To distribute property after someone dies, you work through a fixed sequence: confirm whether formal probate is required, get the court to recognize you as executor or administrator, inventory and value the assets, notify creditors and pay debts, file the necessary tax returns, and only then transfer what remains to the people entitled to inherit. An executor named in the will handles this. If there’s no will, the court appoints an administrator. Either way, the person in charge owes a legal duty to the estate and its beneficiaries and can be held personally responsible for shortcuts.
First, Check Whether You Even Need Probate
A surprising amount of property passes outside probate. Life insurance with a named beneficiary, retirement accounts like 401(k)s and IRAs, jointly held bank accounts, and anything with a transfer-on-death designation go directly to the named recipient regardless of what the will says. If the deceased person set up most of their wealth this way, there may be very little left to probate.
Every state also has a simplified small-estate process, usually handled by affidavit rather than a court case. The dollar cap varies widely. Some states set it at $25,000 or $30,000; others allow it for estates up to $100,000 or even $184,500. The affidavit route typically requires a waiting period after death and usually covers only personal property, not real estate. Where it works, you present the affidavit directly to the bank, DMV, or other institution holding the asset and collect it without opening a court case. That can save months and thousands in legal fees.
Get Court Authority to Act
If probate is required, file a petition in the probate court for the county where the deceased person lived. Submit the original will, if one exists, along with a certified death certificate. Filing fees run from a few hundred dollars to over a thousand, sometimes scaled to the estate’s value.
Once the petition is approved, the court issues the documents that give you power to act. With a will, these are called Letters Testamentary. Without one, they’re Letters of Administration. You will use them constantly. Banks, brokerages, title companies, and government agencies all want to see them before releasing information or transferring anything, and they often want originals. Order several certified copies up front.
The court will often require a surety bond, which protects beneficiaries if the estate is mishandled. The estate pays the premium, calculated as a percentage of its value. Many wills waive the bond, and adult beneficiaries can also agree to waive it. When the court requires one, the cost comes out of estate funds before any distribution.
Inventory and Value What the Deceased Owned
Build a complete picture of what the person owned. The court will require a detailed inventory: bank accounts with numbers and balances, investment accounts with share counts and values, real estate with addresses and legal descriptions, vehicles with make, model, and VIN, and personal property worth listing. This inventory is the foundation for everything that follows.
Don’t skip digital assets. Email, social media, cryptocurrency wallets, online financial accounts, and digital media libraries all have value or hold information the estate needs. Most states have adopted a version of the Revised Uniform Fiduciary Access to Digital Assets Act, which gives the executor legal authority to access these accounts. Cryptocurrency is particularly easy to miss when the deceased didn’t leave clear records of wallet credentials.
For real estate, antiques, fine art, and collectible vehicles, get a professional appraisal. A real estate agent can give a market estimate, but a licensed appraiser produces a more defensible number. Art and antiques can be appraised through auction houses or museum referrals. The target is fair market value as of the date of death, because that figure drives both any estate tax owed and the tax basis beneficiaries will inherit.
That inherited basis matters more than most people realize. Under federal law, when someone inherits property, the cost basis resets to the fair market value at the date of death. If the deceased bought a house for $150,000 and it was worth $450,000 when they died, the heir’s basis is $450,000. Sell the next year for $460,000, and the capital gain is $10,000, not $310,000. A solid date-of-death valuation protects beneficiaries from overpaying tax later.1Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent
Identify Everyone Entitled to Inherit
With a valid will, the job is finding the named beneficiaries, verifying identities, and collecting current addresses. Every named beneficiary and every legal heir must be formally notified that probate has been opened, even those the will leaves nothing to. Skipping that step invites a challenge.
Without a will, state intestacy law decides who inherits. The priority order generally starts with the surviving spouse, then children, parents, siblings, and more distant relatives. The surviving spouse’s share depends on whether there are also children and whether those children are from the current marriage. In many states following the Uniform Probate Code model, the surviving spouse takes the entire estate when all the deceased person’s children are also the spouse’s children. If the deceased had children from a prior relationship, the spouse’s share shrinks.
Spousal Rights That Can Override the Will
A surviving spouse has protections that the will cannot defeat. In most separate-property states, the spouse can claim an “elective share,” typically around one-third of the estate, even if the will leaves them less or nothing. If a spouse exercises this election, it can rewrite the distribution plan.
Community property states handle this differently. The surviving spouse already owns half of all property acquired during the marriage, so there is less need for an elective share statute. The estate controls only the deceased person’s half of the community property plus any separate property owned before the marriage or received as a gift or inheritance. Sort these categories carefully before distributing anything.
Pay Debts Before Distributing Anything
Before any beneficiary receives a dollar, the estate pays its debts. Notify known creditors directly and publish a notice in a local newspaper for anyone you don’t know about. The published notice triggers a deadline, typically three to six months depending on the state, after which creditors who haven’t filed a claim lose their right to collect. Waiting out that period before distributing is one of the most important things you do. Distribute too early and you may be personally liable if a legitimate creditor appears later.
