Using a Probate Code 850 Petition

Randy just received a call from his CPA. Randy meticulously funded his Revocable Living Trust years ago, or so he thought. It turns out a valuable rental property in Palm Springs – generating $36,000 a year in income – was never formally transferred into the Trust’s name. He’s facing significant probate costs, and his heirs are understandably upset that their inheritance will be diminished due to legal fees. He’s frantic, asking what can be done to avoid a full probate.

The situation Randy finds himself in is surprisingly common. Clients often prepare a Trust, carefully list assets on the Schedule A, and then… life happens. An account is overlooked, a deed isn’t signed, or simply, things fall through the cracks. Fortunately, California law provides a mechanism to correct these unintentional oversights: the Heggstad Petition, formally known as a Probate Code § 850 Petition.

What Does a Section 850 Petition Actually Do?

Essentially, a Section 850 Petition asks the Court to declare that an asset, despite not being formally titled in the name of the Trust, was intended to be a Trust asset. It’s a powerful tool for correcting a technical defect in title without the full expense and delay of probate. The Court will examine the decedent’s intent, usually demonstrated through Trust documents, correspondence, and other evidence, to determine if the asset should legally be considered part of the Trust estate.

How is Intent Established in a Section 850 Petition?

Proving intent is key. We look for clear evidence demonstrating the decedent’s desire that the asset be held within the Trust. This includes:

• StrongTrust Documents: A well-drafted Trust with a comprehensive Schedule A is the best starting point.
• StrongAccount Statements: Statements showing the asset listed on the Schedule A, even if the title doesn’t reflect it.
• StrongCorrespondence: Letters, emails, or notes discussing the asset and the intention to hold it within the Trust.
• StrongBeneficiary Designations: While not directly related to the asset itself, consistent beneficiary designations aligning with the Trust’s intent strengthen the argument.

The standard of proof is generally lower than in a full probate contest. We aren’t necessarily looking for absolute, ironclad proof, but rather a preponderance of evidence indicating the decedent’s intention.

What Assets Can a Section 850 Petition Address?

A wide variety of assets can be the subject of a Section 850 Petition, including:

• StrongReal Property: The most common application, as in Randy’s case.
• StrongBank and Brokerage Accounts: Even if the account isn’t titled in the name of the Trust.
• StrongStocks and Bonds: Similar to bank accounts, intent is crucial.

However, a Section 850 Petition cannot be used to circumvent valid creditor claims or to address assets that were intentionally excluded from the Trust. It is strictly a remedy for correcting inadvertent omissions.

How Does This Differ From Other Probate Procedures?

Several options are available to avoid full probate, each with its own requirements and limitations. Here’s a quick overview:

• StrongSmall Estate Affidavit (Probate Code § 13100): 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. 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.
• StrongAffidavit for Real Property of Small Value (Probate Code § 13200): For real property interests valued at less than $69,625 (the 2025/2026 adjusted limit), successors can file an affidavit with the Court Clerk and record a certified copy with the County Recorder, completely bypassing the need for a hearing.
• StrongPetition for Succession (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, though it is significantly faster than full probate.

The Section 850 Petition stands apart because it addresses assets that were intended to be within the Trust but weren’t, rather than simply qualifying the estate for a streamlined process based on value.

Why a CPA-Attorney is Particularly Well-Suited to Handle These Petitions

After 35+ years of practicing as both an Estate Planning Attorney and a Certified Public Accountant, I’ve seen firsthand how crucial the interplay between legal and tax implications can be. A CPA understands the importance of “step-up in basis” – the tax benefit of valuing assets at their fair market value at the time of death. If an asset is incorrectly probated, the heirs may miss out on this valuable tax advantage. We can seamlessly integrate the Section 850 Petition with a comprehensive estate administration strategy to ensure both legal and tax goals are met. Proper valuation is also paramount, and my CPA background allows me to oversee that process efficiently.

What are the Costs Associated with a Section 850 Petition?

The costs will vary depending on the complexity of the case, but generally, a Section 850 Petition is less expensive than full probate. Filing fees, court reporter costs (if a hearing is required), and attorney’s fees will all apply. It’s essential to obtain a clear fee estimate from an attorney before proceeding.

For Randy, a Section 850 Petition offers a viable path to preserving his estate for his heirs. It’s a testament to the fact that even with careful planning, life can throw curveballs, and California law provides mechanisms to address those unexpected challenges.

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.

To protect against specific family risks, review heir disputes without a will, check for left-out heirs issues, and be vigilant for signs of elder financial abuse.

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.