Probate is how a court validates a person’s will, oversees payment of their debts and taxes, and transfers what’s left to the people entitled to inherit. So how does probate work in practice? Most cases follow the same sequence — file a petition, get the executor appointed, notify creditors, pay debts and taxes, account to the beneficiaries, and distribute the remainder — and most wrap up in six months to a year. Contested or complicated estates run longer.
Not everything a person owned goes through this process. Understanding what does and doesn’t is the first step in figuring out how much of it you actually face.
What Property Actually Goes Through Probate
Probate only touches assets held in the deceased person’s individual name with no beneficiary attached. A large share of a typical estate passes outside the process entirely:
- Real estate or accounts held in joint tenancy with right of survivorship pass to the surviving co-owner automatically. Tenancy by the entirety, available only to married couples, works the same way.
- Payable-on-death bank accounts and transfer-on-death brokerage accounts go directly to the named person.
- Retirement accounts and life insurance with a named beneficiary pay out without court involvement.
- Assets held in a revocable living trust pass under the trust’s terms.
Beneficiary designations override the will. If your will leaves a retirement account to your sibling but the account form still names your ex-spouse, the ex-spouse collects.
Small Estate Shortcuts
Every state offers a simplified route for estates under a certain value. The most common tool is a small estate affidavit — a sworn statement filed with the court or presented directly to the bank or other institution holding the asset. No court-appointed representative, no formal inventory, no published creditor notice. The dollar threshold ranges from a few thousand dollars to over $150,000 depending on the state, and some states limit the procedure to personal property and exclude real estate. Check the rules in the state where the person lived before assuming the estate qualifies.
Opening the Case
A full probate case starts with paperwork. The court will want the original signed will, not a photocopy, though a small but growing number of states now accept electronic wills. If the original can’t be found, the court may presume it was intentionally destroyed, and heirs would need to prove otherwise.
You’ll also need certified copies of the death certificate, available through the funeral home or your local vital records office. Banks, insurance companies, and government agencies each ask for their own, so ordering six to ten is a reasonable starting point.
Before filing, compile an inventory of everything the deceased owned in their individual name: real estate, bank and brokerage accounts, vehicles, and valuable personal property. Record property addresses, account numbers, and rough values. Alongside it, list all potential heirs and beneficiaries with full names, current addresses, and their relationship to the deceased. That information goes into the petition.
The petition is filed with the court clerk in the county where the deceased person lived. Filing in the wrong county causes delays or a transfer, so verify residence first. The filing fee varies by jurisdiction, commonly landing between a few hundred and over a thousand dollars.
Once the clerk schedules a hearing, all listed heirs and beneficiaries must receive formal notice. At the hearing, the judge reviews the will’s validity and the qualifications of the person nominated to serve as executor. Absent objections, the court issues Letters Testamentary. Those letters are what banks and other institutions will demand before releasing information or transferring assets.
The Executor’s Job
The appointment carries real legal weight. As executor, you owe a fiduciary duty to the estate and its beneficiaries: act in good faith, avoid conflicts of interest, and never mix your personal funds with estate money. Play favorites, spend estate funds on yourself, or ignore the will’s instructions, and a beneficiary can ask the court to remove you and hold you personally liable for the losses.
A probate bond is a form of insurance that protects beneficiaries if the executor mishandles assets. Many wills waive the bond, and if all beneficiaries agree, the court will often honor the waiver. When a bond is required, it’s paid from the estate and typically costs a small percentage of the estate’s total value. The court can still require a bond even when the will waives it, for example when the executor lives out of state.
When There’s No Will
If a person dies intestate — without a valid will — probate still applies, but state law decides who inherits. Every state has an intestacy statute with a priority list. The details differ, but the general order is surviving spouse and children first, then parents, siblings, and more distant relatives.
