How a Former Spouse or Survivor Can Claim Surplus Funds After Death or Divorce in Tennessee

Detailed Answer

When real property sells under a court order or execution in Tennessee, any sale proceeds beyond the debt and sale costs create surplus funds. If the property owner dies or divorces, a former spouse or surviving spouse may have a legal right to those funds. Here is how to assert that right under Tennessee law:

1. Confirm the Sale and Surplus Amount

Obtain a certified copy of the court’s sale order or execution record. Locate the case number, county, sale date, and the exact surplus amount held by the court clerk or sheriff.

2. Establish Your Interest

Surviving spouse: You may qualify for a family allowance or homestead allowance under the decedent’s probate estate. See Tenn. Code Ann. § 30-2-101 (homestead) and § 30-2-305 (family allowance).
Former spouse: You may hold an equitable or contractual interest in the property pursuant to a final divorce decree or property settlement. Review your decree for any award of proceeds or lien on sale proceeds.

3. File a Petition for Surplus Funds

Within the jurisdiction where the sale occurred, file a petition to claim surplus funds in the circuit or chancery court. Tennessee law imposes a ten-year statute of limitations to recover surplus after an execution sale. See Tenn. Code Ann. § 28-3-110.

Your petition should include:

Court case number, sale date, and surplus amount.
Your full name, address, and relationship to the decedent or former spouse.
Certified copy of the death certificate or divorce decree.
Proof of interest in the property (estate paperwork or divorce settlement).
Verification of service on the sheriff, clerk, and any interested parties.

4. Serve Notice and Attend Hearing

Serve the petition on the court clerk, the sheriff who conducted the sale, and any other party with an interest. The court will schedule a hearing to determine your entitlement. If uncontested, the judge will issue an order directing the clerk to disburse the funds.

5. Obtain the Funds

Once you have a court order in hand, present it to the clerk’s office. The clerk will issue a check for the surplus to you. If you fail to claim within the statute of limitations, the funds may escheat to the State Treasury.

Helpful Hints

Begin early. Gather all estate or divorce documents before filing your petition.
Verify deadlines. A missed deadline can forfeit your right to claim surplus funds.
Use certified copies. Courts will not accept uncertified or photocopied official records.
Consider legal counsel. Even a brief consultation can clarify complex estate or property issues.
Keep records of all filings and service receipts for your file.

Disclaimer: This article provides general information about Tennessee law and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.