The state decides what happens to it. It is awarded to whoever the state rules to be the "next of kin", meaning the closest living relative. Usually that is a spouse. Next would be the oldest child. Then the parent(s), oldest sibling, etc. If the person has a life insurance policy, whoever is the named in the policy may have a claim at being "next of kin".
In many cases if the deceased has no major property (meaning no house, business, etc.) the family just gets together and divides up whatever there is and no legal steps are taken.
That was the case with both my parents and my wife's parents. Mine were in a nursing home and had nothing by their clothes, a couple pieces of furniture, and less then $500 in the bank. We picked the clothes for charity, divided up some knick knacks they had, and donated the furniture to the nursing home.
My youngest daughter was living with my wive's mother when she passed. Since she was occupying the home, it went to her. She divided up her grandmother's belongs with anyone who wanted some. They had a join bank account so she retained the few hundred dollars that were there. She was a join owner of the car and retained it. Again, no lawyers were involved. The family just took care of it.