The court appoints an administrator rather than an executor, usually the surviving spouse or closest willing relative. The administrator receives Letters of Administration instead of Letters Testamentary, but the duties are the same. The distribution follows the state’s formula, which may not match what the deceased would have chosen.
Notifying Creditors and Managing the Estate
Once the court grants authority, the executor notifies creditors that the estate is open. That means publishing a notice in a local newspaper, usually once a week for several consecutive weeks, and sending direct written notice to any known creditors like mortgage lenders or credit card companies. Creditors then have a limited window to file formal claims, commonly between two and six months depending on the state.
The executor should also open a dedicated estate bank account. The IRS requires estates to obtain their own Employer Identification Number, available at no cost on the IRS website.1Internal Revenue Service. Information for Executors Any income the estate earns — rent, dividends, interest — should flow through this account. Keeping funds separate protects the executor from accusations of mismanagement and simplifies the final accounting.
Most courts require a formal inventory of every estate asset and its fair market value as of the date of death. Filing deadlines vary, but 60 to 90 days after appointment is common. Publicly traded stocks can be valued from market data. Real estate, business interests, and unusual items may need a professional appraiser, whose fees come out of the estate.
Paying Debts in the Right Order
If the estate can’t cover everything it owes, the executor cannot pay whichever creditor asks first. Debts must be paid in a legally prescribed order. Secured debts like mortgages come first, since the lender has a claim on specific property. Funeral costs and administration expenses (court fees, attorney fees, appraiser fees) come next. Unsecured debts — credit cards, medical bills, personal loans — sit further down. If the estate runs out before reaching a category, creditors in that tier and below get nothing, and neither do beneficiaries. Pay out of order and the executor can be personally liable for the difference.
Tax Filings
Settling an estate can involve up to three separate tax returns. Missed deadlines create penalties and interest that come straight out of what beneficiaries receive.
The executor files a final individual income tax return (Form 1040) for the deceased, covering January 1 of the year of death through the date of death. The usual deadlines apply — April 15 of the following year, unless extended.2Internal Revenue Service. Filing a Final Federal Tax Return for Someone Who Has Died A surviving spouse can file jointly for that year.
If the estate itself earns more than $600 in gross income during administration, the executor files Form 1041, the estate’s fiduciary income tax return.3Internal Revenue Service. Instructions for Form 1041 and Schedules A, B, G, J, and K-1 Income that passes through to beneficiaries is reported on their returns; income the estate retains is taxed at the estate level. The estate’s EIN is used on this return.
Federal estate tax applies only to estates that exceed the basic exclusion amount, which for 2026 is $15,000,000.4Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill Most estates fall well below that and owe nothing. Estates that do exceed it must file Form 706 within nine months of the date of death.5Internal Revenue Service. Filing Estate and Gift Tax Returns An automatic six-month filing extension is available, but any estimated tax owed must still be paid by the original deadline.
Executor Compensation
Executors are entitled to be paid for the work. Some states set compensation as a percentage of the estate’s value, commonly in the range of two to five percent and often on a sliding scale where larger estates pay a lower rate. Other states allow “reasonable compensation” and let the court decide if anyone objects. In evaluating a fee, courts look at the complexity of the estate, the time spent, any professional skills the executor brought to the job, and whether their management saved the estate money. The will itself may specify a fee. Compensation is paid from the estate before beneficiary distributions and counts as taxable income to the executor.
Final Accounting, Distribution, and Closing
Before distributing anything, the executor prepares a final accounting: a detailed report of every dollar received and every dollar paid, covering income earned, debts paid, administrative expenses, and taxes filed. Beneficiaries can review it. If they approve, distribution proceeds. If someone disputes the figures, the court holds a hearing.
Once the accounting is approved and taxes are paid, the executor distributes what remains according to the will, or under intestacy rules if there was no will. The last step is a petition for discharge, confirming that debts are paid, taxes are filed, and distributions are complete. When the judge signs the order of discharge, the case closes and the executor is released from further liability for their management of the estate.