Detailed Answer
Short answer: In South Dakota, when a decedent’s house is sold during estate administration, the net proceeds generally become part of the decedent’s probate estate and are distributed according to the decedent’s will once the estate’s priority expenses and creditor claims are paid. However, whether the sale proceeds are part of the probate estate depends on how the property was owned before death and whether any non‑probate device (joint tenancy, transfer‑on‑death deed, trust, beneficiary designation) applies.
How the process normally works
- Identify ownership and title: If the house was owned solely in your dad’s name at his death, the house (or the proceeds from selling it) is normally a probate asset. If the house was owned jointly with right of survivorship, titled in a trust, or held with a transfer‑on‑death designation, it may pass outside probate to the surviving owner or named beneficiary.
- Executor/personal representative duties: If the house is a probate asset, the personal representative (executor) is responsible for collecting estate assets, paying administration expenses, funeral costs, taxes, and creditor claims, and then distributing what remains according to the will. The representative may sell real property if the will or court order permits and if sale is needed to pay debts, expenses, or to carry out the will’s terms.
- Priority claims before distribution: South Dakota law gives priority to certain claims and expenses of administration (for example: costs of administration, funeral expenses, taxes, and valid creditor claims). Those must be paid before beneficiaries under the will receive distributions. See Title 29A of the South Dakota Codified Laws for probate rules: https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Title&Title=29A
- Distribution under the will: After paying allowed claims and costs, the remaining estate (the residue) is distributed to beneficiaries according to the will. If the will directs that the residue go to a specific person or persons, the leftover cash from the sale would be distributed to them. If there is no valid will, the estate is distributed under South Dakota’s intestacy laws (also found in Title 29A).
Common exceptions and important details
- Non‑probate transfers: A jointly titled house (with right of survivorship), a house owned by a trust, or a house with a transfer‑on‑death deed generally passes outside probate. If the house passes outside probate, the sale proceeds do not become part of the probate estate and are not controlled by the will.
- Homestead, family allowance, and exempt property: South Dakota law provides for certain allowances and exempt property that can reduce what is available to pay creditors and beneficiaries. These priorities can affect how much of the sale proceeds remain for distribution under the will. Relevant probate statutes are in Title 29A: https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Title&Title=29A
- Creditor claims and time limits: The estate must give notice to creditors and allow time for claims. Valid creditor claims approved in the administration reduce the funds that go to beneficiaries.
- Sale by co‑owner or surviving spouse: If a surviving spouse or co‑owner has legal title (e.g., joint tenancy), they may be able to sell or keep the property without probate involvement. If the property is sold by a personal representative, the proceeds are handled through the probate estate.
Worked hypothetical example
Hypothetical facts: Dad’s home sells for $200,000. Mortgage payoff and costs of sale are $60,000. Administration costs, taxes, and approved creditor claims total $30,000. That leaves $110,000.
Outcome: If the home was a probate asset, the $110,000 becomes part of the estate. After paying any homestead or family allowances, the remaining funds will be distributed in the order the will specifies (specific bequests first if the will has them, then the residuary beneficiaries). If the house passed outside probate (for example, jointly to a surviving owner), none of those proceeds pass under your dad’s will.
Practical next steps
- Check the deed and title to determine how the house was owned at death.
- Ask whether there is a pending probate case, who is the personal representative, and whether the personal representative intends to sell the house.
- Ask the personal representative for an inventory of estate assets, a list of creditor claims, and a proposed distribution plan.
- Consult a South Dakota probate attorney if you suspect nonpayment of valid distributions, improper handling of the sale, or unclear title matters.
Helpful Hints
- Locate the deed: the title record shows whether the house was sole property, joint tenancy, or subject to another transfer arrangement.
- Obtain a copy of the will and any trust documents—those control distribution of probate assets.
- Ask the executor for a written accounting showing sale proceeds, payoffs (mortgage, liens), administration costs, creditor payments, and the net distributable amount.
- Remember that certain claims (funeral expenses, taxes, administration costs) take priority over beneficiary distributions.
- If the house had a mortgage or liens, those must be paid from the sale proceeds before remaining money is distributed.
- If you are a beneficiary and believe the estate administration is being handled improperly, file a petition in probate court or consult an attorney promptly—timing matters because of creditor‑claim deadlines and statute of limitations.
Quick resources
South Dakota probate statutes and rules are in Title 29A of the South Dakota Codified Laws: https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Title&Title=29A
Disclaimer
This article explains general principles under South Dakota probate law and is for educational purposes only. It is not legal advice. For advice about a specific situation, consult a licensed South Dakota attorney.