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Foreclosure Surplus Funds – How are the Surplus Funds Split When Family Members Don’t Agree?

How are Florida Foreclosure Sale Surplus Funds distributed to multiple family members if they don’t all agree on who should get the funds? That is a complicated question. The usual lawyer response is, “it depends”. There are many factors involved in distribution of Florida Foreclosure Sale Surplus Funds if there is some contention as to who the funds are supposed to go to.

The easiest is if the heirs are the children of a deceased person who lost the property to foreclosure sale. This means that by intestate (without a will) the surplus funds go to the child(ren) of the deceased. Florida Statute 45.033(2)(b) states, “An involuntary transfer or assignment may be as a result of inheritance.” Often if the heirs are readily known and are in agreement, then the court will (most often) grant the motion for surplus funds with just a simple hearing. However, if there is some contention as to who the proper heirs are, an evidentiary hearing or a probate may be necessary.

The purpose of an evidentiary hearing could be to determine who the actual heirs are. If the property was owned by a married couple who had children outside of that marriage, you may need to determine who actually gets the surplus funds by looking at the law. Generally speaking, when a married couple purchase a property together, their ownership is presumed to be as Tenants by the Entirety unless it is expressly stated otherwise. This sort of ownership provides for a “Right of Survivorship”, meaning that when one person dies, the whole of the property ownership goes to the other person. For instance, if husband dies before wife (whether by years or by minutes) and they owned the property together, then the wife gets full ownership of the property. This means that if husband had children prior to the marriage, those children cannot inherit the property from their father as the ownership went entirely to the wife. When the wife dies, the property goes by intestate succession to her children from either during or prior to the marriage. Unfortunately, the stepchildren cannot get anything from their stepmother unless she as formally adopted them.

It can get a little more complicated than that. If someone died and there were Florida Foreclosure Sale Surplus Funds, but this person didn’t have any children or a spouse, who gets the surplus funds? The laws of intestate succession state that it would first go to the deceased’s parents, if still alive. If his parents aren’t alive, then it goes to his brothers or sisters or if they are deceased as well, to their children, and so on. If there are no family members at all, then the surplus funds go to the Florida Unclaimed Funds and eventually to the School System.

If there are a great number of heirs and it gets confusing to the court, the judge may decide that she needs a hearing to determine the heirs. This type of evidentiary hearing means that all parties involved will be able to present their evidence of ownership of the Florida Foreclosure Surplus Funds and the judge will make a decision. If the judge believes that it is all too complicated, she could require a probate to be opened where another court will decide how the funds will be distributed. This also happens in the case of Tax Deed Sale Surplus Funds. Some counties will require a probate to be done even if all the heirs are easily known and have provided proof of kinship.

Any way you look at it, you will always have a better chance of being able to retrieve your Florida Foreclosure Sale Surplus Funds if you speak to a qualified Attorney. I handle Foreclosure Sale Surplus Funds and Tax Deed Sale Surplus Funds in every County in the State of Florida. I can help you to determine whether a probate is necessary, an evidentiary hearing, or if it will just be a simple case. Please give me a call for a free consultation. And remember, I don’t get paid unless you do.

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