Detailed Answer
When a property owner dies or divorces, surplus funds can arise if a sale of real estate (through tax foreclosure, probate or court order) generates more money than outstanding liens. A former spouse or survivor must follow New Mexico law to claim these funds. Below are key pathways and steps under New Mexico statutes.
1. Surplus Funds After Tax Foreclosure Sale
Under New Mexico’s tax foreclosure process, the county treasurer sells property for unpaid taxes. If the sale price exceeds total liens (taxes, interest, fees), the excess becomes “surplus funds.” To claim these funds, an interested party must:
- File a written claim with the county treasurer within three years of the sale. Include proof of interest (e.g., marriage certificate, divorce decree, heirship documents).
- If multiple claimants exist, petition the district court in that county to determine priority and distribute proceeds.
(See NMSA 1978, § 7-38-64.)
2. Surplus Funds in Probate Sales
When an estate sells real property during probate, the personal representative must satisfy valid liens and expenses. Any remaining balance is part of the estate assets:
- Heirs or surviving spouses should file a verified petition in probate court to request distribution of surplus sale proceeds.
- The court issues orders allocating funds according to New Mexico’s intestate succession rules or the decedent’s will.
- If the personal representative refuses distribution, interested parties may file a motion for contempt or surcharge.
(See NMSA 1978, § 45-3-702.)
3. Property Division and Post-Divorce Claims
In divorce proceedings, New Mexico treats property acquired during marriage as community property. A court divides community assets equitably:
- Former spouses must include all real estate and potential surplus funds in their disclosure statements.
- After entering a decree, a former spouse may enforce the property division order by filing a motion under Rule 1-060(B) NMRA to correct or enforce the judgment.
- If surplus proceeds from a sale remain unpaid, file an application in the district court for enforcement of the decree.
(See NMSA 1978, § 40-3-8 and NMRA Rule 1-060(B).)
Across all scenarios, timely action is critical. Statutory deadlines vary from months to years. Missing a deadline can forfeit your claim.
Helpful Hints
- Gather documentation early: marriage certificates, divorce decrees, death certificates, probate documents and any lien payoff statements.
- Contact the county treasurer’s office where the sale occurred to check for unclaimed surplus funds.
- File claims in writing and keep certified mail receipts or proof of electronic filing.
- Consult the district court clerk for procedures on filing petitions or motions in your county.
- Consider hiring a local attorney if multiple claimants dispute priority or if deadlines are tight.
- Track all deadlines carefully—tax sale claims often expire three years after the sale; probate claims follow court schedules; divorce enforcement uses post-judgment timelines.