How Can a Former Spouse or Survivor Assert Entitlement to Surplus Funds Following the Owner’s Death or Divorce?
Detailed Answer
When a foreclosure sale produces proceeds that exceed the debt owed, Arkansas law requires the sheriff to hold the surplus funds. Under Arkansas Code Ann. § 16-66-212, interested parties may claim those funds by filing a petition in the circuit court within one year of the sale. Claimants must prove their legal interest in the property before the court issues a distribution order.
1. Understanding Arkansas Surplus Fund Claims
Arkansas Code Ann. § 16-66-212 provides the procedure for disposing of surplus proceeds. After the sale, the clerk deposits the excess in a special fund. A claimant files a petition supported by an affidavit stating the factual and legal basis for the claim. The court sets a hearing, serves notice on potential claimants, and then issues an order allocating the funds among rightful owners.
2. Claiming Surplus Funds After the Owner Dies
- Appoint a personal representative or executor and obtain letters testamentary or letters of administration.
- File a petition in the circuit court where the sale occurred, citing Arkansas Code Ann. § 16-66-212 (link).
- Attach a certified copy of the decedent’s death certificate and any relevant will or trust documents.
- Serve notice on all potential heirs as required by the Arkansas Rules of Civil Procedure.
- Attend the hearing and present proof of estate administration and heirship.
3. Claiming Surplus Funds After Divorce
- Obtain a certified copy of the divorce decree showing property division or award of proceeds.
- Record the decree in the county where the foreclosure sale took place.
- File a petition in the same circuit court within one year of the sale, and attach the decree to support your claim.
- Serve notice on your former spouse and any other interested parties.
- At the hearing, present the divorce decree and any additional evidence proving your entitlement to the surplus.
Helpful Hints
- File your petition before the one-year deadline or you will lose your right to claim (Ark. Code Ann. § 16-66-212).
- Gather all certified documents: death certificates, letters testamentary, divorce decrees, and property records.
- Consult the circuit clerk’s office for local filing requirements, fees, and form details.
- Consider seeking legal advice if multiple parties claim the surplus or if your interest is unclear.
- Keep organized copies of all filings, proof of service, and court orders.