Debts have a priority order set by state law. The general hierarchy puts administrative costs and court fees first, then funeral expenses, then taxes, then medical bills from the final illness, and finally general unsecured debts like credit cards. If the estate can’t pay everyone, lower-priority creditors get less or nothing. Follow the order strictly. Paying a credit card company before the IRS, for instance, can create personal liability.
Secured debts work differently. Mortgages and car loans are attached to specific assets and generally transfer with the property to whoever inherits it. If someone inherits a house with a mortgage, they inherit the mortgage too. The estate doesn’t have to pay off the loan before distribution unless the will directs it. Federal law protects heirs from lenders demanding immediate full payment when a mortgage transfers due to death, but the heir still needs to keep making payments or negotiate new terms.
File the Required Tax Returns
At a minimum, file the deceased person’s final individual income tax return on Form 1040, covering income from January 1 through the date of death. This return follows the normal individual rules: report all income, claim eligible deductions and credits, and pay any balance due.2Internal Revenue Service. File the Final Income Tax Returns of a Deceased Person
If the estate itself earns income after death, such as interest, dividends, rent, or gains from selling assets, and that income exceeds $600 in a tax year, you must also file Form 1041, the fiduciary income tax return. This treats the estate as its own tax entity and covers the period from the date of death until the estate closes. Income that passes through to beneficiaries is reported on Schedule K-1, which you distribute to each beneficiary for their own filing.3Internal Revenue Service. Instructions for Form 1041 and Schedules A, B, G, J, and K-1 (2025)
Most estates owe no federal estate tax, but you need to know the threshold. For 2026, the basic exclusion amount is $15,000,000 per individual, so estates below that figure owe no federal estate tax.4Internal Revenue Service. What’s New – Estate and Gift Tax Married couples can effectively double the exemption through portability, where the surviving spouse claims the unused portion of the deceased spouse’s exclusion. Estates that exceed the exemption file Form 706 and pay tax on the amount above the threshold at rates up to 40%. The return is due nine months after the date of death, with a six-month extension available. Some estates below the filing threshold still file Form 706 to elect portability for the surviving spouse’s benefit. Mishandling estate tax can produce personal liability for the executor and IRS penalties.5Internal Revenue Service. Estate and Gift Tax FAQs
Transfer Property to the Beneficiaries
With debts paid, taxes filed, and the creditor period expired, you can distribute. Different assets require different transfer methods, and getting the paperwork right matters because a sloppy transfer can create title problems that follow beneficiaries for years.
Real estate requires preparing and recording a new deed with the county recorder’s office. The deed type depends on the state and the circumstances, but it must clearly identify the estate as the grantor and the beneficiary as the new owner. Financial accounts are distributed by writing checks from the estate’s dedicated bank account, not from the deceased person’s original accounts. Stock and brokerage holdings move through the financial institution’s estate or transfer department, which will want copies of the Letters Testamentary and the death certificate. Vehicles transfer through the state’s motor vehicle agency, which typically requires the original title, the Letters, and the death certificate. Some states allow transfer by affidavit for vehicles below a certain value. Check with your local DMV before making the trip.
Before handing anything over, get a signed receipt and release from each beneficiary acknowledging they received their full share. This document is your best protection against future claims that something was missing or distributed unfairly. It doesn’t need to be elaborate, but it should describe what was distributed and include language releasing you from further liability for that distribution. A beneficiary who refuses to sign is a signal to talk to a probate attorney before proceeding.
Close the Estate
The last step is a complete accounting of the estate’s financial activity: every dollar that came in through asset sales, income, or account closures, and every dollar that went out through debt payments, taxes, fees, and distributions. File this accounting with the court along with a petition to close the estate and discharge you from further duties. Beneficiaries get a chance to review and object. If the court approves the final settlement, the estate is officially closed and your legal responsibilities end.
How Long It Takes and What the Executor Gets Paid
Most probates run six to nine months from start to finish. Contested estates, complex assets, or tax disputes can stretch that to two years or more. The biggest delays come from selling real estate, waiting out the creditor notice period, and resolving disputes among beneficiaries. Planning for a full year is realistic for most estates of moderate complexity.
Executors are entitled to compensation. If the will specifies a fee, that controls. If it doesn’t, most states apply a “reasonable compensation” standard that weighs the estate’s size, the complexity of the assets, the number of beneficiaries, and the hours spent. A smaller number of states set fees by statute as a percentage of the estate, usually on a sliding scale where the rate decreases as the estate grows. Fees generally fall between 2% and 5% of the estate’s value, higher for very small estates and lower for very large ones. The fee is paid from estate funds and is taxable income to the executor.