How can a former spouse or survivor assert entitlement to surplus funds following the owner’s death or divorce in Indiana?

Detailed Answer

When real estate generates proceeds above debts—either through a sheriff’s foreclosure sale or because a decedent’s estate sells property—those excess funds belong to entitled claimants. A former spouse or survivor must take deliberate steps under Indiana law to recover these surplus funds before statutory deadlines expire.

1. Determine the Source of the Surplus

Foreclosure sale surplus: Occurs when a sheriff’s sale of real estate yields more than the outstanding mortgage and sale costs.
Probate sale surplus: Occurs when a personal representative (executor) sells estate property for more than debts and distribution obligations.

2. Claiming Surplus from a Foreclosure Sale

Under Indiana Code Title 32, Article 29, Chapter 6, a clerk of the court holds any surplus from a sheriff’s sale in a separate account. The clerk must publish notice and mail notice to the former owner and recorded lienholders.

“Motion for Distribution of Surplus”: File this with the clerk of the circuit or superior court in the county where the sale occurred. Cite IC 32-29-6-2 (https://iga.in.gov/laws/2023/ic/titles/032#32-29-6-2).
Serve all parties of record:

Mortgagee or foreclosing lender
Former record owner
Other judgment or lienholders

Provide proof of your entitlement:

Divorce decree or property settlement agreement awarding you an interest
Survivorship or election-against-the-will documentation (marriage certificate, death certificate, will, election notice)

Court hearing and order:

The court will set a hearing date and determine distribution.
Once approved, the clerk disburses funds per the court’s order.

Key deadline: Claim and court order must occur within one year of the sheriff’s sale or the surplus escheats to the county treasury (IC 32-29-6-5).

3. Claiming Surplus from a Probate Sale

When an estate sells real property, proceeds above valid debts flow into the estate estate’s cash and distribute per will or intestacy statutes.

Open probate administration (if not already open): File a Petition to Administer Estate in the probate division of the circuit or superior court.
File a claim against the estate:

Survivor: Claim your elective or statutory share under IC 29-1-2-1 (https://iga.in.gov/laws/2023/ic/titles/029#29-1-2-1).
Former spouse (divorce): If the divorce decree awarded you funds or property, treat it as a judgment. File as a creditor’s claim under IC 29-1-7-5 (https://iga.in.gov/laws/2023/ic/titles/029#29-1-7-5).

Provide supporting documents:

Death certificate, will, probate filings
Divorce decree and property settlement

Approval and distribution:

The court reviews timely claims.
The personal representative distributes funds per court order.

Deadline: File creditor claims within three months of the estate’s notice of administration or waive claims (IC 29-1-7-5).

Helpful Hints

Act quickly. Strict timelines govern both foreclosure and probate claims.
Gather all paperwork: certified marriage certificate, divorce decree, death certificate, probate notices, and any property-settlement documents.
Visit the court clerk’s office early. Obtain copies of sale dockets, foreclosure filings, and probate petitions.
Track publication and mailing notices for foreclosure surplus. Missing a deadline can forfeit your claim.
Consider consulting a local probate or real‐estate attorney if you face dispute or complex title issues.
Keep organized records of service of process, filed motions, and court orders.