Probate, Executors, Debts & Estate Taxes in the United States
This page explains the core legal steps after a death in the United States: what an estate is, what an executor or personal representative does, when probate is required, how debts are handled, how jointly owned assets work, and when federal or state estate taxes may apply. It also covers finding a will, dying without a will (intestate succession), contesting a will, and key planning topics such as powers of attorney, digital assets, and pets.
Quick Legal Summary (USA)
In the United States, a person's estate — everything they owned and owed — must be identified, valued, and legally administered after death. Outstanding debts, expenses, and any applicable taxes are generally paid from the estate first. Only after those obligations are settled can remaining assets be distributed to heirs named in a will or under state intestacy laws if no valid will exists.
Most estates go through probate, a court-supervised process that authorizes an executor (also called a personal representative) to manage and distribute assets. Some assets may transfer automatically outside probate, such as jointly owned property, life insurance with named beneficiaries, and certain retirement accounts.
Because probate and inheritance laws are set by individual states, rules can vary widely.
If you need state-specific rules
Probate timelines, small-estate thresholds, and inheritance laws differ by state. Use the dedicated state pages in this legal section for local guidance.
On This Page
Key Terms (USA)
Estate
Everything a person owned and owed at death — including bank accounts, investments, real estate, personal property, insurance proceeds payable to the estate, and outstanding debts.
Executor / Personal Representative
The individual appointed to manage the estate, pay debts and taxes, and distribute assets.
Probate
The court process that validates a will (if one exists) and authorizes estate administration.
Letters Testamentary / Letters of Administration
Court documents granting authority to act on behalf of the estate.
Intestate
Dying without a valid will.
Executors & Personal Representatives
The executor (or court-appointed administrator if there is no will) is legally responsible for handling the estate.
Common Responsibilities
- Obtain death certificates
- Notify banks, lenders, insurers, and government agencies
- Secure and value assets
- Identify and notify creditors
- Open an estate bank account
- Pay debts, taxes, and expenses
- File required probate documents
- Distribute assets to heirs
- Keep full financial records
If you don't want to serve
Most states allow you to decline or resign as executor, especially if you have not begun administering the estate. The court can appoint another suitable person.
What Counts as the Estate?
The estate may include:
- Bank accounts and cash
- Investments and brokerage accounts
- Real estate and land
- Vehicles, jewelry, valuables
- Business interests
- Refunds owed
- Personal belongings
Paid Before Inheritance
Before heirs receive anything, the estate typically pays:
- Funeral expenses
- Outstanding debts and loans
- Medical bills
- Credit cards
- Taxes and court fees
Notifying Organizations (USA)
You may need to notify:
- Banks and lenders
- Insurance companies
- Pension/retirement plan administrators
- Employers
- Credit bureaus
- Utility providers
- Social Security Administration
- Veterans Affairs (if applicable)
Timely notification helps prevent fraud and financial issues.
What Happens to Debt When Someone Dies in the US? Who Pays?
Debts are usually paid from the estate, not by family members personally — unless:
- The debt was jointly held
- Someone co-signed or guaranteed the loan
If the Estate Can't Pay
If debts exceed assets, the estate may be insolvent. States have strict priority rules for which creditors are paid first. Heirs typically receive nothing in this situation.
Professional advice is often wise for insolvent estates.
Joint Accounts & Jointly Owned Property
Joint Bank Accounts
Most joint accounts pass automatically to the surviving owner.
Joint Property (Common Forms)
Joint Tenancy with Right of Survivorship
The surviving owner usually inherits automatically.
Tenancy in Common
The deceased's share passes through probate to heirs.
Mortgages & Inherited Homes
If a home has a mortgage:
- Payments must usually continue
- The heir may refinance, assume the loan, or sell the property
- Sale proceeds typically pay off the mortgage first
Federal law often protects heirs from immediate foreclosure, but lenders must still be notified.
Small Estates & Simplified Probate
Many states offer faster procedures for estates under a certain value (often between $25,000–$200,000 depending on state).
These may allow:
- Affidavits instead of full probate
- Faster access to funds
- Lower court costs
Probate in the US: How It Works
Typical Steps
- File the will and death certificate with probate court
- Court appoints executor/personal representative
- Notify heirs and creditors
- Inventory assets
- Pay debts and taxes
- Distribute remaining assets
- Close the estate
When Probate May Not Be Required
- Assets held in trusts
- Jointly owned assets with survivorship rights
- Accounts with named beneficiaries
- Small estates (state-specific)
Estate Tax & Inheritance Tax (USA)
Federal Estate Tax
Only large estates exceed the federal exemption threshold. Most families never owe federal estate tax.
Federal taxes are administered by the Internal Revenue Service.
State Estate or Inheritance Taxes
Some states impose their own estate tax or inheritance tax, often at much lower thresholds.
Rules vary widely by state.
Gifts Made Before Death
Large gifts may affect estate taxes depending on:
- Amount
- Timing
- Federal lifetime gift exemptions
- State tax laws
Certain transfers are excluded or treated differently.
How to Find a Will
- Check home files and safes
- Ask family members
- Contact attorneys who may have drafted it
- Search state probate records after filing
- Review emails and legal documents
If There Is No Will (Intestate Succession)
Each state sets inheritance order, typically prioritizing:
- Spouse
- Children
- Parents
- Siblings
- Extended relatives
Unmarried partners usually do not inherit automatically.
Contesting a Will
Common legal grounds include:
- Improper signing or witnessing
- Lack of mental capacity
- Undue influence
- Fraud or forgery
- Executor misconduct
Deadlines apply — delays can forfeit rights.
When to Use a Probate Attorney
Often helpful when:
- Large estates
- Estate tax issues
- No will
- Family disputes
- Business ownership
- Multiple properties
- Insolvent estates
Fees are usually paid from estate funds.
Bequests & Inheritance Types
Specific Bequest
A particular item
Cash Bequest
Fixed amount
Residual Bequest
Remainder of estate
Contingent Bequest
Backup beneficiary
Pets & Estate Planning
Pets are legally property in most states.
Best Practices:
- Name a caregiver
- Leave care funds
- Include written care instructions
- Consider pet trusts where available
Powers of Attorney & Advance Directives
Power of Attorney
Allows someone to manage finances or medical decisions if you become incapacitated.
Advance Healthcare Directive / Living Will
States medical wishes if you cannot communicate.
Digital Assets & Online Accounts
May include:
- Cloud storage
- Photos/videos
- Social media
- PayPal & online banking
- Crypto wallets
- Reward points
Create a secure inventory and designate access where platforms allow.
Frequently Asked Questions (USA)
Do I inherit my parent's debt?
Usually no — unless you were a joint borrower or guarantor.
How long does probate take?
Commonly 6–18 months, sometimes longer for complex estates.
Do all estates pay estate tax?
No. Most do not meet federal or state thresholds.
Can property avoid probate?
Yes — through trusts, joint ownership, and beneficiary designations.
Legal Notice
This page provides general legal information for the United States and does not constitute legal advice. Probate, inheritance, and tax laws vary by state and individual circumstances. If you are handling a complex estate or dispute, consider consulting a qualified probate attorney.