Losing a loved one is a sad and difficult time for family, relatives, and friends. In addition, those left behind must often figure out how to transfer or inherit property from the person who has died.

Typically this is done by filing a probate petition and seeking appointment of a personal representative or executor. It typically costs $1,500-$5,000 just to start this process. Then once a representative is appointed, they take charge of the assets, pay the debts and, after receiving court approval, they distribute the rest of the estate to the beneficiaries.

Also included in the debts of the estate is a 6-percent fee (of the entire estate) to be paid to the executor/personal representative and to the attorneys. For example: In an estate that has a home worth $600,000, vehicles worth $50,000, retirement (including 401(k)) and life insurance worth $500,000, and various other items worth $50,000, this leaves the probate fees at $75,000 or more. If the estate still owed on the mortgage and other credit accounts, this could easily leave the beneficiaries with little or no inheritance.

In some instances probate can take years before any property can be distributed. Until the court approves such distribution, you and your loved ones could be forced to pay the mortgage every month, not to mention all of the court appearances that will have to be made throughout that time.

Another big disadvantage of probate is that it is public. Your estate plan and the value of your assets will become a public record, which anyone can gain access to with a simple Google search. This is not a process you want your loved ones to suffer through. The good news is that in California this is generally avoidable simply by setting up a living trust!