How Can a Former Spouse or Survivor Claim Surplus Funds After the Owner’s Death or Divorce?
Detailed Answer
When a Vermont foreclosure sale yields more than the outstanding debt and costs, the lender must deposit the surplus with the court. 12 V.S.A. § 4633 requires the trustee to file those funds within 30 days of the sale. If the original owner has died or divorced before the surplus pays out, a former spouse or survivor may step forward to claim that money.
Here’s how to assert your entitlement under Vermont law:
- Determine Your Legal Interest: After divorce, property rights often arise from the final decree and any conveyance deeds. As a survivor, you need proof of your relationship—typically a death certificate and letters testamentary or an affidavit of heirship.
- Locate the Surplus Funds: Contact the clerk of the Vermont Superior Court, Civil Division, in the county where the property was located. Ask if a trustee deposited surplus funds under 12 V.S.A. § 4633 (https://legislature.vermont.gov/statutes/section/12/015/04633).
- File a Claim Motion: Draft and file a “Motion for Distribution of Surplus Funds.” Explain your interest, attach certified copies of your decree or estate documents, and cite 12 V.S.A. § 4633. Pay any required filing fee.
- Serve Notice: Vermont Rule 80.3(f) requires you to serve the foreclosing party and any other interested persons. Provide at least 30 days for objections.
- Attend the Hearing: The court sets a hearing date. Present your proof, answer any challenges, and request an order directing the clerk to disburse the funds to you.
- Collect Your Funds: Once the court signs the order, the clerk issues a check. If no one claims the funds within one year, they may escheat to the State under Vermont’s unclaimed property law, 27 V.S.A. ch. 105 (https://legislature.vermont.gov/statutes/chapter/27/105).
Helpful Hints
- Start early: Courts strictly enforce the one-year deadline before escheatment.
- Gather clear documents: Certified copies of divorce decrees, death certificates, wills, or letters of administration speed up approval.
- Verify service: Use certified mail or a professional process server to avoid service disputes.
- Keep records: Retain all filings, receipts, and correspondence in case of appeal or audit.
- Consult an attorney: If multiple claimants dispute your interest, legal advice can help you navigate contested hearings.