What is an 850 Petition for Assets

It started with a phone call from Alan, frantic. His mother, Beatrice, had meticulously funded her trust over twenty years, but a single oversight threatened to unravel everything. Beatrice recently passed, and a bank account containing $85,000 remained solely in her name – a mistake everyone assumed would be handled automatically. Now, the bank refused to release the funds without a court order, and Alan was staring at potentially six months of probate just for this one account, costing his family thousands in legal fees and administrative headaches. A seemingly small error, poised to create a large, expensive problem.

For over 35 years, I’ve practiced as both an Estate Planning Attorney and a CPA, here in Escondido, California. This dual perspective is critical because the tax implications of probate – particularly the loss of the step-up in basis on assets – are often overlooked. Many attorneys lack the CPA understanding to fully appreciate this nuance, potentially costing clients significant capital gains taxes down the road.

What exactly is an 850 Petition, and why is it so powerful?

The Section 850 Petition, formally a Petition for Order Regarding Property Not Subject to Probate (Probate Code § 850), is a relatively straightforward court procedure designed to transfer assets that should have been held by a trust into the trust’s ownership after the grantor’s death. It’s not a full-blown probate, but a focused, streamlined process that avoids the complexities and delays of traditional administration. Think of it as a “correction” mechanism for minor funding errors.

Essentially, it’s a way to tell the court, “This asset was always intended to be owned by the trust, but for a technicality, it remains in the decedent’s name.” The court then issues an order directing the institution holding the asset (like that bank in Alan’s case) to transfer it directly to the trustee, bypassing the probate process entirely.

How does it differ from probate, even a “small estate” probate?

Traditional probate, even the simplified affidavit process for smaller estates, involves a waiting period for creditors to file claims, a public record, and court supervision. The affidavit process, while faster, is still subject to limitations. 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.” An 850 Petition circumvents all of that. There’s no creditor waiting period, no public record, and minimal court oversight. It’s a much faster, cheaper, and more private solution.

However, it’s crucial to understand this isn’t a catch-all. It only applies to assets that were intended to be held by the trust. It won’t work if the decedent intentionally left the asset outside the trust for some reason.

What types of assets are typically handled with an 850 Petition?

• Bank Accounts: Like Alan’s mother’s situation, this is one of the most common uses.
• Investment Accounts: Stocks, bonds, mutual funds, and other investments held in the decedent’s name.
• Real Estate (Sometimes): While AB 2016 (Petition for Succession) is often used for smaller real estate holdings, an 850 Petition can be effective if the property was clearly intended for the trust. AB 2016 (Petition for Succession): “…if the estate is too big for an affidavit but the only asset is a primary residence worth less than $750,000, you can file a ‘Petition for Succession to Real Property’ (Probate Code § 13151). This requires a court order but avoids the full formal probate process.”
• Vehicles (Rarely): Usually handled through the DMV directly, but an 850 Petition might be necessary in complex situations.

The key is demonstrating to the court that the asset was intended to be part of the trust estate. Clear documentation – like trust provisions or statements from the trustee – is essential.

What’s the process, and how long does it take?

The process generally involves preparing a petition, filing it with the probate court, providing notice to interested parties (typically family members), and attending a hearing. The court will review the petition, consider any objections, and issue an order if everything is in order.

Compared to probate, it’s remarkably fast. A typical 850 Petition can be completed in 30 to 60 days, whereas a full probate can easily take six months or more. The cost is also significantly lower, often just a few thousand dollars in attorney’s fees compared to tens of thousands for full probate administration.

What if there’s a dispute?

If someone objects to the 850 Petition – perhaps a disgruntled heir believes the asset should have been distributed differently – the court will hold a hearing to resolve the dispute. This can add time and expense to the process, but it’s still generally faster and cheaper than a full probate trial.

What failures trigger contested proceedings and court intervention in California probate administration?

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.

• Options: Explore ways to avoid probate.
• Nuance: Check specific considerations.
• Administration: Manage administering a probate estate.

California probate is most manageable when authority is documented early, assets are classified correctly, and procedure is followed consistently from petition through closing. When the process is approached with realistic expectations about notice, claims, accounting, and dispute risk, the estate is more likely to move toward closure without avoidable conflict or delay.

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.