I have written before about Heggstad petitions. In particular you can see my formal article, with case background information, on my website at http://www.californiaprobate.info/probate/petition-related-to-trusts
As stated there a Heggstad petition is a way to get property (real and personal) into your California trust AFTER death. It can be used for almost any assets: bank accounts, stock accounts, stock certificates, bonds, partnership interests, LLC interests, timeshares, houses, real estate, real property, condos, townhouses and more. I should clarify that for deeded assets (like the last 6 named above) the property has to be in California. Getting another state to honor a California Heggstad order may be tough. It’s possible it can be done but there are probably better options.
Today I want to focus on Heggstad petitions and what kind of intent you should look for. It’s different depending on if the asset is real property or personal property. The standards for real property are stricter. That is, you need to convince the probate Court Judge that the decedent had the INTENT to have the asset in their trust when they died. That is they owned an asset and for whatever reason it wasn’t properly titled in their trust when they died.
With real property it needs to specific written intent. In the actual Estate of Heggstad case the real property was listed on the attached schedule of assets and that schedule was signed. I have seen others where the property is specifically listed in the document, by address or other description, and that is treated as being good intent. The key with real estate is specific mention of the property in the trust or in another document that connects to the trust in some way. I have a case right now where my clients tell me mom told her Realtor she wanted the property in the trust. The odds are significant that the Court would not approve a Heggstad based on that oral evidence. Needs to be in writing!
With personal property the rules are looser. It can be listed on the schedule of assets. In most Courts it can also be shown by a general statement of intent that all assets are to be in the trust. In my estate planning practice we generally prepare a “general transfer” document to help with this problem. It could be a letter to the stockbroker asking them to put the account into the trust. Basically there are a lot of ways to show the intent.
The key, beit real or personal property, is convincing the Court of the decedent’s intent. The more information you can provide the better. You do not want to just state that the decedent intended it to be in the trust. You want to show WHY the decedent intended it to be in trust. Show what actions they took to demonstrate their desire to put that asset in the trust. I like to provide written declarations by people with knowledge, copies of documents, and basically anything I can add that might help push the Judge over the edge to agree with our request. The Judge generally wants to agree with you because they don’t want to force you into a probate but they also want to make sure they are complying with the law.
A Heggstad petition might sound simple but it is a complex trust petition. It should be handled by someone who does them a lot and is familiar with the variables and possibilities.
Call or email me to discuss YOUR Heggstad petition! -John