How are inherited properties distributed?

Key points when distributing property and assets

• Distribution of property and assets can take time and can be emotionally challenging.

• Some assets will need to go through a legal probate process to determine who will inherit them, while a non-probate asset with a named beneficiary can be transferred directly to its new owner.

• The executor (or administrator) of your loved one's estate is responsible for the distribution of probate assets.

• Small estates, as defined by state law, can avoid a full probate process and transfer assets using affidavits or other methods.

Property is one looming subject most people have questions about when a loved one has passed away. It’s natural to try to hold on to our memories with the person by keeping physical reminders of them. However, though you might be responding in an emotional manner to this situation, there’s also a legal process that takes place. 

It can be overwhelming to try to sort out, because some property needs to go through probate, other things do not, and the executor (or administrator) of the estate is generally in charge of it all. Even if the will says you get the car, you usually can’t simply go to the house, get the keys, and drive it away. Distributing the material assets of an estate takes time, and a court lets the executor know when they have the go-ahead to start it.

Being patient is hard when you’re mourning and want to make sure you’re honoring your loved one’s wishes. However, knowing a little more about the process can help you manage your expectations.

Distributing the assets

The executor, as named by the will, is the person who will tackle the actual distribution. They are legally required to follow the validated will when doing so, along with paying debts and handling closing the estate.

If there is no will, the administrator of the estate will distribute assets according to a set order laid out in state intestacy laws.

In both cases, how and when that distribution takes place depends on how the assets are categorized by the law. 

Probate assets

When assets that were owned solely by your loved one go through the court process, the executor or administrator will gather, inventory, and safeguard the property until creditors, expenses, and debts are paid. Creditors have a set amount of time (which varies by state, but is usually about six months) to reach out to the estate and settle outstanding payments. Once those are satisfied, they will distribute what’s left of the estate, per the instructions in the will or state law.

If you are a beneficiary, this is when the executor will contact you and, say, hand over the keys and title to the car and allow you to drive away in it.

At this point, now that ownership has been transferred, you and the other beneficiaries might jointly own some assets, most often a house. You may now decide to sell those jointly-owned properties and divide the proceeds between you.

Non-probate assets

Assets that were held or transferred through means such as living trusts, payable-on-death accounts, jointly owned property, or life insurance, generally do not go through the probate process. Instead, ownership typically transfers to the beneficiaries or new owners upon notification of the death and filing of the death certificate and other required paperwork. The executor is not technically in charge of this process, but will often be the one to pass the assets along, as they generally have access to all the relevant documents.

Affidavits and other claims

Many estates are small enough that they can avoid a full probate process altogether in some states. If your loved one’s estate is smaller than the ceiling set by the state, then you can claim property, with or without a will, through a simplified process. Often this involves using affidavits. 

An affidavit is a formal statement saying that you are entitled to the inheritance and that the estate qualifies for it under state law. Keep in mind that some states might require this document to be notarized. Typically, you’ll have to wait for a short time (30 to 45 days) after the death to claim property in this way.

Also note that the affidavit process can’t be used to transfer real estate in most cases. However, some states have separate affidavit procedures for real estate property. 

Dividing up a loved one’s belongings is a difficult process for everyone involved. If you are the executor of the estate and are distributing assets, transparency is important to keep the peace and help reassure everyone that you’re being fair. If you’re a beneficiary who is waiting on the executor of the estate, on the other hand, try to remember that this is an arduous task with lots of moving parts. Offer help if and when it’s appropriate, even if it's just an ear for grieving family members—and ask for help yourself when you need someone to lean on.

You may be eligible for free bereavement support. Empathy can help with everything from funeral planning to estate administration, with step-by-step guidance and real-time expert support. Many people get free premium access to Empathy as a benefit with their life insurance claim. We partner with New York Life, Guardian Life Insurance Company, Bestow, Lemonade, and other leading carriers. When you make your life insurance claim, talk to your representative about whether Empathy is a benefit they offer.