Before we explain what a Heggstad petition is and why you may want to use one, we have to provide some background information about living trusts. This is because the petition could be useful if you use a revocable living trust as the centerpiece of your estate plan.
Living Trust Benefits
Many people think that a last will is the right choice as a sole asset transfer device based on some misconceptions. One of them is the notion that your assets would be distributed very quickly and efficiently after your passing if you use a will, and a trust is more complicated.
In a very real sense, the reverse is true in many instances. In California where we practice law, an estate that is valued at more than $166,250 would be subject to the full probate process. The executor would handle the estate administration tasks, and the court would supervise the process.
There are considerable expenses that accumulate during probate, and it will take at least nine months or so even if there are absolutely no complications. In addition to the cost and the time consumption, probate is a public proceeding, so there is a loss of privacy.
When a living trust is used as an alternative, probate drawbacks are completely avoided.
If you establish a living trust, you could act as the trustee and the beneficiary throughout your life. In the declaration, you would name an individual or entity to act as the successor trustee after you die. Your heirs would be the beneficiaries.
The trustee would be empowered to distribute assets to the beneficiaries in accordance with your wishes when the time comes, and the probate court would not be involved. In addition to the avoidance of probate and the pitfalls that go along with it, there are other advantages.
Many elders become unable to make sound decisions at some point in time due to Alzheimer’s induced dementia or for some other underlying reason. To account for this, you could name a disability trustee to administer the trust in the event of your incapacity.
A spendthrift provision could be included to protect a beneficiary that may not be good with money, and the living trust terms could be altered at any time to reflect changing circumstances.
Now that we have set the stage appropriately, we can get to the specific point that we would like to cover here. In some instances, a person with a living trust will pass away without formally conveying all of their property into the trust. The ownership documents are still in the name of the decedent rather than the trust.
Under ordinary circumstances, assets that fit this description would be subject to the probate process, because they were never conveyed into the trust. However, in the state of California, there is a legal step that can be taken to potentially facilitate probate avoidance.
A Heggstad petition could be filed with documentation that proves that the decedent intended to convey the property in question into the trust. If the petition is successful, the court would hand down a judgment stating that the property is in fact owned by the trust. This process will typically run its course in about 60 days.
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