It appears to me that you would need to issue a 1099-NEC to an attorney who handles the estate (and is not just handling a lawsuit settlement). There might well be an exception I don't know about. But it is pretty easy to file a 1099-NEC, so there is really no reason not to.
The estate itself will have to file a 1041 if it had over $600 in gross income of any kind. See https://www.irs.gov/individuals/file-an-estate-tax-income-tax-return
If the estate was opened and closed in 2025, only one return will be needed. Many estates wind up straddling a year. You can often avoid filing for two calendar years by adopting a fiscal year. See https://ttlc.intuit.com/community/taxes/discussion/fiscal-year-for-an-estate-1041/00/3684230
For an estate that is closed in one 1041 reporting year and distributes all of its assets to beneficiaries, all of the estate's income is shown on the 1041. However, the distributions are shown as a deduction against that income (resulting in no taxable income for the estate and no income tax due). The beneficiaries will get a Form K-1 showing the income they received. Not the principal. Just the income (e.g., dividends, interest, capital gains).
Keep in mind that this is not an estate tax return. It is an income tax return for an estate. The estate tax does tax the prinicpal transferred, but does not kick in until about $14 million, so it rarely applies.
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