How Probate Works: A Plain-English Guide for Inheritance Recipients
Probate is the court-supervised process that validates a will and transfers estate assets to beneficiaries. Whether you're waiting for your inheritance or trying to plan ahead, here's what you need to know — including the critical step most beneficiaries miss while probate is ongoing.
What is probate?
Probate is the legal process through which a deceased person's estate is administered under court supervision. It accomplishes three things:
- Validates the will — the court confirms the will is authentic and was properly executed
- Pays creditors and taxes — valid debts, final expenses, and any estate or inheritance taxes are settled
- Transfers remaining assets — what's left goes to the beneficiaries named in the will (or to heirs under state intestacy law if there's no will)
Probate is a state court process, so the rules, timeline, and costs vary significantly depending on where the decedent lived (or owned property). That said, the general framework is similar across most states.
Which assets go through probate — and which don't
This is the most important thing to understand about probate: only assets owned solely by the decedent with no beneficiary designation go through probate. Many common assets pass directly to heirs without involving the court at all.
Assets that bypass probate
| Asset type | How it transfers |
|---|---|
| IRAs, 401(k)s, 403(b)s | Directly to named beneficiary; file paperwork with the custodian |
| Life insurance | Directly to named beneficiary; file a claim with the insurer |
| Bank accounts with POD designation | Directly to payable-on-death beneficiary |
| Brokerage/investment accounts with TOD designation | Directly to transfer-on-death beneficiary |
| Joint tenancy with right of survivorship (JTWROS) | Automatically to surviving joint owner(s) |
| Assets held in a revocable living trust | Distributed by the trustee per the trust document, no court needed |
| Annuities with named beneficiaries | Directly to beneficiary; file claim with insurer |
| U.S. savings bonds with co-owner or POD | Directly to surviving owner or named POD beneficiary |
If you've inherited an IRA or 401(k), you don't have to wait for probate to finish — contact the custodian now and start the inherited IRA transfer process. Same for life insurance: file the claim immediately.
Assets that typically go through probate
- Real estate titled solely in the decedent's name (without JTWROS, a TOD deed, or a trust)
- Bank accounts without a POD designation, owned solely by the decedent
- Investment accounts without TOD designations
- Personal property — vehicles, jewelry, furniture, art, collectibles
- Business interests — sole proprietorships, partnership interests, closely-held stock (unless transferred to a trust)
- Any asset where the named beneficiary predeceased the decedent and no contingent beneficiary was named
- Assets payable to "the estate" rather than to a named individual
Note: Some states have simplified procedures for small estates (see below) that let heirs claim even probate assets without full court proceedings.
The probate process, step by step
1. File a petition with the probate court
The executor named in the will (or a petitioning heir if there's no will) files a petition with the probate court in the county where the decedent lived. The original will and death certificate are filed. Court filing fees are typically a few hundred dollars.
2. The court validates the will and appoints the executor
If there's a valid will, the court admits it to probate and formally appoints the executor (sometimes called the "personal representative"). If there's no will, the court appoints an administrator — usually the surviving spouse or an adult child. If the will is contested, this stage can stall the entire process for months or years.
3. Inventory and appraise the estate
The executor identifies and values all probate assets. Real estate typically requires a certified appraisal. Financial accounts are valued at date-of-death balances. For complex estates, a professional appraiser handles business interests, art, or collectibles.
This is the step that establishes your step-up in basis for inherited assets. Even if probate is slow, push for the appraisal to happen while the estate is open — the IRS will scrutinize step-up basis claims, and a contemporaneous appraisal is the best documentation.
4. Notify creditors and pay valid debts
The executor publishes a notice to creditors (in a local newspaper in most states) and directly notifies known creditors. Creditors typically have 30–90 days to file claims, though this window varies by state. The executor reviews claims and pays valid ones — invalid or disputed claims can be rejected.
Creditors must be paid before beneficiaries receive anything. If the estate is insolvent (debts exceed assets), beneficiaries receive nothing. Beneficiaries are generally not personally liable for the decedent's debts unless they co-signed or the debt involved joint property.
