After a death, the money side of an estate comes down to three questions: what the estate owes, where its money sits, and which tax returns are due. On the first, the CFPB, the federal consumer finance agency, says debts “are generally paid out of the money or property left in the estate“, and most relatives owe nothing from their own money. The tax returns are usually months away. So much of this can wait until you know what the estate holds.
This page is general information, not legal or tax advice. Estate law varies by state and changes. Ask the court clerk, or a lawyer or tax professional, about your case.
The sections below follow the order the work usually comes up, and each one points to the full guide.
What can’t wait, and what can
- Soon: mortgage and car payments, insurance on the house, and any court deadline. Start a list of every bill that arrives.
- Once someone has been appointed: the estate’s tax number and bank account.
- Later: the tax returns, and payments to heirs, because debts generally come first.
First, find out what the estate owes
A debt doesn’t pass to the family, but it doesn’t vanish either. It stays with the estate, meaning the money and property the person left. If the estate can’t pay and nobody shared the debt, the CFPB says “it may go unpaid”.
Some people can still owe. The CFPB’s list includes a co-signer on a loan with a balance left, a joint holder of a credit card (an authorized user isn’t responsible), and a surviving spouse where state law requires it. So can anyone whose own signature made the debt theirs. A Direct federal student loan is discharged once the death is proved. A mortgage stays on the house, and the payments still have to be made or the lender can foreclose. Medicaid can act as a creditor as well, and whether it can reach the house has its own guide.
Does debt die with you? goes through it debt by debt, including what collectors may say. A collector can discuss the debt with a spouse or executor, but that doesn’t mean you owe it, and you can ask for the details in writing.
There’s no national list of who gets paid first: state law sets the order. In Florida (Fla. Stat. 733.707, read 5 Nov 2026), an ordinary credit card balance would normally fall in the last class, behind administration costs, funeral costs and others. And there’s no national deadline for creditors. Many states run a claims process, where the representative gives notice and creditors who miss the window can lose the claim. The probate court clerk is the place to ask how yours works.
Then give the estate its own number and account
The representative is the executor a will names, or the administrator a court appoints if there’s no will. The usual order is letters testamentary or letters of administration first, meaning the court papers that give the representative authority. Then comes the EIN, a free nine-digit federal tax number that belongs to the estate. “You never have to pay a fee for an EIN,” the IRS says, so you don’t need a site that charges.
Our guide to getting an EIN for an estate covers whether this estate needs one, the answers on the form that catch people out, and what to do with the number. On the account, New York’s court law library (page updated 4 May 2026, read 5 Nov 2026) says a fiduciary, the person managing the estate, needs both court authority and an EIN to open one. We didn’t find a rule covering other states, so ask the bank what to bring.
Not every account goes through the estate. Some property passes straight to someone else: life insurance paid to a named person, or accounts with a beneficiary or survivor. Interest on an account that went to a surviving joint owner is reported under the survivor’s own number, not the EIN. You may read that creditors can’t touch any of this property. That’s too broad: it’s a state law question, and the answers differ.
Sort out the three returns
Three federal returns get mixed up after a death. The date of death usually splits the first two.
| Return | What it covers | Who needs it | Due |
|---|---|---|---|
| Final Form 1040 | The person’s own income up to and including the day they died | Same filing rules as anyone else | Generally April 15 of the year after death |
| Form 1041 | Income the estate receives after the death | Estates with $600 or more of gross income in the tax year, or a nonresident alien beneficiary | 15th day of the 4th month after the estate’s tax year ends |
| Form 706 | The estate tax, on the value of what the person owned | Large estates: the basic exclusion is $15,000,000 for deaths in 2026. Some smaller estates file to pass a spouse’s unused exclusion to the survivor | 9 months after death |
The person’s own return. If they died in 2026, it’s due 15 April 2027, whatever the month of death. No probate doesn’t mean no return, and any earlier year they had to file and didn’t has to be dealt with too. Our guide on how to file taxes for someone who has died covers who signs, what goes on the return and who gets a refund.
The estate’s return. Form 1041 is not a tax on the inheritance. It reports what the estate’s money earns after the death: interest, dividends, rent, a gain on a sale. The test is income, not what the estate is worth. By our own arithmetic, $15,000 at 4% earns $600 in a year. Income is “taxed to either the estate or the beneficiary, but not to both.” Who takes it can matter, because for 2026 an estate reaches the 37% bracket above $16,000 of taxable income, against $640,600 for an unmarried person.
Check whether a death tax applies
With the federal estate tax starting at $15,000,000 for deaths in 2026, the tax a family is more likely to meet is a state’s. Twelve states and DC have their own estate tax, most starting far lower, down to $1,000,000 in Oregon (ORS 118.010, read 5 Nov 2026 in an archived copy of the official page dated 18 Apr 2026). Five states tax what heirs receive: Kentucky, Maryland, Nebraska (archived copy of the official page dated 24 Oct 2026), New Jersey and Pennsylvania, all read 5 Nov 2026. Maryland does both kinds.
Our state estate and inheritance tax calculator estimates each of these for a death in 2026, from each state’s own table. It gives an estimate, not a tax bill. Its starting figure, the gross estate, is much wider than probate. Selling a house is a separate question, and the capital gains estimate for an inherited house covers it.
Pay in the right order
Being the representative means using estate money to settle debts. The CFPB says it “does not make you responsible for paying the debt with your own money.” Mishandling the estate can. One risk to ask about is paying out too early: heirs before creditors, or low-priority creditors before higher ones. It’s one reason beneficiaries may have to wait.
The sharpest risk is federal. When an estate can’t pay all its debts, 31 USC 3713 says a claim of the US “shall be paid first”, and a representative who pays others ahead of it can be liable for the unpaid claim, to the extent of that payment. IRS Publication 559 ties this to having notice of the tax or failing to use due care to check. The statute lists no exception outside bankruptcy, though the IRS’s manual, which guides its staff and isn’t law, says courts have let certain claims go first, including administrative and funeral expenses.
Two forms in Publication 559 help when the job winds down. Form 4810 cuts the IRS’s window to 18 months from the request on most returns, though not the estate tax return. Form 5495 asks for discharge from personal liability.
These are the points to get a lawyer: an estate that may not cover its debts, especially with an IRS debt; a lawsuit or a deadline running; a nursing home or support-law claim against a relative; a business; or a conflict between heirs.
Your next step
Start one folder. Put in every bill and statement, the last filed tax return, the death certificate, any letters from the court, and anything the person signed with someone else, such as co-signed loans or a nursing home contract. List roughly what the estate holds and what passes outside it. Then ask the county probate court clerk how creditor claims work in your state, and whether anyone has been appointed yet. The tax returns can usually follow.
Sources checked on 5 November 2026.
