Detailed Answer

Short answer: Surplus proceeds become part of the decedent’s estate. If the owner died without a will (intestate), the funds must be claimed and distributed under Vermont’s probate and intestacy rules. If there is no surviving spouse or descendants, siblings (or the siblings’ children if a sibling predeceased) are the usual heirs and will share the surplus according to Vermont’s intestate succession rules.

What are surplus proceeds?

“Surplus proceeds” are the money remaining after a property sale (for example, a foreclosure or a tax sale) once secured creditors and sale costs are paid. The holder of the sale (typically a court, sheriff, or municipal treasurer) will retain the surplus until a lawful claimant comes forward.

Who controls the surplus when the owner dies intestate?

The surplus does not automatically go to any single person. Instead:

The surplus is an asset of the decedent’s estate.
An appointed personal representative (executor or administrator) must claim the funds and handle distribution as part of estate administration.
If no personal representative exists, an interested person (for example a likely heir) typically must open a probate administration so someone can be authorized to collect and distribute the funds.

How Vermont law directs distribution among heirs

Vermont’s probate and intestacy rules control who inherits when there is no will. The general order under Vermont law starts with a surviving spouse and descendants; if none exist, the estate goes to other relatives such as parents and siblings. See Vermont’s probate and intestacy rules for full detail: 14 V.S.A., Title 14 (Probate).

Practical outcomes when siblings are involved:

If the decedent left no spouse, no children, and no surviving parents, the surviving siblings inherit the estate—typically in equal shares.
If a sibling died before the decedent but left children, those children generally inherit their parent’s share (often treated per stirpes or by the rules in the Vermont intestacy statute).
If some heirs cannot be located, the personal representative usually must make reasonable efforts to find them. If heirs remain missing, the court may allow additional steps such as notice by publication or require the representative to deposit the funds with the court or state under statutory unclaimed property rules.

Steps to claim and distribute a surplus in Vermont

Identify the holder of the surplus (court clerk, county sheriff, municipal treasurer, or mortgagee). Contact that office to learn their claim procedure.
Open probate (if one is not already open). Someone must be appointed as the personal representative (administrator) to collect estate assets, including surplus proceeds. Vermont Probate information: Vermont Judiciary — Probate.
Obtain letters testamentary or letters of administration from the probate court. The holder of the funds will usually require those letters plus a certified death certificate and ID before releasing money.
Present proof of heirship. If there is no will, the personal representative submits an inventory and proposed distribution under intestacy law for court approval if required.
Distribute the funds to heirs. The personal representative pays valid claims, costs, taxes, and then distributes the remainder according to intestacy rules.
If heirs disagree, petition the probate court for instructions or an accounting. The court resolves contested claims.

Common complications

Multiple potential heirs (for example many siblings) can delay distribution; the representative must locate everyone and confirm shares.
If the surplus holder is not responsive or if the holder demands more documentation than you have, the probate court can order release after proper filings.
Unlocated heirs, disputes among siblings, or creditors’ claims can require a formal court process and possible hearings.
Small-estate procedures may be available for low-value estates that can speed claims without full probate. Check Vermont probate rules for small-estate thresholds and procedures.

When siblings should act

Siblings with a possible interest should act promptly:

Ask the surplus holder how long they will retain funds and what proof they require.
Consider opening probate if the estate has other assets or if the holder will only release to a personal representative.
Keep records: death certificate, proof of relationship (birth certificates, family records), and any correspondence about the sale and surplus.

Important links

Vermont statutes, Title 14 (probate matters, intestacy): https://legislature.vermont.gov/statutes/title/14
Vermont Judiciary — Probate information and forms: https://www.vermontjudiciary.org/court-procedure/probate

Disclaimer

This information is educational and general in nature. It is not legal advice, and it does not create an attorney-client relationship. For guidance specific to your situation, consider consulting a Vermont probate attorney or contacting the Probate Division of the Vermont Judiciary.

Helpful Hints

Locate the surplus holder first: contact the county clerk, sheriff, or municipal treasurer involved in the sale.
Gather documents: certified death certificate, proof of relationship (birth or baptismal records, family bibles, old tax or school records), and any property or sale paperwork.
If values are small, ask the probate court whether a simplified or small-estate claim is available.
Communicate in writing with other siblings and keep records of efforts to locate heirs—this helps if the court later reviews your actions.
Beware of third-party “claim” companies that offer to recover surplus funds for high fees. Verify credentials before signing anything.
If heirs disagree about distribution, consider mediation before expensive litigation; the probate court can resolve disputes if necessary.
Consult a probate attorney if the surplus is substantial, if heirs are contested, or if multiple jurisdictions or tax issues are involved.