5. File and pay taxes
The executor is responsible for:
- The decedent's final income tax return (Form 1040 for the year of death, due April 15 of the following year)
- Estate income tax returns (Form 1041 for any income earned by estate assets during probate, if over $600)
- Federal estate tax (Form 706) — only required if the gross estate exceeds $15 million in 2026 (the OBBBA permanently raised and preserved this exemption).1 Deadline is 9 months from date of death, extendable to 15 months.
- State estate or inheritance tax — 12 states and D.C. have estate taxes with lower thresholds than federal; 5 states have separate inheritance taxes. See our state-by-state inheritance tax guide.
6. File a final accounting with the court
The executor prepares a detailed accounting of all estate assets, debts paid, expenses, and proposed distributions. In many states this must be filed with the court and approved before distributions can proceed. Beneficiaries typically have the right to review and object to the accounting.
7. Distribute assets to beneficiaries
Once the court approves the accounting and all debts and taxes are paid, the executor distributes remaining assets to beneficiaries as specified in the will (or by state intestacy law). You'll sign receipts acknowledging what you received.
8. Close the estate
The executor files a petition to close the estate. The court issues a final decree, and the executor is formally discharged. The estate is closed.
How long does probate take?
Timeline varies significantly by estate complexity and state:
| Estate type | Typical timeline |
|---|---|
| Simple estate, cooperative heirs, small probate assets | 6–9 months |
| Average estate (real estate, multiple accounts, no disputes) | 12–18 months |
| Complex estate (business interests, real estate in multiple states, multiple beneficiaries) | 18 months–3 years |
| Contested will or disputed assets | 3–7+ years |
The most common causes of delay: creditor claim windows that must run before distributions; real estate in multiple states requiring ancillary probate in each state; disputes among beneficiaries; and estate tax audits (rare, but the IRS has 3 years from filing to audit Form 706).
What does probate cost?
Probate costs come from the estate — not from beneficiaries personally. Common expenses include:
- Court filing fees: $200–$1,000+, depending on estate size and state
- Attorney fees: Significant variation. Some states (California, Florida) set statutory percentages on the gross estate value; others charge hourly. Budget 1–4% of gross probate estate for attorney fees.
- Executor fees: Executors are entitled to "reasonable" compensation under state law, typically 1–5% of the estate. Many family executors waive this fee.
- Appraisal fees: $300–$600+ per property; more for business interests or complex assets
- Accounting fees: Variable, especially if estate income tax returns are required
Total costs for an uncomplicated estate typically run 3–7% of the probate estate's gross value. For a $500,000 estate, expect $15,000–$35,000 in fees — taken from the estate before beneficiaries receive anything.
Small estate alternatives to full probate
Most states have simplified procedures for small estates that can dramatically reduce time and cost. These procedures go by different names — "small estate affidavit," "affidavit of heirship," "summary administration," or "voluntary administration" — and they typically allow heirs to claim assets by presenting a notarized affidavit rather than going through full probate.
Eligibility thresholds vary widely by state and change periodically. Some states set the limit based on all probate assets; others exclude real estate. Check with the probate court in the relevant county, or consult a local attorney, to see if your situation qualifies.
Real estate usually cannot use small estate procedures — most states require either full probate or a specific "small estate affidavit deed" for property transfers.
What beneficiaries should do while probate is ongoing
Probate can feel like waiting. But there are time-sensitive steps beneficiaries can take — or must take — during probate:
Immediately (don't wait)
- Collect non-probate assets now. Contact IRA/401(k) custodians, life insurance companies, and banks with POD accounts. These pass outside probate and you can begin the transfer process immediately. Delaying costs you time in the market and may cause complications.
- Note the 9-month disclaimer deadline. If you want to disclaim (refuse) any portion of your inheritance for tax-planning or Medicaid reasons, you must do so within 9 months of the decedent's death per IRC §2518. See our qualified disclaimer guide — this deadline cannot be extended.
- Identify the executor and get a copy of the will. As a named beneficiary, you're typically entitled to a copy. The executor should keep you updated on material developments.
