Detailed Answer
When a property undergoes a foreclosure sale in Illinois, any sale proceeds exceeding the amounts owed create surplus funds. Under the Code of Civil Procedure, surplus funds remain with the court-appointed trustee until claimed by an entitled party (735 ILCS 5/15-1506(c)).
If the foreclosed property was solely in the deceased spouse’s name, the surplus becomes an asset of the decedent’s estate. Only persons with a legal interest in the estate—typically the personal representative, beneficiaries named in a will or, absent a will, heirs at law—can claim these funds.
1. Appointment of Personal Representative: To access estate assets, including surplus proceeds, someone must serve as personal representative. An interested party petitions the local probate court under the Illinois Probate Act (755 ILCS 5/2-1 and 755 ILCS 5/6-13).
2. Claim Procedure: Once appointed, the personal representative files a claim for surplus proceeds with the foreclosure trustee or proceeds court. Illinois law generally allows up to four years from the sale date to claim surplus funds (735 ILCS 5/15-1506).
3. Distribution of Funds: After claiming, the personal representative disburses surplus proceeds to beneficiaries according to the decedent’s will. If there is no will, the personal representative distributes funds under Illinois intestate succession rules. A surviving spouse may inherit all or part of the estate depending on surviving issue (755 ILCS 5/2-1).
Helpful Hints
- Initiate probate promptly to avoid missed filing deadlines.
- Obtain a certified death certificate and letters of office for the personal representative.
- Review the decedent’s will, if any, to identify named beneficiaries.
- Understand intestate succession: a surviving spouse often inherits first, followed by children and other relatives.
- Note the four-year deadline to claim surplus proceeds under 735 ILCS 5/15-1506.
- Consult a local probate or real estate attorney for complex estates or multiple heirs.