Detailed Answer — What happens to leftover sale proceeds under Hawaii law

When someone dies without a will (intestate) in Hawaii, the legal process determines who inherits the decedent’s assets. “Leftover sale proceeds” means money received from selling property (for example, a house or car) that is still held by the decedent or in an account in the decedent’s name at the time of death.

1. Are the proceeds part of the probate estate?

Yes — if the sale proceeds are in the decedent’s name alone (for example, in a bank account, trust account, or remaining as closing funds), they typically become part of the decedent’s probate estate. The personal representative (executor or administrator) must collect those funds, pay valid debts and expenses, and then distribute the remainder according to Hawaii’s intestate succession rules. See Hawaii probate basics at the Judiciary’s page: Hawaii State Judiciary — Probate Self Help.

2. Are any proceeds non‑probate and pass outside probate?

Yes. Money that is held jointly with right of survivorship, payable‑on‑death (POD) or transfer‑on‑death (TOD) designations, certain trust accounts, or life insurance/retirement plan proceeds with a named beneficiary usually pass outside probate directly to the surviving co‑owner or beneficiary. Those funds are not distributed under intestate rules.

3. Who inherits if the proceeds are part of the probate estate?

If the funds are in the probate estate, Hawaii’s intestacy statute governs who inherits. Generally:

• If the decedent is survived by a spouse but no children or parents, the spouse typically receives everything.
• If the decedent is survived by a spouse and children (of the decedent), the estate usually divides between spouse and children, with shares depending on whether the children are also children of the surviving spouse.
• If there is no spouse or children, the estate may pass to parents, siblings, more distant relatives, or ultimately the State if no heirs can be found.

For the precise rules and ordering of heirs, see Hawaii’s intestate succession provisions: Hawaii Revised Statutes — Chapter 560 (Intestate Succession). (If you need the exact section on who inherits, review the Chapter 560 provisions.)

4. Who administers distribution and how long does it take?

A personal representative (appointed by the probate court) gathers assets, notifies creditors, pays valid claims and taxes, and distributes the net estate to heirs. Probate timelines vary: simple estates can close in months, complex ones can take a year or more. Small estate procedures may allow faster distribution when the estate value is under a statutory threshold — check Hawaii law and local rules.

5. Practical examples (hypotheticals)

Example A — Proceeds held in decedent’s bank account: Sarah sells her condo and leaves the sale proceeds in a bank account titled only in her name. She dies intestate. The bank freezes the account and the personal representative must open probate, collect the funds, pay debts, then distribute the net amount under Hawaii’s intestacy rules.

Example B — Proceeds paid to joint owners or POD account: John and Mary hold the home in joint tenancy. They sell the home and put the sale proceeds into a bank account titled as “John and Mary, joint tenants.” If John dies first, Mary automatically becomes sole owner of the account and those funds pass to her outside probate.

6. Taxes and creditor claims

Outstanding debts and final income or estate taxes generally come out of the estate before distribution. The personal representative must follow creditor notice and claims procedures under Hawaii law before distributing leftover proceeds to heirs.

7. When heirs cannot be located

If no heirs are found after reasonable search, Hawaii law allows the court to order property escheat to the State. The personal representative or interested parties should follow statutory heir‑search procedures and court guidance to avoid escheat.

8. Where to find the relevant Hawaii statutes and forms

Hawaii Revised Statutes — Chapter 560 covers intestate succession and related probate rules: HRS Chapter 560. For probate procedures and local court forms, see the Hawaii Judiciary self‑help and probate pages: Hawaii State Judiciary — Probate Self Help.

Important note: The above is a high‑level summary. Different facts (joint ownership, account naming, beneficiary designations, trusts, or outstanding liens) can change how proceeds pass at death.

Helpful Hints — What you should do now

• Preserve records: Keep closing statements, bank statements, account titles, beneficiary forms, and sale contracts.
• Check account titling and beneficiary designations: See whether funds were held jointly or had POD/TOD beneficiaries — those funds may pass outside probate.
• Contact the bank or title company: Ask whether the account or funds are frozen and what documents they require to release funds.
• Determine whether probate is required: If proceeds are held solely in the decedent’s name, probate is often necessary. Ask the court or an attorney about small estate procedures if the amount is small.
• Locate heirs early: Gather family records and use heir‑search resources to avoid delays or escheat risk.
• Talk to a probate attorney when in doubt: An attorney can advise on intestacy distribution, creditor notices, tax obligations, and court filings specific to Hawaii.
• Act promptly on creditor notices: The personal representative must follow statutory notice periods to avoid personal liability.

Disclaimer: This article explains general concepts of Hawaii law and is educational only. It is not legal advice and does not create an attorney‑client relationship. For legal advice about a particular situation, consult a licensed Hawaii attorney.