Detailed answer — how surplus proceeds are handled under Arkansas law

When a property is sold (for example, after a foreclosure or a forced sale) the sale proceeds first pay the costs of sale, any mortgages, liens, and other senior claims. Any money left over after those claims are paid is called the surplus (or overage). If the property owner who was entitled to that surplus dies without a will, the surplus becomes part of the decedent’s estate and must be distributed under Arkansas’s intestacy rules.

Key points under Arkansas law:

• Ownership of the surplus: The surplus is an asset of the decedent’s estate. It does not automatically go to the lender or to the purchaser of the property once the decedent dies. It remains the decedent’s money until distributed.
• Who inherits: If the decedent left no surviving spouse and no descendants (children, grandchildren), Arkansas’s intestacy rules direct the estate to the decedent’s next heirs — starting with parents, then siblings and their descendants. Practically, if the parents are deceased and siblings survive, the siblings (or their children if a sibling predeceased the decedent) will inherit the surplus under the intestacy provisions. See Arkansas intestacy rules in Title 28 of the Arkansas Code for specifics: https://www.arkleg.state.ar.us/ArkansasCode
• How shares are calculated: If siblings inherit, the usual approach is that surviving siblings share the estate. If a sibling died before the decedent but left children, those children typically step into the position of their parent and take that parent’s share (representation). The exact distribution method (per capita or representation at each generation) and how to handle half-siblings can affect shares; the Arkansas Code sets out the precise formulas and order of priority (see Title 28, Estates & Trusts): https://www.arkleg.state.ar.us/ArkansasCode
• How heirs actually receive the money: Heirs must identify and claim the surplus. Often the surplus is held by a county official (for example, the sheriff, the clerk of court, or the court registry) or by the entity that handled the sale. To get the funds, someone needs legal authority to collect it for the estate — typically an executor named in a will or, where there is no will, an administrator appointed by the probate court.

Typical steps to recover and distribute surplus proceeds in Arkansas when the decedent died intestate:

1. Locate the funds: Contact the county clerk, sheriff, or the entity that conducted the sale to learn where the surplus is being held and what documents they require to release it.
2. Open an estate administration (intestate probate): A family member (often a sibling when no spouse/descendants exist) files a petition with the county probate or circuit court asking to be appointed administrator. The court issues letters of administration giving the administrator authority to collect estate assets, including surplus proceeds.
3. Collect and inventory assets: The administrator collects the surplus, pays valid debts and funeral expenses, and follows Arkansas probate procedures for notice to creditors and for administration. Statutory rules in Arkansas’s probate code control timing and notice requirements (see Title 28 of the Arkansas Code): https://www.arkleg.state.ar.us/ArkansasCode
4. Distribute according to intestacy: After debts and costs, the administrator distributes remaining assets to heirs according to Arkansas’s intestacy order — which, in many sibling-only cases, means equal division among surviving siblings, with deceased siblings’ children taking their parent’s share by representation.

If the estate is small, Arkansas may provide simplified procedures (small-estate affidavit or summary administration) that let heirs collect assets without full probate. Whether a simplified route applies will depend on the total value of the estate and the types of assets involved; check the Arkansas probate code or the county clerk for local thresholds and procedures (see Title 28: Estates & Trusts): https://www.arkleg.state.ar.us/ArkansasCode

If siblings cannot agree or there is uncertainty about rightful heirs, the probate court resolves disputes. A court can interpret intestacy rules, decide whether someone is an heir, and authorize distribution. In contested situations, heirs often retain an attorney to represent them in probate.

Useful Arkansas statute references and resources:

• Arkansas Code — Estates & Trusts (probate and intestate succession provisions): https://www.arkleg.state.ar.us/ArkansasCode
• County circuit court or clerk’s office (for local procedures about sale surplus and probate filings) — check the county’s official website or contact the circuit clerk.

Disclaimer: This article explains general principles under Arkansas law and is for educational purposes only. It is not legal advice. For guidance about a specific situation, consult a licensed Arkansas attorney experienced in probate and estate matters.

Helpful Hints — practical checklist for siblings when a deceased owner left surplus proceeds

• Get a certified copy of the death certificate.
• Find documentation about the sale: deed of sale, sheriff’s return, or foreclosure paperwork showing the sale and any recorded surplus.
• Contact the county official holding the surplus (sheriff, circuit clerk, or court registry) and ask what paperwork they require to release funds.
• Check whether the estate qualifies for a simplified/small estate procedure to avoid full probate — ask the county clerk for thresholds and forms.
• If probate is needed, file for appointment as administrator (or ask a sibling to do so) and obtain letters of administration before trying to collect the funds.
• Collect and preserve records: invoices, lien payoff statements, and creditor notices — these affect how much remains for heirs.
• If a sibling predeceased the owner leaving children, gather proof of the child’s relationship (birth certificates) so the court can apply representation rules correctly.
• If siblings disagree about distribution or there are suspected other heirs, consider getting probate counsel to avoid mistakes that could cost time or money.
• Act promptly. Some claims can be subject to time limits or administrative rules that make it harder to recover funds if delayed.