Loose Ends

 Hoping to save his children the cost and inconvenience of a probate proceeding after he died, Joe Client had executed a living trust. He had funded his trust, taking title to his assets as trustee of his trust.
Later, Joe re-financed his house. He took the house out of the trust, deeding the property back to himself, as “Joe Client, an unmarried man”. Then, before he could put the house back in the trust, he died.
His children, the beneficiaries of his trust, want to know, will they have to subject the house to probate?
If the aggregate gross value of assets in Joe’s name, alone, at his death exceeded $150,000, there would ordinarily have to be a probate, a legal procedure that takes about a year and costs thousands of dollars,
In this case, however, we may be able to avoid a full-blown probate procedure. The remedy lies in the filing of a Heggstad Petition in the Probate Court. In such a proceeding, the petitioner shows that the property was supposed to be in the decedent’s Trust, but for reason of inadvertence or other good cause the transfer to the trust was not accomplished. For example, the property may have been described in an exhibit to the trust agreement listing assets to be included in the trust. Or, as in the above case, the petitioner might be able to demonstrate that the property was being removed only temporarily, and that the decedent intended to re-transfer it to the trust.
The Court may find that (1) there is a trust, (2) the Petitioner is the Trustee of the trust, and (3) the property in question should be deemed to be in the trust.
There’s no guarantee that the Heggstad Petition will be successful. Every case is different, but it may be worthwhile to ask an experienced attorney to analyze the facts and consider the reasonable likelihood that such a petition would be granted.
Typically, the hearing on a Heggstad Petition may be heard, and an Order obtained, within a few months, at far less expense than that of a normal probate. Thus, the advantages of success may be worth the risk of some time and money, to hopefully avoid the longer and more expensive probate procedure.
Jerry Kessler practices law in Santa Clarita. He may be reached at 661-255-1001.