Detailed Answer
What Are Surplus Proceeds Under Connecticut Law?
When a mortgage foreclosure sale yields more funds than the debt owed plus permitted fees, the extra amount is called surplus proceeds. The officer conducting the sale must apply the net funds according to statute. See Conn. Gen. Stat. § 49-14.
Distribution When the Mortgagor Dies Before Sale
If the mortgagor passes away before or during the foreclosure process, the foreclosure officer pays the surplus to the mortgagor’s legal representative. The surplus becomes part of the deceased’s estate. The personal representative—commonly called an executor (if named in a will) or an administrator (if appointed by the probate court)—collects these funds on behalf of the estate.
Who Qualifies to Receive the Surplus Proceeds?
- Personal Representative: The court-appointed executor or administrator who manages the deceased’s estate.
- Estate Beneficiaries: Individuals named in the will or, if there is no will, heirs under Connecticut’s intestacy law. See Conn. Gen. Stat. § 45a-437.
Probate Process vs. Small Estate Affidavit
To claim surplus proceeds, you generally open a probate estate in the district where the decedent lived. Full probate administration addresses debts and distributes assets. If the estate’s total personal property is under $40,000, Connecticut permits a simplified affidavit process under Conn. Gen. Stat. § 45a-287. This small estate procedure can speed up access to surplus funds without formal letters of administration.
Helpful Hints
- Contact the probate court in the district where the deceased lived to open an estate or file a small estate affidavit.
- Gather the death certificate, foreclosure sale documents, and proof of debt payoff.
- If a will exists, locate it and file it promptly with the probate court.
- Consult a probate attorney if the estate exceeds $40,000 or if beneficiaries dispute the distribution.
- Keep detailed records of all estate assets, liabilities, and distributions for court and beneficiary review.