Short answer

If someone in Minnesota dies without a will, money from the sale of their property is usually part of their probate estate and must be handled through the probate process (or a small‑estate procedure) before distribution to heirs under Minnesota’s intestacy rules. However, funds that passed automatically outside probate (for example, to a surviving joint owner or by a transfer‑on‑death designation) are not part of the probate estate.

Detailed answer — step by step

1. Identify how title or the account was held

The first question is who owned the asset when the decedent died. Ownership controls whether sale proceeds are probate assets:

• If the decedent owned the property or funds solely in their name, the proceeds generally become part of the probate estate and must be distributed under Minnesota’s intestacy laws.
• If the property was owned jointly with right of survivorship, or if the account has a named beneficiary or transfer‑on‑death (TOD) designation, the proceeds may pass directly to the surviving owner/beneficiary and skip probate.
• If the transfer originated from a trust, or the asset had a contract specifying a payable‑on‑death recipient, those nonprobate procedures control distribution.

2. Preserve and hold the funds until ownership is clear

If you are an escrow agent, title company, bank, or purchaser holding sale proceeds, do not distribute funds until you confirm the decedent’s ownership status and receive instructions from either the person entitled under the title records or a court/personal representative. Holding funds carelessly can create liability.

3. Who manages the estate if the funds are probate assets?

A personal representative (called an administrator if there is no will) is appointed by the probate court to collect assets (including sale proceeds), pay debts, taxes, and expenses, then distribute the remainder to heirs. Minnesota’s probate and administration procedures set out the steps for appointment, notice to creditors, inventory, and final distribution. See Minnesota statutes, chapter 524 (probate and administration) for the statutory framework: https://www.revisor.mn.gov/statutes/cite/524.

4. Creditors, expenses, and priority claims

Before heirs receive anything, the administrator must pay funeral costs, valid creditor claims, taxes, and administration expenses. If the estate does not have enough assets, heirs may not get the full expected share. Creditors have a limited time to file claims under Minnesota probate law.

5. Distribution under intestacy (no will)

If the decedent left no will, Minnesota’s intestate succession rules determine who inherits and in what shares. The basic principle: heirs who survive the decedent (spouse, children, parents, siblings, etc.) receive property according to statutory priorities. For the statutory rules, see Minnesota’s intestacy provisions: https://www.revisor.mn.gov/statutes/cite/524.2 (intestate succession).

6. Small‑estate and simplified procedures

Minnesota provides simplified procedures in some limited situations so that small estates may avoid full probate. If the estate qualifies, a claimant or heir can use a short procedure or a small‑estate affidavit to obtain specific assets without a full administration. Check the statutes and local court rules or consult an attorney to see if the estate qualifies.

7. Common practical scenarios

• Sale completed after death, proceeds in escrow: If title was only in the decedent’s name, the escrow holder should hold funds and seek either a court order or instructions from the appointed administrator. If a surviving joint owner exists, the escrow holder may be able to pay that person directly if title documents confirm survivorship.
• Buyer paid and funds released to seller before death: If the decedent already received the funds and they remain in a personal account, those funds may be part of the probate estate unless another transfer method applied.
• Property sold subject to mortgage or liens: Outstanding liens and creditor claims must be resolved before distribution of net proceeds.

8. When should you involve the court or get legal help?

Seek court guidance or legal counsel when ownership is unclear, when multiple parties claim the funds, when liens or creditor claims exist, or when you are an escrow or title holder facing requests for payment. The Minnesota Judicial Branch provides probate guidance for administrators and heirs: https://www.mncourts.gov/Help-Topics/Probate.aspx.

Helpful hints

• Do not distribute sale proceeds until you confirm whether the asset is a probate asset or passed outside probate (joint owner, beneficiary, TOD deed, trust).
• If you hold the funds, get written confirmation of ownership or a court order before releasing money.
• Request a certified copy of the death certificate and any recorded deed, beneficiary designation, or account agreement showing ownership or survivorship rights.
• If you are an heir or potential administrator, file for appointment with the probate court promptly so you can access and manage estate funds lawfully.
• Watch the claims deadline: creditors must timely file claims against the estate; administrators must give notice as required by Minnesota law (see Minnesota probate statutes: https://www.revisor.mn.gov/statutes/cite/524).
• Consider a small‑estate procedure if the estate qualifies — it can save time and cost compared with formal administration.
• When in doubt, contact a Minnesota probate attorney or the county probate court for guidance; poorly handled distributions can create personal liability for distributers.