How Can a Former Spouse or Survivor Assert Entitlement to Surplus Funds After an Owner’s Death or Divorce?
Detailed Answer
When a mortgaged property sells at sheriff’s auction for more than the debt owed, the extra money—called “surplus funds”—goes to parties with legal interests in the property. Maine law governs how those funds distribute when the owner divorces or dies.
1. Former Spouse’s Claim After Divorce
If the property owner divorced before the sheriff’s sale, the divorce decree may grant the former spouse a share of sale proceeds. To assert entitlement, the former spouse must:
- File a written claim in the district court or sheriff’s office that handled the sale within 90 days of the sale date. See 14 M.R.S. § 6322.
- Include a copy of the Divorce Judgment or Property Settlement identifying the former spouse’s interest.
- Attach proof of identity and mailing address.
- Serve notice on the mortgagee and other lienholders if required.
2. Survivor’s Claim After Death
If the property owner died before or after the sale, the surplus passes to the decedent’s estate. A surviving spouse or other heirs can claim the funds by:
- Petitioning the probate court in the county where the decedent lived to be appointed personal representative, if not already appointed.
- Filing a claim for the surplus with the probate court or the sheriff’s office within 90 days of the sale notice. See 14 M.R.S. § 6327.
- Attaching a certified copy of the death certificate and, for a surviving spouse, a copy of the marriage certificate.
- Providing proof of no other claims with higher priority.
3. Probate Distribution Outside Foreclosure
If the property sale occurs through probate rather than foreclosure, the personal representative distributes net proceeds under the Maine Probate Code. After debts and expenses, Maine law entitles a surviving spouse to an elective share. See 18-C M.R.S. § 2-102.
Helpful Hints
- Note the 90-day deadline. Late claims usually fail.
- Keep certified copies of divorce and death certificates.
- Review your divorce decree for language on property sales.
- Check the sheriff’s sale notice for the exact sale date.
- Consult an attorney if multiple heirs or lienholders object.