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California Probate Code 850 (commonly referred to as a Heggstad petition) guides the legal process of avoiding lengthy court probate administration procedures by asking a court to order properties that should have been but were not titled in the name of a trust. A powerful, cost-effective tool, Heggstad petitions can save you time and money. They can also help smoke out any potential trust contests, trust challenges, trustee suspension, trustee removal, or breach of fiduciary duty that may be lurking in the wings.
A California Probate Code 850 Petition, or Heggstad petition, governs the “conveyance of transfer of property claimed to belong to decedent or other person.” Generally, an 850 Petition is used where a decedent created a trust but failed to title one or more property in the name of the trust, the most common properties being real property and bank or investment accounts.
vThe most common scenario, and that which occurred in the Heggstad case, arises where the decedent owned a property, title the property to the trust, but then removed the property from the trust to refinance the property but then never retitled the property in the name of the trust before passing. Although clearly intended to be a trust asset, prior to Heggstad the executor of the decedent’s estate would have to go through the lengthy, court-supervised probate proceeding just to have the asset distributed to the trust, from where it would then be administered by the trustee and ultimately distributed to the beneficiaries, a cumbersome, duplicative, time consuming and expensive process. Now, the trustee of the trust can short-circuit those processes, saving the estate significant time and money.
While cursory, an 850 petition is a judicial proceeding that should be undertaken with the assistance of an experienced trust attorney. Why? Well, first, not every situation works. There are specific factual scenarios under which a court will grant an 850 Petition. Counsel can examine your facts and tell you whether you are likely to succeed, or just wasting time and money. Second, because an 850 Petition is processed through the probate courts, it is likely that your 850 Petition will produce probate notes, which will require you to supplement your petition before the court will grant it.
Experienced probate counsel can respond to, if not avoid, probate notes altogether. Third, although seemingly administrative in nature, 850 Petitions tend to smoke out unhappy heirs and beneficiaries who may be contemplating challenging the trust, seeking suspension or removal of a trustee, or pursuing breach of fiduciary duty claims. A trustee interested in pursuing an 850 Petition would be well-advised to understand and take into account these considerations when deciding to pursue an 850 Petition and in drafting the 850 Petition to avoid potential future pitfalls. Fourth, some jurisdictions favor Heggstad petitions, where other jurisdictions do not. An experienced trust lawyer can help you analyze whether your local court is likely to grant your Heggstad Petition.
In recent years, litigation involving beneficiaries and heirs claiming that there was a lack of clear intent to add at-issue properties to the trust has become more popular. These contestants see the ability to object to a Heggstad as a possible opportunity to avoid the asset going to the trust and instead pass via intestacy or a will (although normally the will just distributes the asset to the trust anyway). In these situations, a trust litigation attorney will be needed to protect the trustee and trustee, as well as the rights of trust beneficiaries.
Not directly. Probate Code 850 provides guidance that can be used to request that the court return property or assets illegally taken from a trust. To discourage stealing from the trust, a California probate code provision (Probate Code 859) asks the person proven to be stealing from the trust to return the stolen assets and up to “twice the value of the property recovered.”
Contact a trust litigation attorney when you’ve lost a loved one and don’t know what the next steps are. An early call to a trust litigation attorney experienced with the local probate courts can go a long way to ensure a smooth and cost-effective administration. At RMO Lawyers, the consultation is always free, so email [email protected] or call: (424) 320-9444
We recommend finding an experienced trust litigation attorney familiar with the county probate court in the county where the decedent lived. For example, if the decedent lived in Los Angeles, we recommend working with a trust litigation attorney in Los Angeles. A Los Angeles probate lawyer will generally be more familiar with the Los Angeles Superior Court Probate Division, versus an out of state attorney.
RMO LLP provides personal and efficient inheritance dispute services to individual and institutional clients. The firm’s attorneys focus on probate litigation involving contested trust, estate, probate, and conservatorship matters. Serving California and Texas, with offices in Los Angeles, Pasadena, Orange County, San Diego, Fresno, the Bay Area, Dallas, and Houston. For more information, please visit RMO Lawyers.