What is a Heggstad Petition?
Problem: A family member or friend set up a living trust, but forgot to transfer an asset (such as a real property) into their living trust before his or her death.
Uh oh! In general, even though a deceased person (commonly called a “decedent”) set up a Living Trust, if an asset is not titled in the name of the Living Trust, a full probate court proceeding for the decedent’s estate is necessary in California to transfer that asset to the beneficiaries. This is an all too common scenario. However, a probate attorney can avoid the California probate process with a Heggstad petition.
Filing a Heggstad Petition in California to Avoid Probate (California Probate Code 850)
In California, where real property is pricey and expensive, a person’s principal residence is typically their most important asset. In California, to transfer the property to your intended beneficiary and loved ones, the preferred method is to have a probate lawyer establish a revocable living trust, and then put the home in the name of the trust. Living trusts are preferred because they avoid probate court, and the person administering the trust (called a successor Trustee), can easily follow the instructions set out in the trust regarding distributing the property or other trust asset to your beneficiary.
A family member or friend set up a living trust, but forgot to transfer an asset (such as a real property) into their living trust before his or her death. Uh oh! In general, even though a deceased person (commonly called a “decedent”) set up a Living Trust, if an asset is not titled in the name of the Living Trust, a full probate court proceeding for the decedent’s estate is necessary in California to transfer that asset to the beneficiaries. This is an all too common scenario. However, a probate attorney can avoid the California probate process with a Heggstad petition.
Avoiding The Probate Process with a Heggstad Petition
Luckily, if the deceased person set up a living trust, attorneys in California have a strategy of getting the title to the property changed to the name of the trust without doing a full probate. This simplified procedure is called the “Heggstad Petition”. The Heggstad Petition (named after the famous case Estate of Heggstad, (1993) 16 Cal App 4th 943), is a document a probate lawyer files with the court which argues that the person who established the trust (called the trustor, settlor or grantor) always intended for the home to be part of the trust, so the court should honor the settlor’s wishes. Filing a Heggstad petition is considerably faster and less expensive than a full probate proceeding. Heggstad Petitions have been codified into California law by California Probate Code 850. Heggstad Petitions are recognized by title and insurance companies and are the preferred method of getting an asset into a trust without going through a regular probate.
Building a winning case for Heggstad Petition:
The strength or weakness of Heggstad petitions depends on what the living trust says and what other estate planning documents the person who passed away executed. To have a successful Heggstad petition and avoid the full California probate process, the probate lawyer will review the decedent’s assets, living trust and other estate planning documents, and look for the following:
- General Assignment Helps Heggstad Petitions. This is a “catch-all’ trust document, which typically attempts to sweep all of a person’s assets into their trust. It’s a safety net of sorts, since if a certain asset is left out of the trust for whatever reason, this document can be used to show that it was the creators’ intention for that asset to always be part of the trust. A General Assignment is a great document to have for a successful Heggstad petition, as it shows the decedent’s written intent.
- Schedule of Assets Helps Heggstad Petitions. At the end of a trust document, there is a typically a schedule of assets, including the home and bank accounts. This schedule of assets is commonly referred to as “Schedule A.” An estate planning attorney includes a schedule of assets to show the trust maker’s intent of having these assets included as part of their trust. Showing the court that an asset is listed on the schedule of assets increases the chances of a successful Heggstad petition. Every proper estate plan should include a schedule of assets to make sure that if a Heggstad petition is ever filed, it will be successful.
- Pour Over Will Helps a Heggstad Petition. This document is not your traditional Will, but is often executed in conjunction with a living trust. The intent of the pour-over will, is to transfer any assets that were left out of the trust, back into the trust. The Will “pours over” assets subject to probate into the living trust, thereby allowing the trust makers’ wishes to be carried out. Another great document to have for a successful Heggstad petition, as it shows the decedent’s written intent.
- Trust Language Mentioning home Helps a Heggstad Petition. Language in the trust referencing a person’s home again goes to show that the person intended for the home to be part of the trust, and can be used to persuade the judge that the home belongs in the trust and should be transferred through a Heggstad petition instead of a regular probate case.
Assets Included in a Heggstad Petition.
The wonderful thing about a Heggstad petition is that it can be used to transfer various assets into a revocable trust, including real property, stocks, life insurance proceeds, money in a bank account, and other assets that a decedent forgot to transfer into their trust while they were alive. As long as the Heggstad case includes supporting documents like the general assignment, or specific language in a revocable trust referencing the asset that is the subject of the Heggstad petition process, a probate attorney can build a successful Heggstad petition for the decedent’s estate. The broad application of a Heggstad petition can save a client from having to do a full probate. Heggstad petitions are most commonly used for real property, but a Heggstad petition can be used for other assets as well.
Filing a Heggstad Petition and Obtaining a Court Judgment.
A Heggstad petition can be a useful tool in so far as it helps you avoid full probate in California, and is much quicker and cheaper than a full probate case. However, typically, probate courts in California are backed up, and with Covid, the length times have increased from what was 2-3 months in the past to 4-5 months currently. However, our firm has developed a way of going to court on an emergency basis to get Heggstad Petitions approved in a matter of weeks! Moreover, it does not matter what California county your loved one died in or what California county they owned property in—we can file a Heggstad petition using a local California court that accepts Heggstad petitions for properties located all over California. We can file the Heggstad petition to transfer the property (or properties) in Sacramento County, San Diego County, San Francisco County, Los Angeles, San Mateo County, and other counties.
The emergency Heggstad petition is not always possible and it depends on the set of facts and the interested parties involved, so contact us today to see if we can get your Heggstad petition approved quickly. If any of the beneficiaries has hired a trust litigation attorney and litigation is involved, then the emergency Heggstad petition will not be possible.
From Start to Finish.
When you hire us to file a Heggstad petition and transfer an asset that should have belonged in the trust (i.e., a piece of real estate in California) we will take care of getting the asset in the trust from start to finish. What that means is that we will be filing a Heggstad petition, obtaining a court order, certifying the court order, and then properly recording it in the appropriate county (i.e. San Francisco, San Mateo, or whatever county the property is located in), so that title to the property is properly updated on the property title report. All these steps are needed so the successor trustee is in a position where he or she has the authority to sell (or refinance) the asset if it will continue in the trust, or to distribute the asset to a beneficiary or loved one as part of an inheritance.
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