Performing due diligence when it comes to setting up an inheritance is highly recommended for anyone with a family. Having a living trust in place when your time on Earth has expired helps protect family members from lengthy and costly probate or contentious legal battles while they are still grieving your loss.
However, no matter how much time and effort we place in building a living trust, mistakes still happen. Real property or other assets may sometimes be unintentionally left out or never transferred to the trust. In California, this type of oversight can be remedied by filing what’s known as a Heggstad Petition.
What is a Heggstad Petition?
The Heggsted petition was formed after the Heggsted estate probate ruling in 1993. Prior to his death, Mr. Heggstad failed to record a grant deed to formally transfer some property to the trust. However, because he had previously listed the property on the trust’s Schedule of Assets, there was a clear intent to transfer the property to the trust, which prompted the court to rule that it was, in fact, part of the trust.
Since this ruling, this measure of intent has been redefined to include assets that aren’t listed on the Schedule of Assets but include written, legal proof that it was always the decedent’s INTENT to include the asset.
When should I file a Heggstad Petition?
Some reasons to file a Heggstad Petition include:
- Property not being transferred or being incomplete at the time of death;
- Flawed paperwork
- Failing to change the title of the property; or
- Failing to return the property to the trust after a refinance.
Be aware that if the court denies the petition, the estate loses any fees associated with filing and may delay the distribution of assets even longer than a normal probate.
How do I file a Heggstad Petition?
Heggstad Petitions are filed under California Probate Code 850. You may file for a petition if you meet one or more of the following criteria:
- A trustee holds the title to the property, but another person claims ownership;
- A trustee claims title to a property that is held by someone else; or
- the property is claimed to be subject to a creditor
There is no formal document to fill out, but there is specific information that must be included:
- A copy of the decedent’s trust, including the Schedule of Assets;
- Relevant decedent and beneficiary Information;
- A description of the assets in question; and
- Clear and legal documentation of the decedent’s intent to include the property in the trust.
Filing a Heggstad Petition can be quite arduous; providing vague language, such as “all property” may not be beneficial or enough to grant the petition, and you must provide a 30-day notice to all interested parties before filing. Bottom line, you will definitely want to talk to a probate attorney to correctly file the Heggstad Petition.