When someone dies, the property that person owns ends up in the hands of someone else. Whether that occurs by way of a will or a court order, the person who is legally entrusted with the property can sell it and transfer the deed. In some cases, a property's title transfers automatically to someone else upon death.
TL;DR (Too Long; Didn't Read)
Some property transfers automatically upon death. Otherwise, it likely goes through probate court, where the executor or the administrator has the power to sell and transfer the property for the benefit of the heirs.
Automatic Transfer Upon Death: Joint Tenancy With Right of Survivorship
Joint tenancy with right of survivorship is a type of property ownership between two or more owners whereby when one owner dies, the other owners automatically receive the deceased's interest in the property.
For instance, if two sisters own a house together as joint tenants with right of survivorship, each owning 50 percent, and one sister dies, the other sister automatically becomes the 100 percent owner of the house. If there are four sisters, each owning 25 percent, and one dies, the deceased sister's 25 percent is divided equally among the surviving sisters. Each will then own a one-third interest.
Death of a Spouse: Tenancy by the Entireties
Some states have a special type of joint tenancy for married couples called tenancy by the entireties. This tenancy is essentially the same as a joint tenancy with the right of survivorship in that if one spouse dies, the other spouse owns the entire property. However, this tenancy has the added benefit of protecting the spouses from each other's creditors. So if a bank gets a judgment against a woman who has a tenancy by the entireties with her husband, and the judgment is only against the woman, the house she owns with her husband is protected from the judgment creditor.
Each state with tenancy by the entireties applies the law in different ways, but for purposes of probate, it allows a widow or widower to receive property without probate.
Death With a Will: the Executor's Powers
If property is not held jointly with survivorship rights and the property owner dies with a will, the will dictates who receives the property. The will instrument will appoint someone to be the executor of the estate, and the executor is responsible for preserving and disposing of the decedent's assets as required by the will.
To transfer real estate, the executor must use an executor's deed identifying him as the executor and identifying the name of the decedent and a description of the property, as well as the usual granting language conveying the property to the recipient. The executor must sign the deed, usually before a notary and at least one witness, as executor. State laws vary regarding deed requirements and particularly executor's deed requirements, but the deed must be recorded in the county where the property is located.
For example, if Grandma's will states that she leaves her house to her friend Myrtle and names Grandma's son, Dan, as executor, then Dan must execute an executor's deed transferring the property to Myrtle as "Dad, executor of the estate of Grandma."
Intestate Succession: the Administrator's Powers
If a person dies without a will, the property will pass by intestate succession. Intestacy laws vary from state to state, and state law dictates where the assets go.
In Pennsylvania, for example, the deceased's spouse receives the first $30,000 in assets, plus half of the remaining balance, and the children receive the remaining amount in equal shares. If someone dies without a living spouse but has children, the children receive everything equally. If a person dies without living children but with a living spouse, the spouse receives everything.
The probate court appoints an administrator to handle the deceased's intestate estate. The administrator has the same powers as the executor and can transfer property in a similar manner using an administrator's deed.