Carne v. Worthington (2016) 246 Cal.App.4th 548 – Heggstad petitions with trusts

You likely know that tries to stay up on all “Heggstad” related news. As the owner of it is imperative that I keep up-to-date on these cases. We advise clients, and potential clients, almost daily about the nuances of a Heggstad petition.

As you likely know a “Heggstad” petition is a probate court petition brought pursuant to California Probate Code 850. The primary goal of a Heggstad petition is to get an asset into a trust that was not properly titled as such. The common scenarios we see are:

1) the person set up the trust themselves, without the aid of an attorney, and failed to properly “fund” the trust;

2) the person set up the trust with an inexperienced or sloppy attorney who did not help the client properly fund the trust;

3) the asset was acquired after the trust establishment and the trust was not properly funded;

4) the person did a re-finance on their house, the title company moved the property out of the trust, and failed to put the property back into the trust.

The seminal case was the Estate of Heggstad in 1993. That case looked about like this:

Estate of HALVARD L. HEGGSTAD, Deceased.

GLEN P. HEGGSTAD, as Trustee, etc., Petitioner and Respondent, v. NANCY RHODES HEGGSTAD, Objector and Appellant.

This case was groundbreaking and has been used countless times to successfully fund trusts after death. Estate of Heggstad, (1993) 16 Cal.App.4th 943).

In 2015, as you have read on my blog before, the courts went further than Heggstad with the case: Ukkestad v. RBS Asset Finance, Inc. (2015) 235 Cal.App.4th 156. This case was essentially Heggstad on steroids and made it even easier to get assets into a trust after death.

Now it’s time to go further! The latest case in the Heggstad family is Carne v. Worthington (2016) 246 Cal.App.4th 548. Mentioning Heggstad, by name, over 20 times the court took Heggstad further.

As you know intent is still the key with “Heggstad” petitions. The required showing of intent is just less than it used to be. In most California courts this has been a problem for real estate. That is, most courts have been comfortable getting personal property (such as bank accounts) into a trust without much specific showing of intent. Something along the lines of “I intend for all my assets to be in this trust” has been enough in many cases. However, getting real estate transferred after death took more than that.

With Ukkestad and now Carne I believe with either personal property or real estate you should have a very good chance of getting assets put into a trust. Intent is still needed but that showing of intent probably does not have to be as specific as it used to.

Of course I am just providing GENERAL information here. Each case is unique and you should review your facts with an experienced Heggstad lawyer. As an attorney that has successfully performed dozens and dozens, if not over 100, Heggstad petitions I can very quickly give you my professional opinion. That is not an opinion based on reading law books and theory but actually DOING these cases. I believe I have an extremely good sense of what will work in most courts.

Also, it’s important to keep in mind that sometimes a Heggstad is not the right approach. For example, if the asset in question is worth less than $150,000 there is likely a better way to get the asset into the trust; a more sure way that does not cost more. So, again, evaluate your options with an experienced estate attorney.

The attorney you talk to should know about Heggstad, Ukkestad, and Carne!

Best of luck to you. -John

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