So, we had our first PC death. A question is brought up with that...how do you deal with the goodies? I'm not talking RAW, since I don't think there is anything per se, I'm asking about what you do personally.

In the instance, it's already been resolved. The guy doesn't care and already said that he wanted the party to take what they want and sell the rest. However, I'm conscious that might not always be the case for future deaths. What do you think is fair? How do you avoid arguments or allowing the party to become OP?

It depends on the character itself.  

For my group, characters playing clerics?  If they didn't develop character ties to family or some form of loved one?  They get sent off to the church of that character's faith.  I've seen a party lose a holy avenger this way.

In terms of what that player wants?  It's kind of a moot point, they're dead.  At the exact moment of death, they don't have a voice at the table anymore.  As a DM, I will see what the party is doing and act accordingly.  If they take all the items and distribute them amongst themselves?  I'll let the new player roll but they won't start with any items.  Then the party can figure out how to now redistribute all of their magic items in general.  If they sell all of them, next town they are in I'll put a magic item shop so we can see what turns up so the new player gets some.  If there's some exceptional roleplaying on the death and they bury them all?  I'll have the new guy come in with some.  

I've never just flat out said give it all to the new player because the items in question I put in were for that old party comp, and I doubt a Paladin is going to want a wand of the pact keeper, etc.  Some items are going to just be flat-out incompatible with anyone else but that player/character combination as well.

At low levels, a character's items aren't likely to impact the group much, so it's easiest just to let them divvy up the goods.

At higher levels, the party will have access to resurrection magic, so if a party member dies permanently, then that usually means a TPK and the question is irrelevant.

If the character dies in a dramatic way, such as jumping into a volcano, then there are no items to redistribute, so it doesn't matter.

Do what makes sense, then if anyone speaks up, make reasonable accomodations and declare a policy. First priority is having fun.

Often the player rolls up a similar character so it seems just pass the stuff along to the new PC.  The party, "Carries" the stuff until they meet the new PC.

If the player rolls up a completely new sort of character, then there might be some distributin' goin' on.

If the stuff is lost in the tragedy, well the decision was made for you and there is nothing to do.

Loot the corpse and feed the body to the worms.

typically the items came into the dead pc’s possession during the party’s adventures so…

if the pc can be raised the items stay with them. If they are dead for good the party should take what they want and sell the rest. If the party wants to leave all the items to the new character that’s fine. And if there are items that cannot be used by the party or new character then sell them. 

If an item is a personal item for the dead pc (family heirloom, item not earned in an adventure with the party, etc) the dead pc player should decide where that goes. 

I think the ideal is for the other party members to loot the body,  distribute useful items however works best for the group, then when the party inevitably meets the Player's new PC they gift him some magic items to help him keep up with the rest of the party, mostly the stuff they had already looted from their original character, but they shouldn't feel obligated to just keep it all in a bag and give it all to the new PC without question.

There is nothing in the mechanics of D&D that says what happens to a PC's belongings on their person or "home" when they die.  Probate is a social thing that can have a meta dimension (house rule at the table, when a PC dies all other PC get to divide up the property accordingly or a more video gamey "zap, it all belongs to some hitherto unknown character played by the deceased's player) or (my preference) a more in game social thing.  

Let's also acknowledge some deaths don't really allow for a body to be recovered, or if it's a party route there may be a dilemma of leaving the body behind or trying to carry it away with the party.  So beyond that, if the deceased never explained to the other characters what should become of their possessions, it's sort of on the party to figure it out.  Maybe they'll loot it and if they got time bury it.  Other times, there may be some sort of will and testament involved.  Some things, including the body, may be requested to be delivered somewhere, usually the character's home or place of origin.  There's a lot of good story in other narrative genres in. the transport of a dead character home.  During such a deliverance more things can be learned about the deceased and maybe new characters (like the one the deceased's player needs) can be met on the way.  You could also go in a different direction and weekend at Bernie's it, I've seen it done both ways inside the same campaign, respecting last wishes and all.

IRL dangerous occupations it's not uncommon for someone to designate a battle buddy or partner as someone to bear a last letter or deliver a message home.  Sometimes such people are formally designated by their organization to take part in the transport of the deceased's remains.  Other times, it's more an informal rite where the person delivers the message or testimonial on the deceased's life and death on their own time.  In game terms, it's all a hook.

It's also possible that there are some items another party may have a more valid claim.  Extreme example, fallen PC was a Githyanki Psi Knight with a Silver Sword.  There's a Githyanki strike team en route to the body to make sure the party does NOT keep that.

I can see a player thinking that the items should go to their next character, but unless there is a strong reason for that happening, I'd say the items go to the party.

Of course, they might have a will - which the party may or may not honor. There is also the possibility that the party wants to play out a return the belongings to family thing.

I'm of the opinion that it depends on the circumstances of the death whether or not items are retrievable.

But I also usually go with "redistribute the magic items amongst the party" if the party takes that route, or give them to the character's family (if they are known).

And then let the player roll a new character with an equal amount or maybe 1 less magic item than what they had originally (repeats may be allowed depending on what the repeats are)

One way to ensure there's no argument is for the DM to rule how things like this will work. "If your character dies, this is what happens." Anyone who objects to that can take it up with the DM or start a dialogue. But I've found that these situations tend to resolve themselves. 

Mature players will just roll with whatever makes sense in-game. Immature players will feel entitled to those items, or magic items in general. If that arises, then the only way forward is a conversation between player and DM. But as for me? Items are attached to characters, not players. If your character dies, your rights to that gear dies too. If you really want something specific, then that sounds like a great RP opportunity or side quest for your new character.