Detailed Answer
When a foreclosed property was titled solely in a deceased spouse’s name, any excess sale proceeds pass to the decedent’s estate. Iowa law directs the sheriff to collect bids at the sale and pay off liens. If the sale brings more than the total debt, the surplus remains on deposit with the county sheriff.
Who can claim those funds? Under Iowa Code section 627.10, surplus proceeds belong to the former owner or the owner’s heirs or legal representatives. Since the owner has died, the claim shifts to the decedent’s estate. You must follow these steps:
- Open a probate estate or small-estate proceeding in district court. A personal representative or executor collects estate assets, including surplus sale funds. Iowa Code § 627.10.
- If the estate qualifies as a small estate, use the affidavit process under Iowa Code chapter 635. A surviving spouse or other heirs can file a small estate affidavit to claim up to $100,000 in property, including surplus funds. Iowa Code § 635.1.
- Identify eligible beneficiaries. If the decedent left a will, follow the named will beneficiaries. If not, apply Iowa’s intestacy rules. Under Iowa Code section 633.212, the surviving spouse often inherits the entire estate when there are no surviving lineal descendants, or half if lineal descendants exist. Iowa Code § 633.212.
- File a claim with the sheriff. The personal representative or affidavit filer must submit a verified claim and supporting probate documents. The sheriff reviews the claim, then disburses funds to the estate or heirs.
Without an open estate, the court cannot distribute surplus funds. Promptly opening probate or using the small-estate process ensures eligible parties receive what remains after foreclosure.
Helpful Hints
- Gather certified death certificate and proof of relationship before filing.
- Consult local court clerk’s office for probate or small-estate forms.
- Check lien priority; unpaid taxes or judgments may reduce surplus.
- File claims quickly—some sheriffs impose deadlines for surplus disbursement.
- Keep copies of all filings and sheriff correspondence.