bluesea, you weren't far off the mark except there will be no transfer fee to the legal heir. But they certainly can't just be taken away and the ATF not involved!
If that happens the person in possession will be in violation of the law and the U.S. Schutzstaffel will most likely come calling just as you mentioned.
To the OP, if he died intestate, let the attorney or court decide who will be the lawful heir and file the Form 5 as mentioned to transfer title to the heir. There is no transfer fee at all. They can always be sold after you have had time to think hard about what you want to keep or sell. As mentioned, once these guns leave the family they will never return. Go slow and be sure what you're doing. A call to the local ATF office MAY help, depends on who answers the phone and how much they know. It's unfortunate but I have often found that I know more about the law than some of the ATF folks do. So go slow. And good luck.