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Heggstad Petition in California

A Heggstad petition is an important tool in California probate law that allows for the correction of an oversight where assets were intended to be part of a trust but were never formally transferred into it. This kind of petition is based on the landmark case of Estate of Heggstad (1993) 16 Cal.App.4th 943.

The Heggstad case itself dealt with a situation where an individual had a written declaration of trust and an attached schedule of assets. However, one of the properties listed was never formally transferred into the trust before the individual’s death. The court found that the clear intent was for the property to be part of the trust and thus permitted its transfer into the trust without undergoing a full probate process.

The importance of a Heggstad petition in California is multifaceted:

  1. Avoiding Probate: Probate can be a lengthy and expensive process. If a property was meant to be a part of a trust but wasn’t formally transferred, it would typically have to go through probate upon the death of the decedent. A successful Heggstad petition allows for the property to be moved into the trust without the need for probate, saving time and money.
  2. Upholding the Settlor’s Intent: The primary purpose of the Heggstad petition is to ensure the settlor’s intent is carried out, even if there was an oversight or mistake in failing to transfer the asset into the trust.
  3. Flexibility and Efficiency: The petition allows for a streamlined process to correct an oversight, making it easier for trustees and beneficiaries to administer the trust and distribute assets.

Examples of situations where a Heggstad petition might be useful based on subsequent cases:

  • Ukkestad v. RBS Asset Finance, Inc. (2015) 235 Cal.App.4th 156: In this case, the California appellate court extended the Heggstad principle to assets that were not specifically listed in the trust schedule but were generally referenced. The court determined that a general reference to “all of the Grantor’s right, title, and interest in and to all real and personal property owned by the Grantor at the time of his death” was sufficient to demonstrate an intent to transfer the assets into the trust.
  • Camara v. R. J. Reynolds Tobacco Co. (1998) 67 Cal.App.4th 809: In Camara, the decedent had assets, including stock, which were intended to be in the trust. The stock was not properly transferred before death. The court, in this case, permitted the stock to be moved into the trust via a Heggstad petition because the trust document demonstrated the intent to include the stock.

In conclusion, the Heggstad petition is a valuable tool in California probate law that allows for the rectification of oversights regarding trust asset transfers. It preserves the settlor’s intent and avoids the need for potentially costly and time-consuming probate proceedings.