How Are Excess Proceeds Distributed Under A Valid Will Versus By Intestate Succession in Texas

Welcome to the blog of the Law Office of Victor D. Walker, P.C. In this blog post, we’ll be discussing how Excess Proceeds are distributed to petitioners who file a claim in a Texas District Court based on a valid Last Will and Testament (i.e. Will probated in court) versus intestate succession.

First, let’s define what Excess Proceeds are. Excess Proceeds refer to the remaining funds after the sale of a property that was foreclosed on due to delinquent mortgage payments or delinquent property tax payments. Excess Proceeds created by a financial institution property foreclosure typically is held by the foreclosing financial institution, mortgage servicer or their foreclosure law firm. In Texas, these excess proceeds are held by the County District Court’s registry until they can be distributed to the rightful claimants.

Typically, there is a two year statute of limitations from the tax sale date in order to be eligible to file a claim for the Excess Proceeds held in the court  registry. Otherwise, if a claim is not filed within two years of the property tax sale foreclosure date, the excess proceeds typically are permanently lost by the claimants, kept by the court registry and distributed to the various taxing entities involved in the foreclosure lawsuit.

Last Will and Testament

If the property owner passed away and left a valid Last Will and Testament, the distribution of excess proceeds will be based on the instructions in the Will. Eligible heirs of the Decedent (i.e. surviving spouse, children, siblings, surviving parents, etc.) or their legal representation will file a claim with the County District Court in which the property was located, and the excess proceeds will be distributed according to the instructions in the will.

Texas Intestate Succession

If the property owner passed away without a will, also known as dying intestate, the distribution of excess proceeds will be based on the Texas intestacy laws. The heirs of the deceased will file a claim with the County District Court’s, and the excess proceeds will be distributed among them according to the intestacy laws. Intestate succession and distribution guidelines in Texas can be complex and are based on the Texas Estate Code and the Texas Probate Code depending on when the former property owner passed away. At the same time, intestate succession distribution of excess proceeds to the heirs and descendants of the former property owner can significantly deviate based on whether the property was community property or separate property.

The Court Process

It’s important to note that the distribution of excess proceeds can be a complex process, especially if there are multiple claims filed for the excess proceeds held in the District Court’s registry by different heirs, taxing entities or third-party creditors of the former property owner or the claimants. The County District Court’s will typically hold a hearing to determine the rightful claimants and the distribution of the funds.

A claimant’s petition must clearly provide supporting evidentiary documents that support their relationship to the former property owner and show how they are eligible for the amount of excess proceeds they are claiming. If the claimant’s petition is supported by a valid Will of the former property owner, then the claimant must show the court the beneficiary distribution instructions.  On the other hand, if the claimant’s petition is based on Texas intestacy law, the claim must include supporting documents (i.e. affidavits, determination of heirships probate court orders, genealogy, etc.) and the amount requested must be calculated and confirmed based on intestate succession and distribution guidelines in the Texas Estate Code or Texas Probate Code.


In conclusion, the distribution of excess proceeds in Texas District Courts to each individual claimant is based on the instructions in a valid Last Will and Testament or Texas intestacy laws. If you believe you may be entitled to excess proceeds from a foreclosed property in Texas, it’s important to seek the guidance of an experienced property tax, probate or real estate attorney.

Our Law Firm

The Law Office of Victor D. Walker, P.C. is experienced in all facets of real estate foreclosures, probate and delinquent property tax foreclosure litigation. Our law firm can help you navigate the complex legal process, ensure that your rights are protected and, we can promptly prepare, file, present in Court and recover excess proceed claims for you and your family heirs. If you have any questions about the excess proceeds recovery process or if you need legal representation to file an excess proceeds claim for you in a Texas District Court, please don’t hesitate to contact us at (713) 724-5300.

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