Settling an estate: how probate works, what avoids it, and how long it takes

A short note before you start

This guide explains how estate settlement usually works in the United States. It is general information, not legal or tax advice. Probate is state law, and the forms, dollar limits, deadlines and fees differ by state and sometimes by county. Use your state court's self-help pages for specifics and a probate attorney when your situation does not fit.

What an estate is

A person's estate is everything they owned at death minus everything they owed: house, accounts, retirement plans, life insurance, vehicles, business interests, belongings and digital accounts on one side; mortgage, cards, medical bills and taxes on the other. Settling it means collecting the assets, paying valid debts and taxes, and distributing the rest under the will or, without one, under state intestacy law. The person who does this is the executor named in the will or a court-appointed administrator; many states call both a personal representative. Not all of the estate goes through court, so the first task is sorting assets into two piles.

What passes outside probate, and what goes through it

Outside probate

These transfer with a death certificate and a claim form, and the executor has no authority over them:

• Retirement accounts and life insurance with a named beneficiary; the plan or insurer pays directly.
• Property owned jointly with right of survivorship, including tenancy by the entirety for married couples where it exists. Nolo: "When one owner dies, the property simply goes to the other joint owner" (Nolo, checked 2026-09-17).
• Payable-on-death bank accounts and transfer-on-death registrations for brokerage accounts and bonds. Nolo notes that "the majority of the states also now allow transfer-on-death deeds for real estate" (Nolo, checked 2026-09-17).
• Anything titled in a living trust. The successor trustee distributes it under the trust document.

Through probate

Everything else: property in the person's name alone with no beneficiary, such as a house in one name, a solely owned account without a POD designation, a car, and personal belongings. Also anything payable "to my estate" and any beneficiary designation that failed because the named person died first. How title was held decides how much probate there is.

How probate works, step by step

The vocabulary changes by state; the sequence does not:

1. File the will and a petition with the probate court in the county where the person lived. The court confirms the will and appoints the executor or administrator, issuing "letters" as proof of authority.
2. Give formal notice to heirs, beneficiaries and known creditors, and publish a notice for unknown ones.
3. Inventory and value the assets as of the date of death. California, for example, uses a court-appointed probate referee for non-cash assets (California Courts, checked 2026-09-17).
4. Manage the estate while open: keep insurance and mortgages current, collect income, sell property if needed.
5. Pay valid claims in the order the state sets, then file the tax returns.
6. Prepare a final accounting, obtain court approval where required, distribute, and close.

Informal and formal probate

Sixteen states have adopted the Uniform Probate Code, and Nolo reports that "Most probates in UPC states are informal," a paperwork process with no court hearings that is used when heirs get along and no creditor trouble is expected (Nolo, updated June 9, 2026, checked 2026-09-17). Formal probate, with hearings and closer supervision, is used when there is a dispute, an unclear will, or a reason to have the court approve each step.

Small-estate procedures

Nolo: "Almost every state now offers shortcuts through probate" for small estates, in two forms: "affidavit procedures that allow you to claim property simply by presenting a sworn statement" and "simplified probate processes" (Nolo, updated May 26, 2026, checked 2026-09-17). There is no national threshold. Each state sets its own limit, decides what counts toward it, and sets a waiting period, so check your state court's self-help site.

Two examples, to show the range:

• California (example): personal property can be collected by affidavit when the qualifying estate is $208,850 or less for deaths on or after April 1, 2025 and "40 days have passed since the death." A separate petition covers a primary residence worth up to $750,000 (California Courts, Simple procedures to transfer an estate, checked 2026-09-17).
• Texas (example): a small estate affidavit is available when there is no will, "30 days have elapsed since the date of the decedent's death," no personal representative has been appointed, and the estate's assets "excluding homestead and exempt property, does not exceed $75,000" (Texas Estates Code 205.001; TexasLawHelp, checked 2026-09-17).

The only limit that matters is your state's, on the date of death.

How long it takes, and what slows it down

California's courts say formal probate "typically takes 9 to 18 months and can sometimes take even longer" (California Courts, checked 2026-09-17); Nolo says most Michigan cases "can be wrapped up within seven months to a year after the personal representative is appointed" (Nolo, checked 2026-09-17). An estate that avoids probate can be settled in weeks; a contested will, real estate in two states or an estate tax return can push past two years.

What adds months: the creditor claim window, which must close before safe distribution ("about three to six months, in most states," Nolo, checked 2026-09-17; Michigan gives creditors four months after notice); selling a house or business; an estate tax return, due nine months after death; a will contest, a missing will or missing heirs; and an executor working without an inventory.

