Detailed Answer — How this works in Hawaii

When a mortgage or trust deed foreclosure sale produces more money than needed to pay the foreclosing lender, the leftover amount is called the surplus (sometimes called an overage or excess proceeds). In Hawaii, the person who has the strongest legal right to that surplus is typically the former owner of the property (the decedent’s estate), followed by other claimants such as junior lienholders or creditors. If your parent died and their estate was never probated, you still may be able to claim those surplus funds, but you must follow Hawaii’s procedures to show you have legal authority to receive the money.

Step-by-step overview

1. Confirm whether surplus funds exist and where they are held.

   Find the foreclosure sale documents and the trustee’s or sheriff’s return of sale. If the sale produced a surplus, that fact may be reflected in the sale report and related recordings. In Hawaii, foreclosure-related recordings and sale notices are typically filed with the Bureau of Conveyances (for Oʻahu and statewide land records) or recorded in the circuit court file if the sale was judicial. Start by obtaining the recorded sale documents and any trustee’s deed or deed upon sale.

   Useful official resources: Bureau of Conveyances (State of Hawaii) — https://cca.hawaii.gov/boc/ and Hawaii Judiciary self-help pages — https://www.courts.state.hi.us/self-help/estate-administration

2. Identify who is holding the money.

   If the trustee or sale agent retained surplus funds, they may be required to pay them out according to court order or statutory procedure. Surplus money may be deposited with the court clerk in a judicial foreclosure or held by a trustee/escrow agent in a nonjudicial sale. Contact the trustee of the sale, the lender’s attorney, or the clerk of the court where the foreclosure occurred to learn where the funds are held and whether a formal claim must be filed.

3. Establish your legal right to the surplus.

   Because your parent is deceased and the estate was not probated, you generally must show you are legally entitled to receive assets of the decedent. That typically means one of these approaches:

   • Open a probate (administration) case and obtain Letters Testamentary or Letters of Administration (if there was no will). As personal representative (executor/administrator), you can collect estate assets, including a foreclosure surplus.
   • If the estate qualifies, use Hawaii’s small-estate or summary procedures (if available and applicable) to collect personal property without full formal administration. Whether surplus proceeds from a foreclosure count as personal property for small-estate procedures varies; check the court’s guidance and the statute or talk with a probate attorney.
   • If no probate is opened and the amount is small, the holder of the funds may accept an affidavit of heirship plus supporting documents in limited circumstances, but trustees and courts are cautious about releasing funds without formal authority.

   See general probate guidance from the Hawaii Judiciary: https://www.courts.state.hi.us/self-help/estate-administration

4. Gather required documents.

   Commonly required documents include: certified or certified-excerpt death certificate for your parent; a will (if one exists); letters of administration or testamentary from the probate court; heirship affidavits; ID for the claimant; and copies of the foreclosure sale and trustee’s deed. If you open probate, the court will provide a list of documents required for appointment.

5. File the correct claim or petition.

   If the surplus is held by a court, you will typically file a petition with that court asking for distribution of funds to the estate representative. If the funds are held by a trustee or trustee’s escrow, you may need to present proof of your authority (letters or probate court order) and request payment. The holder may require a court order or might accept payment to the personal representative. Competing claimants (other heirs, creditors, lienholders) can object, so formal court administration is often the safest path.

6. Watch deadlines and competing claims.

   Statutes of limitation and distribution timelines vary. Some jurisdictions require claimants to act within a limited time after sale or after notice. If others (creditors, junior lienholders) file claims before you, distribution can become contested. Start promptly to preserve your position.

7. Consider professional help.

   Because probate and foreclosure surplus claims can involve competing legal rights and formal court procedures, consider consulting a probate or real estate attorney licensed in Hawaii. An attorney can help open probate (if needed), prepare petitions, and negotiate with trustees or other claimants.

Practical examples (hypothetical)

Example A: Foreclosure sale produced $50,000 in excess. The trustee deposited funds with the clerk of the circuit court. The decedent’s daughter opens probate and is appointed administrator. She files a petition with the court for distribution of the surplus to the estate. The court approves distribution to the administrator, who then distributes to heirs after paying estate debts.

Example B: Foreclosure surplus is small and the trustee is willing to release funds. The trustee asks for a certified death certificate and an affidavit of heirship. The trustee ultimately requires a court order, so the heirs must open a summary probate to obtain authority and receive the funds.

Where to start right now

• Obtain a certified death certificate for your parent.
• Obtain copies of foreclosure and sale documents from the Bureau of Conveyances or the court file (contact the clerk of court where the property is located).
• Contact the sale trustee or the entity holding the funds and ask what they need to pay out a surplus.
• Contact the Hawaii Judiciary self-help center or a probate attorney to determine whether you must open probate or qualify for a small-estate process: https://www.courts.state.hi.us/self-help/estate-administration

Official resources

• Hawaii Revised Statutes, current collection: https://www.capitol.hawaii.gov/hrscurrent/
• Bureau of Conveyances (recorded deeds and foreclosure-related recordings): https://cca.hawaii.gov/boc/
• Hawaii Judiciary — estate administration and probate forms & information: https://www.courts.state.hi.us/self-help/estate-administration

Important caution: The precise procedure and documentation required vary with whether the foreclosure was judicial or nonjudicial, where the surplus is being held, whether a will exists, and who else may assert a claim. For the best outcome, talk with an attorney familiar with Hawaii probate and foreclosure practice.

This is educational information only and not legal advice. For advice about your specific situation, consult a licensed Hawaii attorney.

Helpful Hints

• Act quickly. Locate sale records and contact the holder of the surplus as soon as you learn of a foreclosure sale.
• Get certified documents. A certified death certificate and certified copies of sale documents will ease verification by trustees and courts.
• Open probate if needed. Formal probate gives you authority to collect estate assets and resolve competing claims; small-estate procedures may or may not apply.
• Keep careful records. Track communications, document requests, receipts, and any distributions to avoid future disputes among heirs or creditors.
• Expect claims by creditors. Estate assets may be used to pay debts; surplus funds can be part of estate administration and may not go directly to heirs until debts are resolved.
• Budget for costs. Probate filings, notices, and attorney fees reduce the net amount distributed from any surplus.
• Contact official sources. Use the Bureau of Conveyances for recorded property documents (https://cca.hawaii.gov/boc/) and the Hawaii Judiciary’s probate pages for court procedure (https://www.courts.state.hi.us/self-help/estate-administration).
• When in doubt, consult counsel. A licensed Hawaii probate or real estate attorney can evaluate competing claims, draft petitions, and represent the estate in court.

Short checklist

1. Confirm surplus and holder of funds.
2. Gather death certificate, sale documents, and any will.
3. Open probate or use a small-estate procedure if available/appropriate.
4. File claim or petition and follow court or trustee instructions.

Disclaimer: This article provides general information about Hawaii law and procedures and does not constitute legal advice. Consult a licensed Hawaii attorney about your specific facts before taking action.