How Can a Former Spouse or Survivor Assert Entitlement to Surplus Funds After the Owner’s Death or Divorce in West Virginia?

Detailed Answer

When a property sells at a foreclosure auction for more than the outstanding debt and costs, the excess proceeds—called surplus funds—remain in the custody of the Circuit Clerk. A former spouse or surviving spouse may have a legal right to those funds if they held an enforceable interest in the property at the time of sale. Under West Virginia law, the court may direct payment of surplus money upon proof of entitlement.

1. Identify the Foreclosure Sale and Surplus
After a creditor enforces a mortgage by sale under W. Va. Code § 38-3-5, the Circuit Clerk collects the sale proceeds. Once the debt, interest, court costs and attorney’s fees are paid, any remaining balance constitutes surplus funds. The Clerk must hold these funds and await claims.

2. Determine Your Legal Interest
• A former spouse may claim surplus if the divorce decree awarded them a share of sale proceeds or reserved an equitable lien on the property. See W. Va. Code § 48-2-34 (distribution of marital property in divorce).
• A surviving spouse may claim under intestate succession or elective share statutes if the owner died before distribution. For intestate succession, see W. Va. Code § 42-1-1 et seq..

3. File a Petition for Distribution
File a “Petition for Distribution of Surplus Funds” in the foreclosure cause with the Circuit Clerk. Include:

A certified copy of the divorce decree or death certificate.
Letters testamentary or letters of administration, if an estate has opened.
An affidavit describing your legal interest in the property and surplus.

Under W. Va. Code § 38-3-16, the court may require proof and then order payment to entitled parties.

4. Attend the Distribution Hearing
Once your petition is filed, the court schedules a hearing. Present evidence such as:

Divorce decree provisions awarding sale proceeds.
Certified death certificate and marriage license.
Estate documents proving your appointment as personal representative.

After considering all claims, the court issues an order directing the Clerk to distribute the surplus according to priority and entitlement.

5. Observe the Claim Deadline
Under W. Va. Code § 38-3-17, any unclaimed surplus funds remaining one year after the sale must be paid into the county school fund. Filing early protects your right to recovery.

Helpful Hints

Obtain certified copies of all court orders, death certificates and estate letters before filing.
Review the foreclosure cause docket for published notices and deadlines.
File your petition well in advance of the one-year deadline under W. Va. Code § 38-3-17.
Check county-specific local rules for filing requirements in the Clerk’s office.
Keep proof of service and copies of all filings organized.
Consider mediation if multiple claimants dispute the surplus distribution.