting.
- Arizona-specific resources: Arizona Revised Statutes, Title 14 (Trusts, Estates, and Protective Proceedings) — https://www.azleg.gov/arsDetail/?title=14, and Arizona Courts probate self-help pages — https://www.azcourts.gov/self-help/Probate.
- When in doubt or if you encounter resistance, talk to an Arizona probate or real estate attorney — they can request records, explain required disclosures, and represent you in court if necessary.