1. Detailed Answer

When a property in South Dakota sells at a judicial or sheriff’s sale for more than the amount owed on a mortgage or lien, the excess—and any funds that remain after creditors claim their share—become “surplus funds.” A former spouse (after divorce) or a survivor (after the owner’s death) may have a legal right to those funds if they hold an interest under a divorce decree, marital property award, or under intestate or testate succession rules.

1.1 Statutory Framework for Surplus Funds

• SDCL § 21-49-17 requires the sheriff to hold surplus proceeds after a foreclosure sale and to notify interested parties.
• Under SDCL § 15-6-54 (substitute service) and § 21-49-17(2), claimants must file within six months of the sale date.

1.2 Claims by Former Spouses in Divorce

During divorce proceedings, the court divides marital assets under SDCL § 25-4A-15. If the property was sold at foreclosure and funds remain, a divorce decree may award your former spouse interest in those proceeds.

To assert that right:

1. Obtain a certified copy of your divorce decree showing entitlement to a share of the sale proceeds.
2. File a Verified Claim of Interest in the county where the sale occurred, within six months of the sale, per SDCL § 21-49-17.
3. Attach supporting documents: divorce decree, sheriff’s sale report, mortgage payoff statement.
4. Serve notice on the sheriff and all parties listed in the sale notice, as required by SDCL § 15-6-4.
5. Attend any court hearing to establish your interest and secure distribution of the funds.

1.3 Claims by Survivors After Death

If the owner died leaving property that later produced surplus funds, survivors—such as a spouse, children, or other heirs—may claim under the probate code.

Key steps include:

1. Open a probate estate in the circuit court of the decedent’s county. See SDCL § 29A-2-102 for intestate succession.
2. Obtain Letters of Administration or Testamentary from the court clerk.
3. File a Verified Claim of Interest against the sheriff’s surplus fund in the county of sale, attaching the death certificate, letters, and any recorded will.
4. Provide notice to all heirs and the sheriff as outlined in SDCL § 15-6-4 and SDCL § 21-49-17.
5. Request a hearing to confirm entitlement and distribute the funds through the probate process.

1.4 Common Pitfalls and Deadlines

Missing the six-month deadline is fatal. The court loses jurisdiction to distribute surplus funds once the time expires. Keep track of the exact sale date on the sheriff’s return.

Incorrect service of process or incomplete documentation can delay or deny your claim.

2. Helpful Hints

• Review the sheriff’s sale notice carefully to confirm the sale date and certified amount.
• Obtain certified court documents—decree, marriage certificate, death certificate—to prove your interest.
• File early. Start your claim well before the six-month cutoff to allow for service and possible objections.
• Check the probate code (Title 29A SDCL) if the owner died without a will, to identify heirs.
• Consider consulting a local attorney familiar with foreclosure surplus claims and probate administration.