Detailed answer

Basic concepts: ownership, survivorship, and surplus proceeds

When real property is owned by two or more people, the deed can create different forms of ownership. One common form is joint tenancy with a right of survivorship: when one joint owner dies, the decedent’s ownership interest automatically passes to the surviving joint owner(s) outside of probate. A properly drafted deed that creates a right of survivorship generally controls the transfer of title on death.

When a mortgage lender or a judgment creditor forces a foreclosure or sheriff’s sale, the sale proceeds first go to pay the sale costs and secured claim(s). If sale proceeds exceed those obligations, the extra money (the “surplus” or “overage”) does not automatically belong to the lender. State law and the court or sheriff handling the sale determine how that surplus is distributed to people who have a legal interest in the property.

Who is entitled to surplus funds in Montana?

Generally, surplus funds belong to whoever has a superior legal interest in the property at the relevant time under Montana law. That can include the borrower/homeowner of record, persons holding recorded liens, and persons who hold title as shown in public records. If a co-owner had a right of survivorship and that co-owner died before the time the title is evaluated for distribution, the surviving joint owner will usually be treated as the sole owner — and may be entitled to the full surplus — provided the survivorship interest was validly created and can be proved.

Critical timing: when ownership is determined

Who owns the property for surplus-distribution purposes is often determined as of specific dates set by the sale procedures or the court/sheriff handling distribution. That timing varies by the type of sale and the local process. If the decedent died before the time ownership is determined (for example, before distribution of sale proceeds), a valid survivorship interest typically means the survivor succeeded to title before distribution. If the decedent died after distribution, the result can be different.

What you must prove to assert a survivorship interest

To successfully claim a larger share (or the whole amount) of surplus funds by asserting a right of survivorship, you usually must:

• Produce the recorded deed that contains clear survivorship language (for example, words like “with right of survivorship” or wording that clearly creates a joint tenancy with survivorship). Ambiguous deeds can lead to disputes.
• Provide a certified copy of the other owner’s death certificate showing the date of death.
• Demonstrate that the death occurred before title was fixed for distribution (so the survivorship took effect before the surplus was distributed).
• Show there are no superior claims (for instance, recorded liens, judgment liens, or other encumbrances that have priority over the owner’s right to surplus).
• Produce any recorded affidavits of survivorship or other recorded documents required by county recording practices.

Practical steps to assert a claim to surplus funds in Montana

1. Gather documents: recorded deed(s), recorded mortgages or liens, death certificate(s), any probate filings, property tax records, county recording information, and any notices from the sheriff/court about the sale and surplus.
2. Check the public record to confirm the deed language and recording history. A deed that explicitly creates a right of survivorship is much stronger than one that is ambiguous.
3. Contact the agency holding the surplus (often the sheriff’s office, county clerk, or court). Ask what their process is for claiming surplus and what proof they require. Follow their written claim procedures and deadlines closely.
4. If the agency rejects your administrative claim or a competing claimant asserts a claim, you may need to file a motion or claim in the court that handled the sale (or file an interpleader/quiet-title action) to resolve competing claims to the funds.
5. Consider recording an affidavit or other document that memorializes the survivorship claim if the county recorder and local practice allow it. That often makes dealing with third parties easier.

Common complications and competing claims

Several issues can interfere with a survivorship claim:

• If the deed did not clearly create a right of survivorship (for example, it uses language consistent with tenancy in common), survivorship will not be recognized and the decedent’s share may pass by will or intestate succession.
• If the decedent’s interest was subject to a lien or judgment that has priority over a survivorship claim, proceeds may be used to satisfy that lien.
• Creditors, heirs, or personal representatives might assert competing claims and may force a court proceeding to determine rightful distribution.
• Timing disputes about whether death occurred before or after the date the property interest was fixed for distribution can be decisive.

When litigation may be necessary

If the agency holding the surplus refuses the claim, or a competing claimant files a claim, the typical remedy is to ask the court that supervised the sale (or to file a quiet-title or interpleader action) to declare who is entitled to the surplus. In that litigation you will present the deed, death certificate, recorded chain of title, and any other proof that demonstrates the survivorship took effect before distribution.

Relevant Montana statute sources and where to look

Montana’s statutes on property and conveyances and the court rules that govern sheriff sales and distribution of proceeds are found in the Montana Code Annotated. For background reading, start with the Montana Code Annotated table of contents and the title on property and conveyances:

• Montana Code Annotated (Table of Contents)
• Montana Code Annotated – Title 70 (Property) (look for provisions on deeds and conveyances)

Also review the county sheriff or clerk’s written procedures about surplus funds after sale; they can have specific local forms and deadlines.

When to get a lawyer

If the surplus is substantial, if there are competing claimants, if the deed language is ambiguous, or if the agency holding the funds refuses your claim, you should consult a Montana attorney experienced in real estate, title disputes, or probate. An attorney can review the deed language, the timing of events, and the local procedures and can represent you in any court action to obtain the funds.

Disclaimer: This is general information about Montana law and practice. It is not legal advice and does not create an attorney-client relationship. For advice about your specific situation, consult a licensed Montana attorney.

Helpful Hints

• Start by locating the recorded deed in the county where the property is located. Clear survivorship language in the recorded deed makes claims far easier to win.
• Obtain an official certified death certificate and the full chain of title showing recordings and dates.
• Contact the office handling the surplus (sheriff, county clerk, or court) as soon as possible and ask for their written claim procedure and deadlines.
• If other claimants appear, request in writing what proof they are relying on; keep all correspondence in case of later court proceedings.
• If the deed is ambiguous, consider a quiet-title action before the competing claimant drains the surplus or before funds are disbursed to the county treasury or other parties.
• Preserve originals and certified copies of all documents. Photocopies are often insufficient for distribution without certification.
• Even if you believe you are the sole survivor, record an affidavit of survivorship if local practice allows; that helps downstream entities accept your claim more quickly.
• Ask whether the surplus is being held in escrow, by the sheriff, or by the court — each office may have different claim and release procedures.
• Keep timelines in mind: missed deadlines for claiming surplus or for filing an action can jeopardize your ability to recover funds.