How Can a Former Spouse or Survivor Assert Entitlement to Surplus Funds Following the Owner’s Death or Divorce?

1. Detailed Answer

When a property owner in Colorado faces a tax sale or foreclosure of real estate, any proceeds beyond what’s owed (the “surplus funds”) remain on hold. Colorado law, under C.R.S. §38-38-103, requires the public trustee or sheriff to publish notice and safeguard these funds for one year. A former spouse or surviving spouse may have a right to those surplus funds if they hold a legal or equitable interest in the property. The process generally involves:

1. Identify the Sale and Surplus Amount. Confirm the sale date, sale price and record of excess funds in the county where the property lies. County public trustee or sheriff’s websites often list recent surplus fund notices.
2. Determine Your Legal Interest.
   • Former Spouse: If the divorce decree awarded you a property interest or an equalization payment tied to the property’s sale, you qualify as a claimant. Check the final judgment of dissolution for language granting you a share of future sale proceeds.
   • Surviving Spouse: If you were married at the time of death and had a spousal property right—via joint tenancy, tenancy in common, homestead exemption, or elective share—you may claim surplus funds. Verify with the probate court or estate records (see C.R.S. §15-12-801).
3. Gather Supporting Documents. Required items typically include:
   • Final divorce decree clearly allocating property rights.
   • Death certificate and marriage certificate.
   • Probate court order or letters testamentary appointing personal representative (if estate still open).
   • Identification (driver’s license or state ID).
4. File a Claim With the Public Trustee or Sheriff. Submit a sworn “Demand for Surplus Funds” or similar form within one year of the published notice (C.R.S. §38-38-103(10)). Late claims may still be valid if funds have gone to the county treasurer, but you must then petition the county treasurer directly and satisfy the original judgment.
5. Attend a Hearing or Provide Additional Information. The trustee or sheriff may schedule a hearing or request extra documentation. Respond promptly to avoid disqualification.
6. Receive Payment or Appeal. Once approved, you’ll receive a check. If your claim is denied, you can file a motion in district court under the same statute to contest the decision.

2. Helpful Hints

• Search your county’s public trustee or sheriff website for “surplus funds” notices.
• Review your divorce decree carefully for specific language about sale proceeds or property division.
• Obtain certified copies of court orders and vital records early to avoid processing delays.
• Keep track of all filing deadlines: notice publication date triggers a one-year claim period.
• Consult probate dockets if the owner’s estate remains open, as that may affect your claim.
• Consider hiring a local attorney if the claim is contested or the documentation is complex.