Estate Planning
Heggstad Petition
When an asset was left outside the trust, a full probate may not be required.
When an Asset Was Left Outside the Trust
Creating a living trust is only part of the estate-planning process. Assets also need to be properly connected to the trust. Problems often arise after death when the successor trustee discovers that a house, account, or other significant asset is still titled in the deceased person's individual name — even though the estate plan indicates that the asset was intended to be part of the trust.
That does not necessarily mean the asset must go through a full probate.
California recognizes a procedure commonly referred to as a Heggstad petition, named after Estate of Heggstad (1993) 16 Cal.App.4th 943. In Heggstad, the Court of Appeal recognized that a property owner can effectively declare that property is held in trust without executing a separate transfer deed where the required written evidence of the trust and the property exists. California Probate Code section 15200 likewise recognizes that a trust may be created by an owner's declaration that the owner holds property as trustee.
Today, a petition to confirm property as belonging to a trust is commonly brought under Probate Code section 850. That statute permits a trustee or other interested person to petition where the trustee claims real or personal property whose title or possession is held by another. California courts continue to recognize section 850 proceedings seeking confirmation of assets to a trust under Estate of Heggstad.
When Can a Heggstad Petition Help?
A Heggstad petition may be appropriate when the deceased person created a valid trust and there is sufficient written evidence showing an intention that a particular asset belong to the trust, but the formal transfer was never completed.
A common example involves real estate. Someone creates a revocable living trust and identifies the residence as a trust asset, but the deed remains in the individual's name when that person dies. Rather than automatically commencing a full probate solely to transfer the property, the successor trustee may be able to petition the Probate Court for an order confirming that the property belongs to the trust.
The quality of the documentation matters. The trust instrument, schedules of trust assets, assignments, deeds, estate-planning documents, and other writings should be reviewed carefully to determine whether they sufficiently identify the property and demonstrate the settlor's intent. California law imposes specific written-instrument requirements for a trust involving real property. Prob. Code, § 15206.
How the Heggstad Petition Process Works
The successor trustee or another qualifying interested person files a petition asking the Probate Court to determine that the particular property belongs to the trust. The petition identifies the asset, explains the trust and ownership history, presents the written evidence demonstrating the deceased settlor's intent, and asks the court to confirm the property as a trust asset.
Probate Code section 851 imposes specific notice requirements for section 850 proceedings. Among other things, the petition and notice generally must be served at least 30 days before the hearing on specified interested persons, and the notice must adequately identify the property involved. For real property, the statute requires the notice to state the street address or other location information and the assessor's parcel number.
If the court is satisfied that the property belongs to the trust, it can enter an order confirming the asset as trust property. California courts continue to grant unopposed petitions seeking precisely that relief under Probate Code section 850 and Estate of Heggstad.
Why a Heggstad Petition Can Matter
The practical significance can be substantial. If the principal asset left outside the trust is a California residence, confirming that property as a trust asset may allow the successor trustee to administer it under the trust rather than requiring an entirely separate formal probate merely because title was never properly changed.
But a Heggstad petition is not an automatic cure for every unfunded trust. The court must have an adequate legal and evidentiary basis for determining that the asset belonged to the trust. If the estate-planning documents do not sufficiently identify the property or demonstrate the settlor's intent, or if heirs or other interested persons dispute trust ownership, the matter can become considerably more complicated. Section 850 proceedings can involve contested property rights and discovery, and the statute expressly permits discovery after service of the petition and notice of hearing.
A Trust Should Be Reviewed Before Probate Is Opened
When someone dies with a living trust but an important asset remains in the person's individual name, the first question should not automatically be, "How do we open probate?" The better question is, "Why is this asset outside the trust, and is there evidence that it was intended to be there?"
Wagley Law reviews the trust, amendments, schedules, assignments, deeds, title history, and related estate-planning documents to determine whether a petition to confirm the asset to the trust may be available before proceeding with a full probate administration.
Questions About an Asset Outside the Trust?
Contact Wagley Law to discuss whether a Heggstad petition may be available in your situation.