How sale proceeds are handled in Hawaii when a decedent’s home is sold

Short answer: Usually yes — if the house is part of your father’s probate estate, the personal representative (executor) sells the house, pays valid debts and administration costs, and then distributes the remaining money (the residue) according to your father’s will. But several important exceptions and steps can change that outcome.

Detailed answer — step by step (Hawaii law overview)

When someone dies in Hawaii, their assets fall into one of two categories: probate assets (controlled by the will and the probate court) and non‑probate assets (which pass automatically to co‑owners or named beneficiaries). If the parents’ home is a probate asset, the probate process controls what happens to the sale proceeds:

1. Appointment of personal representative. The court must appoint the personal representative named in the will (or an administrator if there is no valid will). That person has duty to collect assets, pay bills, and distribute what remains under the will. See Hawaii’s probate laws for the governing procedures: Hawaii Revised Statutes, Chapter 560 (Probate).
2. Sale of estate property (if needed). If estate debts, taxes, or expenses require liquid funds, the personal representative may sell estate property, including a house, under the Probate Code and any court order that the court requires. The representative must act in the estate’s best interest and generally must follow court rules for sale of real property during administration.
3. Payment of valid creditors and administration expenses. The representative must pay valid claims, funeral costs, administration fees, and taxes before distributing principal. Secured creditors (mortgages, liens) are paid out of the sale proceeds before unsecured creditors and beneficiaries.
4. Statutory claims that can reduce the residue. Certain statutory rights can reduce what beneficiaries receive. For example, surviving spouses and minor children may be entitled to homestead, family allowance, or other protections under Hawaii law. These rights can limit how much of the estate is available for distribution under the will. (See Hawaii probate provisions at the link above and consider consulting a probate attorney about specific spouse/children protections.)
5. Distribution of the residue under the will. After paying all allowed claims and expenses and honoring any statutory allowances, the representative distributes what remains according to the will’s instructions. If the will leaves the residue to named beneficiaries, they share the leftover money as the will directs.
6. If debts exceed assets. If valid debts and expenses exhaust the estate, beneficiaries usually receive nothing. The will does not create a personal obligation for beneficiaries to pay the decedent’s debts (beneficiaries are not personally responsible for estate debts unless they agree to assume them or there are particular statutory exceptions).
7. Non‑probate transfers. If the house was owned jointly with right of survivorship, held in a living trust, or had a transfer‑on‑death (TOD) designation, the property may pass outside probate. In those cases, sale proceeds may belong to the joint owner, trust, or named beneficiary and not be distributed under the will.

Common scenarios explained

Here are short answers for a few frequent fact patterns:

• House owned solely by your father, probate estate administers it: Sale proceeds are estate property. After debts and costs, the remainder distributes under the will.
• House owned jointly with your mother as joint tenants with right of survivorship: The property typically passed to the surviving joint owner at death and did not become part of the deceased parent’s probate estate. If the surviving parent sells later, the proceeds are their property, not paid out under the deceased parent’s will.
• House inside a living trust: The trust controls distribution, not the will.
• Sale happened while both parents were alive: The money from that sale belonged to the seller(s) at the time of sale. If both parents agreed to sell and received the funds jointly, the funds may not be estate assets of the deceased parent depending on how title and bank accounts were handled.

Key Hawaii resources and statutes

• Hawaii Probate statutes (general reference): HRS Chapter 560 — Probate
• Practical self‑help and court information on probate and guardianship: Hawaii State Judiciary – Probate & Guardianship Self‑Help

What you can do now — practical next steps

1. Ask the personal representative (executor) for a copy of the will, the inventory of estate assets, and an accounting showing the sale proceeds and payments made.
2. Check whether the probate case has been opened in the Hawaii courts (ask the executor or search the court online). If no probate case exists, ask why and who holds the proceeds.
3. Confirm title details: was the house held as sole owner, joint tenants, tenants in common, or in a trust? That controls whether the property was probate property.
4. Look for outstanding liens, mortgages, or tax obligations that could reduce the available funds.
5. If you suspect improper handling, request a formal accounting in probate court and consider consulting a Hawaii probate attorney promptly.

Helpful hints

• Get documentation: will, death certificate, deed, closing statement from the sale, bank statements showing where sale proceeds were deposited.
• Identify nonprobate assets (joint accounts, payable‑on‑death designations, trusts) — they likely pass outside probate.
• Ask for a written explanation of any statutory allowances paid to a surviving spouse (homestead, family allowance) that reduced distributions to beneficiaries.
• Keep timelines in mind: probate administration often takes months. Don’t assume immediate distribution after sale.
• If you are a named beneficiary and you believe the representative is not following the will or the law, you can petition the probate court for relief or request the court to compel an accounting.
• Consider hiring a probate attorney if the estate is large, complex, or if there is a dispute about the sale or distribution.

Disclaimer: This article explains general principles of Hawaii probate law for educational purposes only. It is not legal advice and does not create an attorney‑client relationship. For advice about your specific situation, consult a licensed Hawaii attorney experienced in probate and estate administration.