I’m a Beneficiary of the Owner of a Foreclosed Property: Can I Obtain Proceeds from the Sale of the Property?

Manfred Sternberg • Jun 01, 2023

I’m a Beneficiary of the Owner of a Foreclosed Property: Can I Obtain Proceeds from the Sale of the Property?

When a loved one dies, it can be challenging to settle the details of their estate while you’re grieving. If a lien holder recently foreclosed on property owned by your loved one, it can make the entire process even more complex. As the beneficiary of their estate, you may be entitled to recover any excess funds from selling that property. But it’s important to understand your rights to ensure you don’t lose those assets.

Foreclosed Property Sales in Texas

If a property or asset owner in Texas has unpaid liens, such as a mortgage in default or a mechanic’s lien, the lien holder can sometimes force the sale of the property to satisfy those liens. This happens by petitioning the court or a trustee. The court or a trustee then orders the sale of the property after notice to the property owner and the public. Foreclosure sales are open to the public and typically happen at the county courthouse on a set day each month.


What Happens to Excess Proceeds?

After the property sells, the original lienholder can only receive the amount of their lien on the property and the costs of the foreclosure and the sale. The amounts over that total are known as “excess funds.” The former property owner can   typically receive those excess funds   after petitioning the court or the trustee for the sale.


If the former owner is now deceased, the beneficiaries of their estate may be entitled to recover the excess funds. An attorney for the estate or its eligible heirs generally files a petition with the District Court in the county where the property was sold. The court then determines if and how to  distribute the excess funds under Texas law.


In Texas, you have two years from the property sale date to recover excess funds. If the estate or its beneficiaries don’t petition the court or the trustee for those funds within two years, you can lose the ability to recover that money.


You Need an Experienced Surplus Funds Recovery Attorney

If you’re the beneficiary of a deceased property owner after a recent foreclosure, the estate may be entitled to receive any excess funds from that sale. But it’s important to understand your rights and the time limits involved. That’s why you need an experienced lawyer to ensure you and the deceased’s estate can recover the excess funds quickly and efficiently. The experienced attorneys at Manfred Law can help. Find out what they can do for you. Call Manfred Law at  or contact us online to take the next step forward.

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