The study of how stars distribute themselves around a massive black hole (MBH) in the center of a galaxy is an important prerequisite for the understanding of many galactic-center processes. These include the observed overabundance of point X-ray sources at the Galactic center, the prediction of rates and characteristics of tidal disruptions of extended stars by the MBH and of inspirals of compact stars into the MBH, the latter being events of high importance for the future space borne gravitational wave interferometer LISA. In relatively small galactic nuclei, hosting MBHs with masses in the range 10^5-10^7 Msun, the single most important dynamical process is 2-body relaxation. It induces the formation of a steep density cusp around the MBH and strong mass segregation, as more massive stars lose energy to lighter ones and drift to the central regions. Using a spherical stellar dynamical Monte-Carlo code, we simulate the long-term relaxational evolution of galactic nucleus models with a spectrum of stellar masses. Our focus is the concentration of stellar black holes to the immediate vicinity of the MBH. We quantify this mass segregation for a variety of galactic nucleus models and discuss its astrophysical implications. Special attention is given to models developed to match the conditions in the Milky Way nucleus; we examine the presence of compact objects in connection to recent high-resolution X-ray observations.

28 pages, 24 figures, ApJ accepted. Small changes to follow referee's suggestions