The Heggstad Solution

The Estate of Heggstad decision in 1993 changed the mandatory requirement that a full Probate proceeding is necessary to get the decedent’s assets into the decedent’s trust after death.  This Court decision held that “the settlor’s written declaration stating that he holds this property as trustee was sufficient to create a revocable living trust,” thus affirming the Probate Courts previous order declaring that decedent’s interest in real property was, in fact, an asset of decedent’s living trust.   Subsequent court cases have expanded that holding to include all types of property owned by a decedent.

The Heggstad decision was codified by the Legislature in Probate Code Section 850(a)(3)(B), which provided that the trustee of the trust or “any interested party” may file a petition with the Probate Court “where the trustee has a claim to real or personal property, title to or possession of which is held by another.”

Using this approach, it is possible to avoid the Probate process and more quickly gather loose property of the “settlor” or “trustor” into the trust.