A Heggstad petition is used when there is a real property or asset that is excluded from a deceased person’s Living Trust. This happens when the title of a real property or other asset is not legally or formally transferred to the Living Trust.
A trustee or beneficiary would typically have to go through probate in order to inherit or distribute the forgotten property or asset, but California Probate Code 850 gives the option of skipping the normally tedious probate process with a Heggstad petition.
If successfully filed, the petitioner will get a court order declaring that the property is in fact a trust asset, even though title to the property was not legally or formally transferred into the trust. This is possible if the property was listed on the trust’s Schedule of Assets, which shows the intent of including the property in the trust.
The filing process for this petition is usually started by a trustee, beneficiary, or other interested person with the help of an experienced Los Angeles probate attorney. The goal of filing a Heggstad petition is to prove to the probate court that the decedent had intended to include a real property or asset in his Living Trust before passing away.
There are several common reasons why this tool is used by California residents, including:
The person who created a Living Trust simply forgot to transfer property into it
The paperwork to transfer a property or asset into a trust was somehow flawed
The person who created the trust died before the transfer of property into the trust could be completed
The person who created the trust was unaware that they needed to change the title of the property
There are also some circumstances in which real property that had been previously transferred into a trust gets removed from that trust so the property could be refinanced. In such a scenario, one might file a Heggstad Petition if the property was never put back into the trust if there was a clear intent that it would be re-transferred once the refinancing was completed.
However, the main reason to file a Heggstad Petition (if your situation qualifies) is to avoid the very real costs of the probate process in California.
Each family situation is unique and not all Heggstad petitions will be identical, so we’ve identified some general requirements to maximize your chances of a successful Heggstad petition:
A copy of the decedent’s Living Trust
The Living Trust’s Schedule of Assets
The property deed
Information about the decedent, heirs, and beneficiaries
After a review of your family’s situation, your probate attorney will be able to confirm any other information required to file a Heggstad petition.
The name of the petition comes from a 1993 California court case for the Estate of Heggstad. Before Mr. Halvard L. Heggstad passed away, he executed his Living Trust and identified the items he wished to include in and transfer to his trust in a document called the Schedule of Assets. One of these assets was a 34.78% interest in a property as a co-owner.
While Mr. Heggstad’s property interest was listed in his trust’s Schedule of Assets, he failed to properly transfer title of his interest to his Living Trust. A possible reason for this is that the property interest was mislabeled as a “partnership interest” in his Schedule of Assets.
After Mr. Heggstad’s passing, his family discovered this mistake and took the matter to court, claiming that it was Mr. Heggstad’s intention to include the property in his trust, citing his Schedule of Assets.
The court ruled that having assets listed on such a schedule was sufficient for demonstrating intent to include those assets in a trust. Because of the Heggstad court case, adding assets into a trust after death is possible as long as the family can demonstrate that there was intent to do so.
It is always a good strategy to work with a probate attorney when dealing with the management and distribution of assets in a Living Trust. In this particular process, you must file a verified petition that states the relevant facts of the case and includes all names and addresses for everyone who must be notified of the petition.
There will then be a hearing for the petition. The court must give 30 days’ notice to all parties involved. At this hearing, you have the opportunity to present documentation that supports the petition.
You can generally expect the Heggstad Petition process to be complete within 60 days, from the preparation and filing of the petition to the final decision by the judge. This process is much faster compared to a full probate, which can take years to complete and cost thousands of dollars.
If you would like to learn more about filing a Heggstad Petition, contact our team of trusted probate attorneys for a free consultation. We speak Mandarin, Cantonese, Taiwanese, and Vietnamese.
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Diamond Bar, CA 91765
Amity Law Group, LLP