How to claim surplus funds after a foreclosure of a deceased parent’s property (Colorado)

Short answer: First confirm that a surplus (excess proceeds) exists. Then locate the foreclosure trustee or public trustee who handled the sale and present proof that you are entitled to the funds. If the decedent’s estate was never probated, you will likely need either a personal representative appointed by the probate court or to use Colorado’s small-estate/collection procedures before the trustee (or a court) will release the money. If the trustee refuses or competing claimants exist, you may need to file a court action to recover the funds.

This is general information only and not legal advice. Consult a Colorado attorney for advice about your specific situation.

Detailed answer — step-by-step under Colorado law

1. Confirm a surplus and identify who holds it

Not every foreclosure sale produces money above what the foreclosing lender is owed. A trustee or public trustee sells the property, pays the lender and lienholders first. Any remaining amount is a surplus (sometimes called excess proceeds). Start by obtaining:

• A copy of the trustee’s deed or the public trustee’s sale record.
• The sale statement or accounting that shows proceeds and distributions.

Contact the trustee or public trustee who ran the sale. In Colorado foreclosures are governed by the deed-of-trust statutes and trustee sale procedures in Title 38 of the Colorado Revised Statutes (see Title 38: Real and Personal Property). The trustee or sale agent can tell you whether a surplus exists and whether they will accept claims for it.

Reference: Colorado Revised Statutes, Title 38 (real property/foreclosure rules) — see Colorado Revised Statutes, Title 38: leg.colorado.gov – Title 38 (PDF).

2. Determine who is legally entitled to the surplus

At sale closing, surplus proceeds belong to the owner of the foreclosed property or that owner’s estate. If the owner (your parent) died before the sale and no probate was opened, the surplus is still part of the deceased’s estate. The person who can legally claim the dollars is either:

• The personal representative (executor/administrator) appointed by a Colorado probate court, or
• A person authorized under Colorado’s small-estate or collection rules (if the estate qualifies), or
• A person who obtains a court order directing distribution of the surplus (for example, a civil action or probate appointment).

3. If the estate was never probated: choose the right route

Colorado has options for collecting estate assets without full probate in some cases. Typical choices:

1. Open a probate case (formal or informal) in the county where your parent lived or owned property. Once the court appoints a personal representative (executor/administrator), that representative can present letters testamentary or letters of administration to the trustee and collect the surplus.
2. Use Colorado’s simplified collection procedures for small estates or collection of personal property, if the estate qualifies. These procedures let certain heirs collect estate assets without full probate. See Colorado’s probate statutes (Title 15 of the Colorado Revised Statutes) for details about collection by affidavit and small-estate procedures.
3. If the trustee refuses to release funds or there are competing claimants, petition the district court to determine the entitlement and order distribution of the surplus.

Reference: Colorado Revised Statutes, Title 15 (probate) — see leg.colorado.gov – Title 15 (PDF).

4. Documents you will likely need

To claim surplus funds you will usually need:

• Certified death certificate of the decedent.
• Copy of the trustee sale documents and sale accounting showing the surplus.
• Proof of your relationship to the decedent (birth certificates, marriage certificates, family records) if you claim as an heir.
• If available, a copy of the decedent’s will and any probate paperwork.
• If you opened probate: letters testamentary or letters of administration from the Colorado probate court.
• If using a small-estate affidavit: the sworn affidavit and any supporting documentation the statute requires.

5. How to present a claim to the trustee

1. Send a written claim and copies of supporting documents to the trustee or the public trustee’s office that handled the sale. Include a certified death certificate and your proof of entitlement.
2. Ask for a written accounting of the sale and distributions. Get a receipt for any documents you deliver.
3. If the trustee requires letters from a probate court, you may have to open probate or secure a small-estate affidavit first.

6. If the trustee refuses or other parties contest the funds

If the trustee refuses to pay, or if other parties (creditors, other heirs, lienholders) contest the surplus, the usual remedy is a court action. Possible court steps include:

• Opening probate and asking the court to order the trustee to release the funds to the estate.
• Filing a civil claim in the Colorado district court that asks the court to determine ownership of the surplus and order distribution.
• Asking the court to appoint a receiver or to allow an interpleader if multiple claimants exist.

These actions have procedural rules and deadlines. If a dispute arises, consult a Colorado attorney promptly.

7. Deadlines and unclaimed property

Time limits can matter. If the trustee cannot locate a rightful claimant, funds may be handled according to state unclaimed property rules. Colorado’s unclaimed property process is administered by the State Treasurer. If surplus proceeds are deposited as unclaimed property, heirs may need to file a claim with the Colorado Treasury’s Unclaimed Property Division.

Colorado Unclaimed Property: colorado.gov – Unclaimed Property

Helpful hints

• Start by contacting the trustee or public trustee who handled the sale. They have the sale accounting and can say whether surplus exists.
• Get a certified death certificate early. Most claimants must provide it.
• If the estate value is small, review Colorado’s small-estate/collection procedures before opening full probate — this can save time and cost. See Title 15 of the Colorado Revised Statutes for the probate collection rules: leg.colorado.gov – Title 15 (PDF).
• Collect and keep copies of all foreclosure sale documents, mailing notices, the trustee’s accounting, and any correspondence. Paper trails matter in disputes.
• If multiple children or claimants exist, avoid unilateral distribution. A court-supervised distribution or written agreement among heirs protects everyone.
• If funds have been transferred to the State Treasury as unclaimed property, file a claim with the treasury rather than with the trustee.
• If creditors assert claims against the estate, a probate court can weigh priorities and ensure lawful distribution of the surplus.
• Consider an initial consultation with a Colorado probate or real estate attorney to confirm deadlines and the most efficient path (probate vs. small-estate collection vs. civil action).

When to hire an attorney

Talk with a Colorado attorney if:

• There are competing heirs or creditors who claim the funds.
• The trustee refuses to release funds and demands probate letters you cannot obtain without court intervention.
• The amount of surplus justifies the cost of a formal probate or lawsuit.
• You need help preparing a small-estate affidavit or filing a court petition to recover the funds.

Final note: Every case is fact-specific. This guide explains common steps and Colorado statutory paths (see Titles 15 and 38 of the Colorado Revised Statutes). If you are unsure which path fits your situation, contact a Colorado lawyer experienced with probate and foreclosure-surplus claims.

Not legal advice. This article is informational only.