Using Heggstad to Avoid Probate

I recently spoke with Mac, a man devastated to learn his father’s meticulously crafted estate plan was undermined by a single oversight. His father had a trust, a great one, covering virtually all assets. But a recently acquired investment account, totaling over $150,000, had simply been…forgotten. It wasn’t titled in the name of the trust. The cost? Easily $35,000 in probate fees and a six-month delay in accessing those funds for his mother. This scenario, unfortunately, is far more common than people realize.

What Happens When an Asset is Left Out of a Trust?

It’s a surprisingly frequent issue. You spend the time and money to create a trust, diligently funding most assets, believing your loved ones will avoid the delays and expenses of probate. Then, an account is opened, a gift is received, or a piece of property is acquired, and it slips through the cracks. It doesn’t invalidate the trust itself, but that single “forgotten” asset will likely require probate if not addressed. This is where a Heggstad Petition, outlined in Probate Code § 850, comes into play.

How Does a Heggstad Petition Work?

Essentially, a Heggstad Petition asks the court to declare that the decedent intended an asset to be part of the trust, even if it wasn’t formally transferred. It’s a powerful tool to “cure” a titling error and ensure that asset passes according to the trust’s terms, avoiding probate. The court will look at evidence demonstrating the decedent’s intent. This can include trust documents, account statements, emails, and even testimony from family members.

What Evidence is Needed for a Successful Heggstad Petition?

The stronger the evidence of intent, the greater the likelihood of success. Crucially, we need to demonstrate the asset was meant to be in the trust.

• Trust Documents: The trust itself, particularly any provisions referencing similar assets.
• Schedule A: Many trusts include a Schedule A listing assets intended to be covered.
• Account Statements: Statements showing the account was opened before the trust was fully funded, or correspondence indicating an intention to transfer it.
• Decedent’s Records: Emails, notes, or other records suggesting the asset was meant for the trust.
• Witness Testimony: Statements from family members or advisors familiar with the decedent’s wishes.

What are the Limitations of a Heggstad Petition?

While incredibly useful, Heggstad Petitions aren’t a magic bullet. The court isn’t obligated to grant the petition, even with compelling evidence. There must be clear and convincing evidence of the decedent’s intent. Also, it’s often used for smaller, less contentious assets. For larger sums or complex situations, a full probate might still be necessary, or a Heggstad Petition may be a component of a broader probate strategy.

Why is Having a CPA Involved Crucial?

As an attorney and a CPA with over 35 years of experience, I’ve seen firsthand how crucial tax planning is in estate administration. When using a Heggstad Petition, the tax implications of transferring an asset to a trust after death must be carefully considered. A stepped-up basis is lost, meaning the beneficiaries will inherit the original cost basis, potentially leading to higher capital gains taxes when the asset is eventually sold. Understanding these implications and minimizing the tax burden is where my dual expertise proves invaluable. Properly valuing the asset at the date of death is also critical, and my CPA background allows me to do that efficiently and accurately.

What About Transfer on Death (TOD) Deeds?

While TOD Deeds are a viable alternative for real property, remember that a Revocable Transfer on Death Deed is a valid alternative to probate for residential property, but it MUST be recorded within 60 days of notarization to be valid. Furthermore, beneficiaries assume liability for the decedent’s debts up to the value of the property for 3 years after death. They offer a different probate avoidance strategy, but require careful planning and attention to deadlines.

What if I Have Significant Cash and Stocks?

For deaths occurring on or after April 1, 2025, the gross value threshold for using a Small Estate Affidavit (Probate Code § 13100) has increased to $208,850. This procedure allows successors to collect personal property without court involvement. However, this total MUST NOT include assets held in joint tenancy, trust, or those with named beneficiaries (POD/TOD), but MUST include the value of any real property unless that property is handled via a separate summary procedure.

What determines whether a California probate estate closes smoothly or turns into litigation?

California probate is designed to provide court-supervised transfer of property, yet cases often break down when authority is unclear, required steps are missed, or disputes arise over assets, notice, and fiduciary conduct. When the process is misunderstood, families can face avoidable delay, escalating conflict, and increased exposure to creditor issues, hearings, or litigation before the estate can close.

To protect against specific family risks, review heir disputes without a will, check for left-out heirs issues, and be vigilant for signs of elder financial abuse.

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 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 those with named beneficiaries (POD/TOD), but MUST include the value of real property unless handled via a separate summary procedure.
• 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, regardless of the estate’s value. It is strictly for assets passing to a spouse and requires the property be characterized as community property or quasi-community property.
• 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.