To leave property to someone after your death, you have four main tools: a will, a trust, a transfer-on-death deed for real estate, and a beneficiary designation on a financial account. Each moves property at a different speed, costs a different amount, and exposes your heirs to a different level of court involvement. Most estate plans combine several of them so every asset you own has a clear path to the right person without forcing your family into probate.
Leaving Property Through a Will
A last will and testament lets you name exactly who inherits your real estate, vehicles, bank accounts, and personal belongings. You also name an executor, the person responsible for carrying out your instructions after you die.
For a will to hold up, it generally needs to be in writing, signed by you, and witnessed by at least two adults who are not receiving anything under it. Witnesses sign in your presence and in each other’s presence. Some states also accept a self-proving affidavit, a notarized statement attached to the will that lets a court accept it without calling the witnesses to testify later. Roughly half the states recognize holographic wills, meaning entirely handwritten and signed by you with no witnesses. Those are far more vulnerable to legal challenges because nothing independently confirms you wrote the document voluntarily and with a clear mind.
Every will passes through probate. A judge confirms the will is valid, creditors get a chance to collect debts owed by the estate, and the executor distributes what remains. Timelines vary, but six months to over a year is common. The proceedings are public record, so anyone can look up what you owned and who received it. If privacy or speed matters, a will alone may not be enough.
Simplified Probate for Smaller Estates
Full probate is not always necessary. Every state offers a streamlined process for estates below a certain value. Thresholds range from as little as $15,000 in some states to $184,500 in others, with many states falling somewhere between $50,000 and $100,000. If an estate qualifies, heirs can often collect assets using a small estate affidavit, a sworn statement presented directly to the bank or other institution holding the property, with no court hearing required. The affidavit route typically cannot be used for real estate, and it is unavailable once a formal probate case has already been opened.
Leaving Property Through a Trust
A trust is a separate legal arrangement. You transfer ownership of your assets to the trust itself, and a trustee manages those assets according to your written instructions. The most common version is a revocable living trust: you create it while you are alive, fund it by retitling property into the trust’s name, serve as your own trustee, and keep the power to change or cancel it at any time. You also name a successor trustee who steps in after you die to distribute assets to your chosen beneficiaries.
The point of a funded revocable trust is that its assets skip probate entirely. There is no court supervision, no public record of what you owned, and the successor trustee can begin distributing property almost immediately. For families with real estate in more than one state, this is especially valuable because it avoids separate probate proceedings in every state where property sits.
What a Revocable Trust Will Not Do
A revocable trust does not shield assets from creditors during your lifetime or after your death. Because you retain the power to revoke it and take the assets back, courts treat those assets as still belonging to you. An irrevocable trust permanently removes assets from your control and your estate, which is what provides creditor protection and can reduce estate taxes. The tradeoff is that you cannot take the property back or change the terms.
The Pour-Over Will
Most planners pair a trust with a pour-over will. This is a short will directing that any asset you forgot to transfer into your trust during your lifetime should move into the trust after your death. The catch is that those leftover assets still go through probate before they reach the trust. A pour-over will is a safety net, not a shortcut. The real work of avoiding probate happens when you fund the trust by retitling each asset while you are alive.
Transfer-on-Death Deeds for Real Estate
A transfer-on-death deed lets you name a beneficiary who will automatically inherit a specific piece of real estate when you die, with no probate. You keep full ownership and control during your lifetime. You can sell the property, refinance it, or revoke the deed without the beneficiary’s knowledge or consent. The beneficiary has no ownership interest until the moment of your death.
These deeds are available in roughly 30 states plus the District of Columbia, so they are not an option everywhere. Where they are allowed, the deed must be signed, notarized, and recorded with the county land records office before your death. A TOD deed sitting unsigned or unrecorded in a drawer does nothing.
Joint ownership with right of survivorship is a different way to pass real estate outside probate. When one owner dies, the surviving owner automatically receives full title. The crucial difference is that a joint owner already has an ownership stake in the property while you are alive. Their creditors could place a lien on the property, and you would need their consent to sell or refinance. For most people, a TOD deed is the simpler and lower-risk choice where the state allows it.
Beneficiary Designations on Financial Accounts
Many financial assets never need to go through probate or a trust because they pass directly to a named beneficiary. Life insurance policies, 401(k) plans, IRAs, and annuities all have built-in beneficiary designation forms. Bank accounts accept a payable-on-death designation, and brokerage accounts accept a transfer-on-death designation. In each case, the institution hands the asset directly to the person you named, usually within days or weeks of receiving a death certificate.
Beneficiary designations override your will. If your will says your retirement account goes to your sister, but the account’s beneficiary form still names your ex-spouse, your ex-spouse gets the money. This is where estate plans fall apart most often, because people update their wills after a divorce or remarriage but forget to update the forms at each financial institution.
Spousal Rights on Retirement Accounts
Federal law gives your spouse automatic rights to your 401(k) and most employer-sponsored retirement plans. If you want to name anyone other than your spouse as beneficiary, your spouse must sign a written waiver, witnessed by a plan representative or notary public.1Office of the Law Revision Counsel. 29 USC 1055 This requirement applies regardless of what your state’s rules say about marital property. Traditional and Roth IRAs are not covered by that federal rule, but some states, particularly the roughly nine with community property laws, impose their own spousal consent requirements for IRAs.
Always Name a Contingent Beneficiary
Every beneficiary form has a line for a contingent beneficiary, the person who inherits if your primary beneficiary dies before you do. Skip this line, and if your primary beneficiary predeceases you, the account typically reverts to your estate and goes through probate, defeating the whole point of the designation. A few minutes filling in a backup name can save your family months of court proceedings.
