The property goes to the heirs of the deceased whereas his debt and dependants are taken care of by the State.

Volume 8, Book 80 ‘Inheritance Laws, Number 755:

Narrated by Abu Huraira: The Prophet said, “If somebody dies (among the Muslims) leaving some property, the property will go to his heirs; and if he leaves a debt or dependants, we will take care of them”.

http://www.sahih-bukhari.com

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