The Heggstad Petition. Otherwise know as the “I forgot to fund my Trust Petition.” If you have an estate plan that includes a Trust, hopefully you know what I am talking about. If not. This article is for you. If you don’t yet have an estate plan, this might be a good primer of an often-overlooked task that can throw a real wrench in your estate planning.
What is It?
While this may sound like something you want to avoid ordering at a Scottish restaurant, the petition draws its name from a 1993 California court case: Estate of Heggstad. Mr. Halvard L. Heggstad passed, having the good sense to put an estate plan in place before he departed. That estate plan included a Living Trust. But he neglected to fund his Trust with a 34.78% property interest in 100 Independence Drive, Menlo Park. That’s right, property located less than a mile’s drive from this Firm’s San Mateo office and right next door to Facebook’s Building 60. So, what now?
One of the significant benefits of having a Trust is the ability to avoid the costly and time-consuming Probate procedures. However, as any good Trustee will tell you, the Trust only includes the property that is titled in the name of the Trust. You have to build the Trust, and then you have to fund the Trust. Merely listing your intent to put titled property in the Trust is not enough.
The Heggstad decision affirmed a procedure whereby, if you forgot to change title, but it was sufficiently clear that you had intended for property to be included in the Trust, you could follow simplified Probate Court procedures to have that oversight corrected.
The first takeaway from the Heggstad case is obvious: fund your Trust. The second is more nuanced. If you have an estate plan, or are having one created, make sure your estate planning attorney understands your assets and lists them with sufficient particularity in your estate plan that if a Heggstad Petition becomes necessary, it will also be successful.
Don’t settle for generic estate planning. Whether Legacy or Business Planning, Contact CASHMAN LAW today for a free consultation to get the Plan You Deserve.™
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