Using a Probate Code 850 Petition

I recently had a client, Mac, call me in a complete panic. He’d meticulously crafted his estate plan over 30 years, including a living trust, but he’d failed to update the title of his rental property to reflect the trust ownership. He passed away unexpectedly, and now his daughter was facing a full probate, costing her tens of thousands in legal fees and delaying access to rental income. A simple oversight, compounded by inaction, turning a streamlined transfer into a nightmare.

What happens when an asset isn’t properly titled in my trust?

It’s more common than you think. Thirty-five years as an Estate Planning Attorney and CPA in California has taught me that even the most organized people sometimes miss a step. Often, clients create a trust, fund most of their assets, and then… life happens. They acquire new property – a rental, a vacation home – and forget to formally transfer ownership to the trust. Or, like Mac, they simply delay the process intending to get to it later.

This creates a significant problem. When you die, any asset not held in trust, with a beneficiary designation (like a 401k), or held in joint tenancy must go through probate. Probate is a court-supervised process to validate your will, pay debts, and distribute assets. It’s public, time-consuming, and expensive. For many Californians, avoiding probate is a primary goal of their estate planning.

Can a Heggstad Petition ‘fix’ a forgotten asset?

Thankfully, California Probate Code Section 850 provides a solution. A Heggstad Petition, named after a landmark case, allows a court to declare that an asset should have been owned by the trust, even if the title doesn’t reflect that. Essentially, it’s a court order correcting a title defect.

The petition requires a showing that the decedent intended for the asset to be owned by the trust. This can be demonstrated through the trust document itself (Schedule A specifically lists the property), supporting documentation (purchase agreements, mortgage statements), and testimony from those familiar with the decedent’s intentions. We, as the attorney, build the case for the court.

What’s involved in filing a Section 850 Petition?

The process involves filing a petition with the probate court, providing notice to interested parties (heirs, beneficiaries, creditors), and attending a hearing. The court will review the evidence and, if satisfied that the asset rightfully belonged to the trust, issue an order directing the title company or other relevant parties to transfer the asset accordingly. It’s a relatively streamlined process compared to a full probate, but it does require court involvement and associated fees.

As a CPA as well as an attorney, I can offer a unique advantage in these situations. Proper valuation of the asset is critical, and understanding the implications for step-up in basis and potential capital gains taxes is crucial. My dual expertise ensures a holistic approach to asset correction, minimizing tax burdens and maximizing the benefit for your heirs.

What if I have multiple assets I forgot to transfer?

You can file separate Heggstad Petitions for each asset, or, in some cases, a single petition may be sufficient to cover multiple assets. The best course of action depends on the specific facts and circumstances of your situation. It’s important to address these issues proactively, before they become a larger problem. Don’t wait until a crisis forces your hand.

What are the alternatives to a Heggstad Petition?

Sometimes, a Heggstad Petition isn’t necessary. For instance, if the asset is relatively small, you may be able to use the Small Estate Affidavit (Probate Code § 13100) for deaths occurring 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 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.

• Schedule A Review: Regularly review Schedule A of your trust to ensure all assets are still accurately listed and properly titled.
• Annual Check-Up: Treat your estate plan like a vehicle – it needs periodic maintenance. Schedule an annual review with your attorney to address any changes or oversights.
• Proactive Titling: Whenever you acquire a new asset, make it a habit to immediately transfer it to your trust.

What causes California probate cases to spiral into delay, disputes, and extra cost?

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 close an estate cleanly, you must understand the requirements for closing the estate, prepare a detailed estate accounting requirements, and ensure the plan for final distribution is court-approved.

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 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.