Detailed Answer

Short overview: If a home owned by a person who has died is sold, the person or entity who gets the sale money depends on who owned the house and whether the property is part of the decedent’s probate estate, a trust, or owned jointly. That ownership and the presence of liens or debts determine how the proceeds are distributed. This page explains how to find out, step by step, under Colorado law.

Disclaimer: This is general information, not legal advice. It is not a substitute for talking with a licensed Colorado attorney about your specific situation.

1. Identify who owned the house at the time of death

Ownership controls where the money goes:

• Sole ownership in the deceased’s name: The house is usually part of the probate estate. Proceeds from a sale are estate assets and must be handled by the personal representative (executor or administrator).
• Joint tenancy with right of survivorship: The surviving joint owner generally becomes sole owner automatically at the moment of death. Sale proceeds typically go to that survivor, outside probate.
• Tenants in common: The deceased’s share becomes part of the probate estate and its share of sale proceeds belongs to the estate.
• Trust ownership: If the home is titled in a living trust, the trust instrument controls distribution and the trustee handles sale proceeds according to trust terms.
• Transfer-on-death deed or beneficiary designation: If a valid transfer-on-death (TOD) deed or other beneficiary designation exists, the named beneficiary takes the property outside probate and receives sale proceeds subject to the instrument’s terms.

2. If the property is part of probate: what happens to the proceeds

When the house is estate property, the personal representative collects the sale proceeds into the estate. Under Colorado probate procedures, the representative must:

1. Use sale proceeds to pay secured debts and liens that attach to the property (mortgages, tax liens, mechanic’s liens). Title search and the closing statement will show these payoffs.
2. Pay reasonable estate administration expenses (attorney fees, court costs, appraisal and sale costs, funeral expenses where applicable).
3. Pay valid creditor claims that are filed against the estate within the statutory notice period.
4. Distribute any remaining funds to heirs or beneficiaries according to the will or, if there is no valid will, under Colorado’s intestacy rules and the probate statutes.

Colorado’s probate rules and the statutes governing wills, administration, and intestate succession are found in the Colorado Revised Statutes (Title 15). For an overview of those statutes, see the Colorado Revised Statutes (Title 15): https://leg.colorado.gov/content/colorado-revised-statutes-crs.

3. Practical steps you can take right now to find out exactly where the proceeds will go

Follow these steps in order. They are the fastest way to get a clear, documented answer.

1. Get a copy of the deed: Search the county recorder/assessor website where the property sits. The deed shows the current legal owners and how title is held (sole owner, joint tenants, tenants in common, trust, etc.).
2. Look for a will or trust document: Ask family members, the deceased’s lawyer, or check probate filings. If a will was filed in probate, the court file will show the appointed personal representative.
3. Check for an open probate case: Contact the county probate court or use the Colorado Judicial Branch online tools to see whether the estate is opened and who the personal representative is: Colorado Courts – Probate & Guardianship forms and info.
4. Ask the personal representative, trustee, or listing agent for the closing statement: The HUD-1 or Closing Disclosure shows exactly how sale proceeds were applied (payoff of mortgage, commission, closing costs, and net to the estate or seller). If you are an heir, beneficiary, or creditor, you may request that information from the estate representative.
5. Obtain a title search or preliminary title report: A title company can produce a report showing all recorded liens, mortgages, and encumbrances that must be paid from sale proceeds.
6. Request an accounting: If you are an heir or beneficiary and the estate is open, the personal representative must give a statutory accounting to beneficiaries showing receipts and distributions. If you do not receive one, ask the court or your attorney about compelling an accounting under applicable probate rules.
7. Check for rights that can reduce distribution: Homestead exemption, family allowances, or creditor priority rules can alter how much goes to heirs. For information about probate and these rules, review Title 15 of the Colorado Revised Statutes: https://leg.colorado.gov/content/colorado-revised-statutes-crs.

4. Common scenarios and how proceeds are handled

• Surviving joint owner sold the home: The sale proceeds normally go to the survivor (non-probate). Ask the county recorder to confirm the survivorship deed.
• Estate sold the home during probate: Proceeds enter the estate. The personal representative pays liens and creditors and then distributes per will or intestacy.
• House titled in a trust: The trustee sells and distributes net proceeds under the trust terms. Get a copy of the trust or contact the trustee.
• Sale authorized by power of attorney after death: A power of attorney ends at death and generally cannot validly transfer title after death. Money paid to someone acting under an invalid authority may be recoverable by the estate. Ask a lawyer if this might have happened.

5. When to get a lawyer

Consider consulting a Colorado probate or real estate attorney if:

• The ownership is unclear from the deed records.
• You are a beneficiary who has not been provided a closing statement or accounting.
• You suspect a lien, mortgage, or creditor claim will consume most or all proceeds.
• There is a dispute between heirs, or someone sold the property without authority.

Helpful Hints

• Start with the county recorder/assessor website to pull the deed and property tax records—those documents reveal current title and outstanding property taxes or liens.
• Ask for the Closing Disclosure or HUD-1 from the closing company. It lists each payoff and the net proceeds line-by-line.
• If the estate value is small, Colorado has simplified procedures (small estate processes). See the Colorado Courts probate resources: courts.state.co.us – Probate & Guardianship.
• Keep copies of communications and written requests for documents (deed, title report, closing statement). If you later need to involve the court, documentation helps.
• If you are a creditor, file a timely claim against the estate to preserve the right to be paid from estate assets.
• Remember that sales outside probate (joint tenancy, TOD deed, trust) often move proceeds outside the court process. A deed or trust controls in those cases.

If you want, provide the county where the house is located and any information about how title was held (e.g., sole name, joint names, in trust), and I can suggest your next specific steps to check records or find the correct documents to request.