Inheritance in the U.S.: who inherits when there’s no will, which taxes apply and how probate works

When a family member dies, one of the first questions is what happens to everything they owned and who has the right to it. Inheritance is receiving assets from someone who has passed away, such as cash endowments, stocks, and real estate.

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In the United States there is no single national inheritance law: each state sets its own rules on wills, heirs, and the court process, while the federal government regulates taxes.

As for the assets, the distribution is determined during the estate planning process when wills are written and heirs of beneficiaries are designated. The will specifies who will receive what, and then the assets are distributed by the probate.

How does probate works?

Probate is the court-supervised process for settling an estate. A judge validates the will, if there is one, and appoints an executor or administrator, who identifies assets, pays debts and taxes, and distributes what remains to the heirs.

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Probate law determines how an estate must be divided. Each state has laws and statutes to determine if and how an estate must be probated. Common factors are:

• The estate size
• Whether the estate includes real estate
• Whether or not there is a surviving spouse
• The number of motor vehicles in the estate
• The existence of a will and the number of named heirs

The process can take months, and many states offer simplified procedures for small estates.

What happens with the inheritance when there’s no will?

When someone dies without a will, known legally as “dying inestate”, the the state’s intestate succession law decides who inherits. The order varies by state, but the common legal order is:

• Surviving spouse or children: In many states, the surviving spouse receives everything if he or she is also the parent of all the children. Otherwise, the estate is split according to state-specific formulas.
• Parents: They will inherit if there is no spouse or children.
• Siblings: If there is no spouse, children, or parents, brothers and sisters inherit the estate. Nieces and nephews will step up if a sibling has passed away.
• More distant relatives: Grandparents, aunts, uncles, and cousins come next.
• The state: The state will keep the property if no relatives can be found, a process called escheat.

Do heirs pay taxes on an inheritance?

There is no federal inheritance tax, as the U.S. federal government does not tax beneficiaries directly on money or property they receive. Instead, it imposes a federal estate tax on the decedent’s entire taxable state before distribution to heirs.

But this tax only affects very large fortunes that exceed the statutory exemption threshold, which is $15 million per individual as determined by the IRS for 2026.

Also, some states impose their own estate or inheritance taxes, paid by the heir. These are:

• Kentucky
• Maryland
• Nebraska
• New Jersey
• Pennsylvania