Within the first few months
- Ensure a qualified appraisal is obtained. Ask the executor whether a formal appraisal of real estate and other significant assets is planned. The appraisal establishes your step-up in basis — the single most valuable tax benefit of inherited assets. A contemporaneous appraisal is much easier to defend than a retroactive one.
- Check for state inheritance tax exposure. Five states (Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania) tax the beneficiary directly based on their share — not the estate overall. This can be due even while probate is ongoing. See our state inheritance tax guide.
- Begin planning for what you'll do with the inheritance. You don't have to wait for probate to close to think through the decisions: IRA 10-year rule strategy, what to do with inherited real estate, how to invest a windfall. The decisions are complex enough that doing the research now — before the money arrives — puts you ahead.
When probate closes and you receive assets
- Document the step-up basis for every inherited asset. Get copies of the estate's asset inventory or appraisal reports. Your tax basis in inherited property is its date-of-death fair market value — not the original purchase price. You'll need this when you sell.
- Make a plan before moving the money. A lump sum is both an opportunity and a risk. Common mistakes in the first 6 months — impulsive spending, parking cash too long, failing to diversify concentrated inherited stock — can permanently damage outcomes. See our guide on investing an inheritance.
- Think about your own estate plan. You've just seen what happens without one. Adding beneficiary designations, a TOD on real estate, and possibly a revocable trust can ensure your heirs don't face the same 18-month wait.
Probate in multiple states: ancillary probate
If the decedent owned real estate in more than one state, the estate may need separate probate proceedings in each state where property was located — in addition to the "domiciliary" probate in the state of residence. This is called ancillary probate and it multiplies cost, time, and complexity proportionally.
This is a major reason estate planners put real estate in living trusts: a trust can hold real estate in any state without triggering ancillary probate.
When the will is contested
Will contests — formal legal challenges to a will's validity — can stall an estate for years. Common grounds for contesting a will include:
- Lack of testamentary capacity (decedent didn't understand what they were signing)
- Undue influence (someone pressured or manipulated the decedent)
- Improper execution (will not signed or witnessed correctly under state law)
- Fraud or forgery
If you believe a will contest may be coming — or if you're a named beneficiary in a will being challenged — consult an estate litigation attorney immediately. The probate court sets a window for filing objections; missing that deadline typically bars a challenge.
Use our tools
While you're waiting for probate or planning what you'll do with the inheritance:
- Inherited IRA 10-Year Drawdown Optimizer — if an IRA is coming to you, plan the withdrawal strategy now
- Step-Up Basis Tax Savings Calculator — see how step-up basis affects the tax math on inherited real estate or stock
- Inheritance Tax Calculator — estimate any state inheritance or estate tax on your share
- Pay Off Mortgage vs. Invest Calculator — if you're deciding what to do with a cash inheritance
Talk to an advisor before the money arrives
The window between "probate is closing" and "money hits your account" is when the highest-value decisions get made — often in a hurry. An advisor who specializes in inheritance planning can help you design the strategy before you're staring at a $500K bank transfer wondering what to do first.
Inheritance Advisor Match is a matching service. We connect you with vetted fee-only financial advisors in our network — we don't manage money or provide advice ourselves. Advisors in our network are fiduciaries who charge transparent fees (not product commissions), and we match you based on your specific situation.
InheritanceAdvisorMatch is a referral service, not a licensed advisory firm. We may receive compensation from professionals in our network. Content is for informational purposes only and does not constitute financial, tax, or legal advice.
Sources
- IRS: Estate Tax — filing thresholds and Form 706 (IRS.gov)
- 26 U.S.C. § 2518 — Qualified Disclaimers (LII / Legal Information Institute)
- 26 U.S.C. § 1014 — Basis of Property Acquired from a Decedent (LII / Legal Information Institute)
- IRS Publication 559 (2025): Survivors, Executors, and Administrators — estate administration duties and tax filings
- American Bar Association: Wills, Trusts, and Estates — estate administration overview
Federal tax values verified as of May 2026 against IRS.gov and current law. Probate procedures and small estate thresholds vary by state; consult a local probate attorney for jurisdiction-specific guidance.