Detailed Answer — How leftover proceeds from a sale of a parent’s home are handled under Maine law
Short answer: If the house is part of your father’s probate estate, creditors and required allowances are paid first; any money left after those obligations is distributed according to your father’s will. If the house was not part of the probate estate (for example, it passed automatically to a surviving joint owner, had a transfer-on-death designation, or was held in a trust), the sale proceeds may bypass probate and the will may not control.
Why ownership and how title passed matter
Who owned the house and how title was held determine whether the sale and proceeds are handled by the probate process.
- If the house was owned solely in your father’s name at his death, it is usually a probate asset. The personal representative (called an executor if named in the will, or an administrator if appointed) administers the estate, pays debts, and then distributes what remains under the will. See Maine probate law (Title 18‑B) for the rules that govern administration, creditor claims, and distributions: https://legislature.maine.gov/statutes/18-B/.
- If the home was owned as joint tenants with right of survivorship or with a valid survivorship transfer, the surviving joint owner generally owns the property automatically at the moment of death. In that case, the property (and any sale proceeds) typically does not pass through probate and is not controlled by the decedent’s will.
- If the home was in a living trust or had a beneficiary designation that transfers ownership at death, the trust or beneficiary designation controls distribution and the will usually does not affect those proceeds.
What happens when the house is sold during estate administration
When a house is part of the probate estate and is sold as part of estate administration, the typical order of events is:
- The personal representative files a probate administration including a list of assets (including sale proceeds).
- Creditors and tax obligations are notified and paid. Maine probate procedures set the rules for creditor notice and filing of claims — the estate must satisfy lawful claims before distributing to beneficiaries (see Title 18‑B: https://legislature.maine.gov/statutes/18-B/).
- Required allowances or exemptions for the surviving spouse or minor children, funeral expenses, and estate administration costs are paid.
- After valid claims and expenses are paid, any remaining money (the residue of the estate) is distributed according to the terms of the will. If the will leaves a specific monetary gift or the residue to named beneficiaries, those provisions control the distribution.
Common complications to watch for
- Secured debts: If a mortgage or lien existed, payoff is required or the lien must be released before clear title is transferred. Mortgage payoff typically reduces sale proceeds before distribution to beneficiaries.
- Priority of payments: Certain claims and allowances have priority (for example, funeral costs and administrative expenses). That affects how much, if any, is left for beneficiaries under the will.
- Outside sales: If the surviving co‑owner sold the property outside probate because they owned it jointly with rights of survivorship, the sale proceeds often are not estate property and will not be distributed under the will.
- Disputed claims: If creditors or heirs dispute claims, probate can be delayed while those disputes resolve, which can delay distribution of remaining funds.
What if there is no will or the will does not cover the remaining money?
If your father died without a valid will (intestate), Maine’s intestacy rules determine who inherits. If the will fails to dispose of the residue, or a devise is invalid, the residue may pass under Maine’s intestacy statutes. For where to look: Title 18‑B, Maine Revised Statutes governs wills and intestate succession.
Practical example (hypothetical)
Suppose your father owned the house alone and named an executor in his will. The executor sells the house for $300,000, pays off a $100,000 mortgage, pays $20,000 in funeral and administration expenses, and pays $10,000 in valid creditor claims. After those payments, $170,000 remains. That $170,000 becomes part of the estate residue and is distributed according to your father’s will.
Helpful Hints
- Check the deed and title. Look for joint ownership, survivorship language, transfer‑on‑death designations, or trust ownership. These determine whether the property is a probate asset.
- Find the will and any trust documents. The will alone does not control non‑probate assets (joint tenancy, TOD, trusts).
- Ask the personal representative for an inventory. The personal representative must identify estate assets, pay debts, and account to beneficiaries.
- Get a probate docket number and read the court filings. Maine Probate Court filings show creditor notices, inventories, and distributions. See general probate self‑help: Maine Judicial Branch — Wills & Estates.
- Preserve documents: deed, mortgage payoff statements, closing statements from sale, the will, death certificate, and any trust paperwork.
- Consult an attorney for disputes or complex situations: title issues, creditor problems, or unclear distributions are common and can affect what beneficiaries receive.
- Watch deadlines for creditor claims. The probate process includes specific notice and claim deadlines; missing those deadlines can affect rights and responsibilities.
- Consider tax and reporting implications. Estate administration and sale proceeds can have tax consequences; check with a tax advisor or attorney for specifics.
Next steps you can take today: 1) Locate the deed and will. 2) Contact the personal representative or the probate court handling the estate to ask whether the home is in probate. 3) If needed, consult a Maine probate attorney to review title, the probate filings, and the proposed distribution.
Disclaimer: This article explains general principles of Maine probate and estate distribution. It is educational information only and not legal advice. For guidance about a specific situation, contact a licensed Maine attorney.