Detailed Answer

When a Delaware property owner dies or the title is split by divorce, a court-ordered sale (for example, under a judgment or partition) can yield proceeds above the secured debts. Delaware law calls these excess proceeds “surplus funds.” A former spouse or surviving spouse may have a right to claim them. Below is an overview of the legal framework and steps to assert that right.

1. Statutory Framework

• Under 10 Del. C. § 3904, the sheriff or levying officer pays creditors in priority order. Any remaining balance—the surplus—must go to “the defendant or any other person lawfully entitled.”
• 10 Del. C. § 3905 authorizes parties to apply to the Superior Court for distribution of those surplus funds.
• Civil Rule 69(a) supplements this process by directing how execution sales and surplus distributions must proceed.

2. Grounds for a Former Spouse’s Claim

In a divorce, the court enters a Marital Settlement Agreement or Decree dividing assets. If that decree awards an interest in real property or its sales proceeds, the former spouse becomes “lawfully entitled” to claim any surplus funds.

3. Grounds for a Survivor’s Claim

Upon death, an owner’s interest passes by will or by intestacy to heirs or a surviving spouse. The fiduciary (executor or administrator) handles claims. If surplus funds arise from a court-ordered sale of the decedent’s real estate, the executor may claim the funds, then distribute them under Title 12, Chapter 39, Delaware’s probate statutes.

4. Step-by-Step Claim Process

1. Obtain a certified copy of the Sheriff’s report of sale and the recorded deed showing surplus funds.
2. Gather supporting documents: divorce decree or marital settlement (for former spouse); death certificate and Letters Testamentary or Administration (for survivor).
3. File an Application for Distribution of Surplus Funds under 10 Del. C. § 3905 in the Superior Court where the sale occurred.
4. Serve notice on all creditors and other potential claimants, as required by Civil Rule 69(a) and the statute. Delaware law typically requires 10 days’ notice by mail.
5. Attend the court hearing. Present your title to the funds and demonstrate your entitlement under the divorce decree or probate documents.
6. If the court approves, the clerk will issue an order authorizing the sheriff or court officer to pay you the surplus.

Timing is critical. Under Civil Rule 69(a), you generally must file a claim within one year of the sale, though courts may allow later claims for good cause. Consult an attorney promptly to protect your rights.

Helpful Hints

• Confirm the sale date and the amount of surplus funds with the Sheriff’s office.
• Review your divorce decree or probate documents for specific language granting you rights to sale proceeds.
• Keep certified copies of all documents; courts require originals or certified copies.
• Serve all parties properly and file proof of service to avoid delays or objections.
• File your application early. Delaware courts strictly enforce deadlines.
• Consider hiring a local attorney with experience in surplus fund claims and probate or family law.