Moving Assets to Trust After Death

Randy called, distraught. He’d meticulously drafted a trust years ago, funded it with most of his assets, and even had a will ensuring anything left out would flow into the trust. But he’d forgotten to formally transfer the deed to his beach house into the trust before he suffered a mild stroke. Now, his daughter, Lisa, was facing a full probate just for that one property, costing her thousands in legal fees and delaying her ability to rent it out for much-needed income. Randy’s careful planning was significantly undermined by a single oversight, and Lisa was left bearing the financial burden.

This scenario, unfortunately, is all too common. People assume that simply having a trust is enough, but the crucial step of transferring ownership of assets – real estate, brokerage accounts, even vehicles – is often overlooked. It’s not enough to list the assets on a Schedule A within your trust document; legal title must actually reflect the trust as the owner.

What Happens if I Forget to Transfer an Asset to My Trust?

If an asset remains in your individual name at the time of your death, it doesn’t automatically become part of your trust. Instead, it becomes subject to probate, even if your will directs it to your trust. Probate is a public, court-supervised process that can be time-consuming, expensive, and emotionally draining for your loved ones. The good news is there are ways to address this, even after your passing.

Can a Heggstad Petition “Fix” a Missed Asset?

Absolutely. If you intended an asset to be in your trust but failed to retitle it, a Section 850 Petition – often called a Heggstad Petition (after the landmark case) – can obtain a court order confirming the asset as trust property. This ‘cures’ the title defect and avoids a full probate estate for that single asset. It’s a relatively streamlined process, but it does involve a court filing and a hearing. We’ve successfully used Heggstad Petitions for clients in situations just like Randy’s daughter Lisa, avoiding significant probate costs and delays.

What About Real Estate Specifically? What are My Options?

Real estate is a common culprit in these situations. If a primary residence isn’t properly titled to the trust, you have a few options. Under AB 2016 (Probate Code § 13151), a primary residence valued up to $750,000 qualifies for a ‘Petition for Succession’ rather than full probate administration. This is a court-filed petition, requiring a hearing and a Judge’s Order, but it is faster than full probate. However, for property that doesn’t qualify or if the value exceeds the limit, a Heggstad Petition is the way to go. Alternatively, for smaller value real property interests, the Affidavit for Real Property of Small Value (Probate Code § 13200) can be used for real property interests valued at less than $69,625 (the 2025/2026 adjusted limit).

What if I Have a Small Estate? Can I Avoid Probate Altogether?

For deaths occurring on or after April 1, 2025, the gross value threshold for using a Small Estate Affidavit (Probate Code § 13100) has increased to $208,850. This procedure allows successors to collect personal property without court involvement. However, this total MUST NOT include assets held in joint tenancy, trust, or those with named beneficiaries (POD/TOD), but MUST include the value of any real property unless that property is handled via a separate summary procedure.

How Does This Impact Transfer on Death Deeds?

A Revocable Transfer on Death Deed is a valid alternative to probate for residential property, but it MUST be recorded within 60 days of notarization to be valid. Furthermore, beneficiaries assume liability for the decedent’s debts up to the value of the property for 3 years after death.

What About Assets That Pass to My Surviving Spouse?

This is often a simpler scenario. The Spousal Property Petition (Probate Code § 13650) allows for the transfer of unlimited assets to a surviving spouse without full probate administration, regardless of the estate’s value. It is strictly for assets passing to a spouse/domestic partner and requires the property be characterized as community property or quasi-community property.

What Role Does a CPA-Attorney Play in Preventing These Issues?

After 35+ years of practicing as both an Estate Planning Attorney and a CPA, I’ve seen firsthand how critical this dual expertise is. A CPA understands the nuances of asset valuation and the implications of “step-up in basis” for capital gains purposes. This knowledge is invaluable when structuring a trust and ensuring assets are properly titled. It’s not simply about avoiding probate; it’s about minimizing tax liabilities and maximizing the inheritance for your beneficiaries. We routinely review our clients’ asset ownership, ensuring everything is correctly titled and working in harmony with their estate plan.

Don’t let a forgotten deed or untransferred account derail your carefully crafted estate plan. Proactive planning and regular review are key to protecting your legacy and providing peace of mind for your loved ones.

What separates an efficient California probate process from a drawn-out conflict over authority and assets?

California probate is designed to provide court-supervised transfer of property, yet cases often break down when authority is unclear, required steps are missed, or disputes arise over assets, notice, and fiduciary conduct. When the process is misunderstood, families can face avoidable delay, escalating conflict, and increased exposure to creditor issues, hearings, or litigation before the estate can close.

A stable probate administration outcome usually follows from clarity, consistency, and readiness for court review, especially when multiple stakeholders and competing interpretations are involved. When documentation supports enforcement and timelines are respected, families are less likely to face preventable escalation.

Verified Authority on California Probate Alternatives

• Personal Property Affidavit ($208,850 Limit): California Probate Code § 13100 (Small Estate Affidavit)
  For deaths on or after April 1, 2025, the gross value threshold for using a Small Estate Affidavit has increased to $208,850. This procedure allows successors to collect cash, stocks, and personal items without court involvement. Warning: This total MUST NOT include assets held in joint tenancy, trust, or named beneficiaries (POD/TOD), but MUST generally include the value of all real property in the estate.
• Primary Residence Succession (AB 2016): California Probate Code § 13151 (Petition for Succession)
  You must distinguish between the Affidavit for Real Property of Small Value (strictly for property <$69,625) and AB 2016. Under AB 2016, a primary residence valued up to $750,000 qualifies for a ‘Petition for Succession’ rather than full probate. This is a court-filed Petition requiring a Judge’s Order, though it is significantly faster than full administration.
• Spousal Property Petition (Unlimited): California Probate Code § 13650 (Spousal Transfers)
  This powerful alternative allows for the transfer of unlimited assets to a surviving spouse or domestic partner without full probate administration. It applies to any asset passing to the spouse, whether characterized as community property, quasi-community property, or separate property (via Will).
• Trust Assets & The “Heggstad” Petition: California Probate Code § 850 (Heggstad Petition)
  If a decedent intended an asset to be in their trust (e.g., listed on Schedule A) but failed to retitle it (the “Oops” factor), a Section 850 Petition can obtain a court order confirming the asset as trust property. This “cures” the title defect and avoids opening a full probate estate for that single asset.
• Vacant Land & Timeshares: California Probate Code § 13200 (Real Property of Small Value)
  For real property interests valued at less than $69,625 (the 2025/2026 adjusted limit), successors can file an Affidavit for Real Property of Small Value with the Court Clerk and record a certified copy with the County Recorder. This completely bypasses the need for a hearing or judge’s order.
• Vehicle & Vessel Transfers (DMV): DMV Form REG 5 (Affidavit for Transfer Without Probate)
  Vehicles and vessels may be transferred outside of probate using the Affidavit for Transfer Without Probate (REG 5). Critically, the value of the vehicle is excluded from the $208,850 small estate calculation, meaning a high-value car does not disqualify an estate from using summary procedures.
• Digital Asset Access (RUFADAA): California Probate Code § 870 (RUFADAA)
  Even in summary administration, digital assets can be locked. Without specific RUFADAA language (Probate Code § 870) in your Will or Trust, service providers like Coinbase and Google can legally deny successors access to digital wallets and accounts, forcing a full probate just to retrieve them.