A Heggstad petition can be a very helpful tool for a trustee or beneficiary. When used in conjunction with a General Transfer Document and Pour-Over Will, these documents can provide a safe method to prevent a loved one’s estate from entering probate due to assets that are not funded (transferred to) their trust upon death.
The Heggstad petition allows a trustee to transfer assets that are not in a trust upon death to the trust through a court proceeding (but note, this court proceeding is not probate). Before the trustee can get these assets formally transferred into the trust, they will need to file the petition with the court. The court will then set a hearing date, and before the hearing the trustee needs to provide a copy of the petition and any other relevant documents to every beneficiary of the trust, as well as any lienholder of real estate. If the beneficiaries or any third parties do not object, then (typically) the judge will approve the asset as a trust asset so that the trustee can continue with the administration of the trust. The judge will then sign the order the trustee provides to the court, and then the trustee has to record the certified order with the County Recorder, and often present it to financial institutions in the case of bank accounts. At this point, the trustee will have control over the assets.
There are a few risks that occur when using a Heggstad petition. The biggest risk is that the judge can deny the request to approve the asset as a trust asset. If this happens, the assets must go through probate and all costs and expenses paid for the petition will be for nothing.Generally, the petition is used for cases where the settlor had intended to transfer the property into a trust but failed to do so. If filing a Heggstad petition, you will need evidence that the settlor intended to transfer the property but couldn’t for some reason. This could be because they were unable to do so, unaware that the property should be transferred to the trust, or that it was listed on the schedule of properties but not actually transferred yet. The key evidence that you would use to get your Heggstad petition approved would be the General Transfer Document and a Pour-Over Will – without these documents, the judge will deny your petition.
If a loved one’s assets are at risk of going through probate even if they have a trust, using a Heggstad petition is usually an effective answer. An experienced estate planning attorney will be able to evaluate the situation and give you a better picture of whether or not a Heggstad petition will be effective in your case. For further assistance in your estate planning needs, contact us via our website to schedule your consultation today.
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