What is a Heggstad Petition

I recently had a client, Emily, who meticulously funded a revocable living trust over twenty years ago. She passed away peacefully, but a simple oversight – a bank account titled solely in her name – nearly derailed the entire estate plan. Her family faced a full probate, potentially costing them tens of thousands in fees and delaying access to assets for months. Fortunately, we were able to utilize a Heggstad Petition to correct the issue, saving them significant time and expense.

As an estate planning attorney and CPA with over 35 years of experience here in Escondido, I see these situations frequently. People assume that simply having a trust is enough, but proper funding – actually transferring ownership of assets into the trust – is the critical step many overlook. A Heggstad Petition, formally known as a Petition to Determine Settlement of Assets (Probate Code § 850), provides a mechanism to correct these unintentional omissions after death.

How Does a Heggstad Petition Work?

What exactly is a Heggstad Petition, and when is it appropriate? It’s technically not a “probate” in the traditional sense, but rather a court procedure designed to clarify where an asset should rightfully belong – namely, to the trust, even if it wasn’t formally transferred during the decedent’s lifetime. It essentially asks the court to declare that the decedent intended for the asset to be owned by the trust, and to order the asset transferred accordingly.

• What triggers the need for a Heggstad Petition? Typically, it arises when an asset is discovered after death that was meant to be held in the trust, but somehow remains titled in the decedent’s individual name. Common examples include bank accounts, brokerage accounts, or even real property.
• Who can file it? The trustee of the trust, or a beneficiary with standing, can initiate the petition.
• What evidence is required? Crucially, you need to demonstrate the decedent’s intent. This is often accomplished through the trust document itself, statements made to family members, and supporting documentation like account statements showing a history of funds flowing through the trust.

Why is a CPA’s Perspective Valuable with Heggstad Petitions?

As a CPA as well as an attorney, I often see how incorrect titling impacts tax implications. For example, if an asset remains in the decedent’s name, it receives a step-up in basis to fair market value on the date of death, which can significantly reduce capital gains taxes when the asset is eventually sold. However, if the asset is correctly transferred to the trust via a Heggstad Petition, that step-up in basis may be lost, potentially leading to higher tax liability.

We must carefully analyze each situation to determine the most advantageous course of action, balancing the cost of probate avoidance with the potential tax consequences. It’s not always a straightforward decision, and that’s where the dual perspective of an attorney-CPA is invaluable.

What are the Alternatives to a Heggstad Petition?

• Full Probate: If the Heggstad Petition is denied, or if it’s impractical to pursue, the asset will likely be subject to the full probate process. This means court supervision, creditor claims, and potentially significant delays and expenses.
• Small Estate Affidavit (Section 13100 Limit): For deaths on or after April 1, 2025, if the gross value of the estate is under $208,850, you generally do not need to open a full probate. You can use the ‘Affidavit for Collection of Personal Property.’ Note: This limit excludes cars, boats, and trust assets. However, this option is only available if the total value of assets passing outside of the trust is below this threshold.
• Spousal Property Petition (Probate Code § 13650): If the deceased was married and all assets are going to the surviving spouse, this is the most efficient type of probate. It allows for the transfer of unlimited assets to a surviving spouse without the 4-month creditor period or full administration. It typically takes only one hearing.

When is a Heggstad Petition Not the Right Solution?

A Heggstad Petition isn’t a panacea. It’s generally not appropriate if the decedent intentionally titled the asset in their name, or if there’s a dispute over whether the asset should rightfully belong to the trust. It’s also not effective if the asset is subject to a valid creditor claim. We always conduct a thorough analysis to ensure that pursuing a Heggstad Petition is the right strategy for our client’s specific circumstances.

How do enforcement rules in California probate court shape outcomes for heirs and fiduciaries?

The path through California probate is rarely a straight line; it requires precise adherence to statutory deadlines, accurate asset characterization, and strict fiduciary compliance. Without a clear roadmap, what begins as a standard administrative proceeding can quickly dissolve into a costly battle over interpretation, valuation, and beneficiary rights.

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 Types of California Probate

• Spousal Property Petition: California Probate Code § 13650
  The gold standard for surviving spouses. This petition allows for the transfer of community and separate property to the surviving spouse without the delays of full probate. There is no dollar limit on the value of assets transferred under this section.
• Small Estate Affidavit ($208,850 Limit): California Probate Code § 13100
  For smaller estates (valued under $208,850 as of April 1, 2025), this procedure allows successors to collect money and tangible personal property by presenting a notarized affidavit to the holder (e.g., the bank), bypassing the courts entirely.
• Petition for Succession (AB 2016): California Probate Code § 13151
  Designed for “house-only” estates. If the primary residence is worth less than $750,000, this court-supervised summary proceeding allows for the transfer of the property. It is faster and cheaper than full probate but requires a judge’s order to clear title.
• Ancillary Administration (Foreign Domicile): California Probate Code § 12501
  If the decedent lived in another state (e.g., Nevada) but owned a vacation home in California, the California courts have jurisdiction over that real estate. “Ancillary Probate” is the process used to admit the foreign will and distribute the California property.
• Special Administration (Emergency): California Probate Code § 8540
  When time is of the essence. If assets are in danger or a business needs immediate management, the court can appoint a Special Administrator. These powers are temporary and specific, intended only to hold the line until a general executor is appointed.
• The “Heggstad” Petition (Trust Cure): California Probate Code § 850
  Often mistaken for probate, this is actually a petition to avoid it. If a decedent had a trust but forgot to title an asset in the trust’s name, a Section 850 petition asks the court to declare that the asset belongs to the trust, bypassing the need for a full estate administration.