Florida Foreclosure Sale Surplus Funds and Florida Tax Deed Sale Surplus Funds – What is the Purpose of Having to File Probate in Order to Get Your Funds?

Representing Homeowners

On occasion when I file a motion for surplus funds from a Florida Foreclosure Sale or Florida Tax Deed Sale, my motion gets rejected because the judge wants clarification of the heirs. This can mean that a probate needs to be done in order to get the funds for my client(s). In what instances would a probate be necessary?

For starters, probate isn’t always necessary at all. In fact, the vast majority of the Florida Foreclosure Sale Surplus cases and Florida Tax Deed Sale Surplus cases don’t need probate at all. It is just a few of them that actually need it. Mostly, when I have to file for probate it is due to the original owner of the property being deceased and it is their family members (heirs) who are due the surplus funds. Generally speaking, for Foreclosure Surplus matters, Florida Statute 45.033(b), states, “An involuntary transfer or assignment may be as a result of inheritance.” For Tax Deed Surplus Funds, you look to Florida Statute 197.582(2)(a), which states, “if the property is purchased for an amount in excess of the statutory bid of the certificateholder, the surplus must be paid over and disbursed by the clerk.” For this statute, you must make a claim for the surplus funds and state that you are the former owner of the property, or the legal heir(s) of the former owner of the property. However, if there are a number of heirs or there is some question as to who the heirs are, the court may require a probate to be filed so that all heirs can be absolutely determined. The court just wants to make sure the funds are going to the right place.

Most of the time, a simple summary administration can be done if certain conditions are met. According to Florida Statute 735.201, a summary administration can be done if the value of the estate, “less the value of property exempt from the claims of creditors, does not exceed $75,000 or that the decedent has been dead for more than 2 years.” Often it is the second part that helps the most because the reason the property has gone into foreclosure or has been sold at a tax deed sale is because the owner died some time ago, and no one paid the mortgage or taxes. However, if it was less than two years since their death AND the Florida Foreclosure Sale Surplus Funds or Florida Tax Deed Sale Surplus Funds are more than $75,000, then a formal probate will need to be done in order to get those funds released.

Additionally, if the former owner had a will and the family wants the surplus proceeds distributed based on the language of the will, then a probate will need to be done. Any time someone wants their property distributed based on their will, it must go through the probate process. You can’t just show up to the court and show the judge a will and say, “they left me this, give me my money.” This is especially true if the will wasn’t signed, witnessed, and notarized (self-proving wills need all three). In order to follow the language of a will, it MUST go through probate.

Lastly, it may be necessary to file a probate to absolutely establish who all the heirs are in the case of one of those shady third-party surplus recovery companies files a motion for surplus funds for someone that the rest of the family doesn’t know. This happens all the time. I currently have a case where I represent a sibling of a deceased party. There are about 12 family members who stand to receive a portion of the Florida Foreclosure Sale Surplus Funds. All of these family members are known. However, two different third-party surplus recovery companies have filed motions for surplus funds on behalf of “the only heir”. Mind you, these people are completely unknown to the family and the deceased party was not married and had no children. Your best bet is to only work with a qualified Florida Foreclosure Surplus or Tax Deed Surplus Attorney, like me. The attorneys who filed on behalf of the third-party surplus recovery companies are going to have to prove to the court why they believe their client should get the funds. However, they don’t have any proof. There will be a couple of embarrassed attorneys at that evidentiary hearing.

If you are unsure about whether a Probate is necessary for your Florida Foreclosure Sale Surplus or Florida Tax Deed Sale Surplus case, please give me a call for a free consultation. Whether a Formal Probate, a Summary Administration, or neither one is necessary for your Florida Foreclosure or Tax Deed Surplus Funds, you should always hire a qualified Attorney who can help you. I handle Foreclosure Surplus Funds and Tax Deed Surplus Funds cases in every County in the State of Florida, and I don’t get paid unless you do.

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