Leaving Property to a Minor or a Person With Disabilities
Leaving property directly to a minor child creates an immediate problem. A child cannot legally manage an inheritance, and without instructions from you, a court will appoint a guardian to handle the assets. That guardian may not be who you would have chosen. The standard fix is a testamentary trust, a trust written into your will that comes into existence after your death. You name a trustee to manage the inherited assets and specify the age at which the child gains full control, commonly 21 or 25. Until then, the trustee handles investments and makes distributions for the child’s benefit according to your instructions.
Leaving property to a person with a disability requires more care. A direct inheritance can disqualify someone from Supplemental Security Income, Medicaid, and other means-tested government benefits because those programs count inherited assets as resources. A third-party special needs trust solves the problem. You fund the trust with your own assets, name a trustee to manage them, and the trustee spends money on things that improve the beneficiary’s quality of life, such as education, recreation, and personal care, without replacing the government benefits that cover food and housing. Because the assets in a third-party special needs trust were never owned by the beneficiary, there is no requirement to reimburse the state for Medicaid costs when the beneficiary eventually dies.
Digital Assets
Online accounts, cryptocurrency, digital media libraries, and domain names are property, and they can be lost entirely if nobody knows they exist or has authority to access them. Nearly every state has adopted a version of the Revised Uniform Fiduciary Access to Digital Assets Act, which gives your executor or trustee legal authority to manage your digital accounts after your death. The law creates a priority system, though. Instructions you leave through an account’s own tools, like Google’s Inactive Account Manager or Facebook’s Legacy Contact, override your will or trust. Instructions in your will or trust come next. Leave nothing, and the platform’s terms of service decide.
The practical step is to build an inventory of your digital accounts with usernames, where to find passwords or recovery keys, and what you want done with each. Store the inventory separately from your will, since a will becomes public record, and reference its location in your estate planning documents. For cryptocurrency, losing access to a private key means the assets are gone permanently. No court order can recover them.
Taxes on Inherited Property
Inherited property gets a major tax break that most people do not know about. When you inherit an asset, your cost basis for capital gains purposes resets to the property’s fair market value on the date of the prior owner’s death.2Office of the Law Revision Counsel. 26 U.S. Code 1014 – Basis of Property Acquired From a Decedent This is called a stepped-up basis, and it can eliminate decades of accumulated gains in a single moment.
Consider a concrete case. Your parent bought a house for $80,000, and it is worth $400,000 when they die. Had they given you the house as a gift during their lifetime, your cost basis would carry over at $80,000, and selling for $400,000 would produce a $320,000 taxable gain. Because you inherit the house instead, your basis resets to $400,000. Sell immediately and your taxable gain is zero.3Internal Revenue Service. Gifts and Inheritances That is why planners almost always recommend holding appreciated assets until death rather than gifting them during your lifetime.
Inherited property also automatically qualifies for long-term capital gains rates regardless of how long the beneficiary actually holds it. Sell an inherited asset the week after receiving it, and you still pay the lower long-term rate.
The federal estate tax applies only to estates exceeding the basic exclusion amount, which is $15,000,000 for 2026.4Internal Revenue Service. Whats New – Estate and Gift Tax A married couple can effectively shield up to $30,000,000 using portability. The vast majority of estates owe no federal estate tax at all. A handful of states impose their own estate or inheritance taxes with lower thresholds, so the federal exemption does not guarantee a completely tax-free transfer in every state.
What Happens to a Mortgage on Inherited Property
Inheriting a home with a mortgage does not let the lender demand immediate repayment. Federal law prohibits a lender from enforcing a due-on-sale clause when property transfers to a relative because of the borrower’s death, or when a joint tenant or co-owner inherits through right of survivorship.5Office of the Law Revision Counsel. 12 USC 1701j-3 Preemption of Due-on-Sale Prohibitions The same protection applies to property transferred into a living trust where the borrower remains a beneficiary.
The heir does not automatically become responsible for the mortgage debt, either. The loan stays with the estate. But if the heir wants to keep the home, they need to keep making payments. Most lenders will work with an heir to assume the existing loan, often at the same interest rate and terms the original borrower had. The heir can also refinance into a new loan in their own name or sell the property and use the proceeds to pay off the balance. What the lender cannot do is call the entire loan due simply because ownership changed hands through inheritance.
What Happens Without Any Plan
Dying without a will or any other estate plan means your state’s intestacy laws decide who gets your property. These statutes follow a rigid hierarchy: surviving spouse first, then children, then parents, then siblings, and on down the family tree. The formula varies by state, but the pattern is consistent. A surviving spouse rarely inherits everything if there are also surviving children. In most states, the spouse and children split the estate according to a fixed ratio you had no say in choosing.
Anyone outside that statutory hierarchy gets nothing. Unmarried partners, stepchildren you never legally adopted, close friends, and charities are all invisible to intestacy law. The only way property reaches those people is through a deliberate plan.
What Estate Planning Costs
A simple will drafted by an attorney runs a median of roughly $625 nationally, based on 2026 survey data. A comprehensive living trust package, which usually includes the trust document, a pour-over will, powers of attorney, and healthcare directives, has a median cost around $2,475. Attorney fees are typically flat-rate, and the price depends more on the complexity of your situation than on where you live. DIY online platforms offer basic wills for under $100, but they provide no legal advice and leave you responsible for making sure the document meets your state’s requirements.
Beyond attorney fees, recording a TOD deed or transferring real estate into a trust involves county recording fees, generally between $15 and $100 per document. Retitling financial accounts into a trust is usually free but takes paperwork with each institution. These costs are modest next to the probate fees and delays your family would face without a plan in place.