Using Heggstad to Avoid Probate

Randy just called, frantic. His father passed away last month, and despite a clear trust, Randy discovered his dad hadn’t transferred his rental property into the trust’s name. Now, after years of meticulous planning, Randy is facing the full weight – and cost – of probate, potentially wiping out a significant portion of the inheritance for his sister and himself. This happens more often than you think.

The good news is, there’s often a solution: a Heggstad Petition. As an estate planning attorney and CPA with over 35 years of experience here in Temecula, I’ve guided countless clients through this frustrating scenario. It’s a powerful tool, but understanding the nuances is critical. Many people believe a trust automatically protects all assets, but that’s only true if the assets are titled in the name of the trust.

What Happens When an Asset Isn’t Properly Titled in a Trust?

Let’s be clear: a trust document is just a set of instructions. It doesn’t magically transfer ownership. Proper titling – changing the legal owner of an asset to the name of the trust – is what actually ensures the asset avoids probate. When an asset like a house, brokerage account, or even a vehicle is left outside the trust, it becomes part of the probate estate, subjecting it to court supervision, delays, and expenses.

How Does a Heggstad Petition Work?

The Heggstad Petition, formally a Probate Code § 850 Petition, is a request to the court to legally recognize that the decedent intended an asset to be owned by the trust, even though it wasn’t formally transferred. Essentially, it’s a “do-over” for a missed step. The court can issue an order directing the transfer of the asset to the trust, effectively curing the title defect. It avoids the necessity of fully administering the probate estate for that specific asset.

What Proof is Needed for a Successful Heggstad Petition?

The petition must demonstrate clear and convincing evidence of the decedent’s intent. This typically includes:

Original Trust Document: Showing the asset should have been included.
Schedule A (or equivalent): A list within the trust document detailing the assets intended to be held by the trust.
Testimony from You and/or Witnesses: Statements confirming the decedent’s intentions.
Financial Records: Demonstrating the asset was managed with the understanding it was intended for the trust.

What are the Costs Associated with a Heggstad Petition?

While significantly less expensive than full probate, a Heggstad Petition still involves court filing fees and attorney’s fees. The amount will depend on the complexity of the case and the value of the asset. However, consider the alternative: probate costs in California typically range from 4% to 6% of the gross estate value. A Heggstad Petition can often be resolved for a fraction of that amount.

Can a Heggstad Petition Be Used for All Assets?

Not necessarily. It’s most commonly used for real estate, but can also apply to other titled assets like bank accounts or stocks. However, if the asset is subject to a creditor’s claim, the Heggstad Petition may be more complicated. Also, if the decedent’s intent is unclear or disputed, the court may deny the petition.

What if There’s No Trust at All?

A Heggstad Petition is specifically for correcting omissions in an existing trust. If there’s no trust, the asset will be distributed according to the decedent’s will (if one exists) or California’s intestacy laws (if there’s no will). In those cases, full probate is usually required.

Why is a CPA’s Perspective Important?

As a CPA as well as an attorney, I understand the tax implications of asset transfers. Properly titling assets into a trust isn’t just about avoiding probate; it’s about maximizing the step-up in basis for capital gains purposes. When assets are transferred through a trust, the beneficiaries receive a “fresh start” basis, which can significantly reduce capital gains taxes when the assets are eventually sold. Ignoring this aspect can lead to unnecessary tax liabilities.

What About Transfer on Death (TOD) Deeds and Other Probate Avoidance Tools?

While TOD deeds (Probate Code § 13151) and other methods like payable-on-death (POD) or transfer-on-death (TOD) designations are excellent tools, they don’t cover everything. They’re often limited to specific types of assets and may not provide the same level of control and flexibility as a trust. A comprehensive estate plan should incorporate multiple strategies to ensure all assets are protected.

Don’t let a simple oversight undo years of careful planning. If you find yourself in Randy’s situation, don’t delay. Contacting an experienced estate planning attorney can make all the difference in preserving your family’s inheritance.

What causes California probate cases to spiral into delay, disputes, and extra cost?

Success in probate court depends less on the size of the estate and more on the accuracy of the petition and the behavior of the fiduciary. Whether the issue is a forgotten asset, a contested creditor claim, or a disagreement among siblings, understanding the procedural triggers for court intervention is the best defense against prolonged administration.

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.