Timeline table

What it costs

Costs come out of the estate, not the executor's pocket.

Court fees

Set by each state, sometimes scaled to estate size. California charges $435 for the first petition for letters and $435 again for most later petitions, including final distribution (Judicial Council of California, Statewide Civil Fee Schedule effective January 1, 2026, checked 2026-09-17).

Attorney fees

Nolo: "Lawyers usually use one of three methods to charge for probate work: an hourly fee, a flat fee, or a fee based on the percentage of the value of the estate." Statutory percentage fees are allowed in Arkansas, Iowa, California, Missouri, Florida and Wyoming, and Nolo warns they are "calculated based on the gross value of the probate assets, not the net value." Even there the fee is negotiable (Nolo, updated February 5, 2025, checked 2026-09-17).

Executor compensation

Executors are entitled to pay, either reasonable compensation under state law or a statutory schedule. California pays "Four percent on the first one hundred thousand dollars," then 3% on the next $100,000, 2% on the next $800,000 and 1% on the next $9,000,000 (California Probate Code 10800, checked 2026-09-17). New York starts at 5% on the first $100,000 and 4% on the next $200,000 (New York SCPA 2307, checked 2026-09-17). The fee is taxable income, and family executors often waive it.

Appraisals and the rest

Date-of-death appraisals for real estate, businesses and collectibles; a bond where the court requires one; a CPA for the returns. Small items on a simple estate, each a delay when paperwork is scattered.

Creditor claims

The executor must notify creditors and give them a window to file. The window is state law: "about three to six months, in most states" (Nolo, checked 2026-09-17), and states differ on when the clock starts. Valid, timely claims are paid in a legal order, with funeral and administration costs and taxes usually ahead of unsecured debts. If the estate cannot pay everything, distribute nothing until you know the priority rules; an executor who pays the wrong debts first can be held responsible.

For family members, the CFPB's rule is that "If there is no money or property left in the estate, or the estate can't pay, the debt will generally not be paid." You owe personally only as a co-signer, a joint account holder, under a state rule requiring a surviving spouse to pay certain debts, or in a community property state (CFPB, checked 2026-09-17).

Taxes

Three returns may be involved; most estates need only the first.

1. The final Form 1040. "The same tax deadlines apply for final returns," so it is due the following April 15 unless extended; a representative who is not court-appointed attaches Form 1310 to claim a refund (IRS, checked 2026-09-17).
2. Form 1041, the estate's income tax return, for interest, dividends or rent earned after death. Required at "Gross income for the tax year of $600 or more" or with a nonresident alien beneficiary; calendar-year estates file by April 15, with an automatic five-and-a-half-month extension (IRS, Instructions for Form 1041, checked 2026-09-17).
3. Form 706, the federal estate tax return, required "if the gross estate of the decedent, increased by the decedent's adjusted taxable gifts and specific gift tax exemption, is valued at more than the filing threshold for the year of the decedent's death": $13,990,000 for 2025 deaths and $15,000,000 for 2026 deaths (IRS, Estate tax, checked 2026-09-17). Ask a CPA about filing anyway to preserve a surviving spouse's unused exemption.

State taxes are separate. The Tax Foundation counts twelve states plus the District of Columbia with an estate tax and five with an inheritance tax, Maryland in both groups, and notes Oregon's exemption is only $1 million (Tax Foundation, updated November 4, 2025, checked 2026-09-17). Inheritance tax is paid by the recipient.

Distributing and closing

Distribute only after the claim window has closed, debts and taxes are paid or reserved, and the court has approved where required. Get a signed receipt from every beneficiary and close the estate account last. File the final accounting and the closing statement or petition for discharge, then keep the records for several years.

Speed depends almost entirely on the inventory. An executor who starts with a list of every account, policy, deed, debt and online service, with contacts and document locations, can finish the inventory in days and open the creditor window in the first month. That inventory is what a family guide such as Omliva's is built to hold; without one, discovery through mail and statements is the main reason a simple estate drags into a second year.

When to get professional help

Handle it yourself when the estate is small, the will is clear, the heirs agree and the assets are ordinary. Bring in a probate attorney when the will is contested or missing, there is real estate in more than one state, the estate may be insolvent, a business or rental is involved, a beneficiary is a minor or disabled, or the family is in conflict. Bring in a CPA when the estate earns income, the person had a business, the gross estate is near a federal or state threshold, or a surviving spouse may benefit from a portability election. Both are paid by the estate.