Fixing Incomplete Trust Funding with a Heggstad Petition

Creating a revocable living trust is a smart step toward avoiding probate, but the plan only works if the trust is properly funded — meaning assets are retitled in the trust's name during the creator's lifetime. When funding is incomplete (a surprisingly common oversight), those "left-out" assets can force families into probate court, even with a well-drafted trust.

Key Takeaways

Improperly funded trusts are common, and their consequences can be expensive
Navigating a course to correct these mistake can be complex, and it's important to have an experienced Heggstad attorney

COMMON TRUST MISTAKES AND THEIR CONSEQUENCES

Common funding mistakes include:

Real estate deeds never recorded in the trust's name (often due to forgotten refinances, life changes, or simple oversight).
Bank/investment accounts not retitled after opening new ones.
Newly acquired assets (e.g., a home bought after trust creation) never transferred.
Business interests or personal property overlooked.

Consequences are significant:

Probate required for assets over California's current thresholds (e.g., $208,850+ for personal property as of recent updates).
Delays of 8–18+ months, public court records exposing family finances, and fees that can eat 4–7% of the estate's value.
Potential family disputes or creditor claims complicating distribution.
Undermining the trust's privacy and efficiency benefits.

EXPERIENCED HEGGSTAD PLANNING ATTORNEY

The good news? Remedies like Heggstad petitions under California Probate Code §§ 850 and 17200 can often pull assets back into the trust without full probate, provided the decedent's intent is clearly proven through strong written evidence.

Named after the landmark 1993 California Court of Appeal case Estate of Heggstad (16 Cal. App. 4th 943), this petition allows a trustee, beneficiary, or other interested party to petition the probate court to confirm that an asset — such as real estate, bank accounts, or investment portfolios — belongs to the trust. In the original Heggstad case, the court ruled that a written declaration of intent (specifically, a schedule of assets attached to the trust document listing the property) was sufficient to establish the transfer, even though no formal deed had been recorded during the decedent's lifetime. This created a powerful precedent: courts can honor the settlor's (trust creator's) clear intent without requiring perfect title transfers.

Under Probate Code § 850(a)(3), the petition applies when the decedent died holding title to real or personal property claimed to belong to the trust (or another party). If successful, the court issues an order directing the asset to be transferred directly to the trust, bypassing the full probate process entirely. This saves significant time (probate often takes 8–18+ months), reduces costs (avoiding statutory probate fees that can reach 4–7% of estate value), and maintains privacy since the matter stays out of the public probate record.

In practice, Heggstad petitions succeed most often when:

A Schedule A (or similar attachment) to the trust explicitly lists the asset (e.g., the family home's address or account details).
The trust includes a general assignment clause declaring all property transferred to the trust.
Other supporting written evidence shows intent, such as trust amendments, contemporaneous notes, or declarations.

Many California families have used this tool successfully for common oversights — like forgetting to re-deed real estate after a refinance or not retitling newly acquired accounts. Courts prioritize honoring the decedent's wishes when evidence is clear and convincing, and unopposed petitions can resolve in weeks to months.

Of course, not every case qualifies: petitions may be denied if evidence of intent is insufficient (e.g., no specific description of the property), procedural errors occur, or beneficiaries object. In those situations, full probate may become necessary — but starting with a thorough review often reveals a viable Heggstad path.

CONCLUSION

If your loved one's trust wasn't fully funded, or you're planning ahead to prevent this, contact us for a free consultation. We'll guide you efficiently to protect what matters most. For more information on trusts, you can explore our estate planning practice and Resources for further discussion in this regard or schedule a strategy session today. Keep planning smarter.

Matthew Schlau is a co-founding principal of Schlau|Rogers and an estate and business planning lawyer practicing in Orange, San Diego, Los Angeles and Riverside counties. He is a husband, father, blogger, crossfitter, and really good at helping people achieve their goals.

At Schlau|Rogers, we do more than just estate and business planning, probate and trust administration. Our objective is to provide individually-tailored plans that allow you the opportunity to reach your goals, all while minimizing headaches and risk, and maximizing peace of mind.

On our blog, you'll find useful information about estate and business planning, probate and trust administration, as well as some tidbits on personal finance, taxes, and anything else we think will help minimize headaches, worry and risk, all while maximizing peace of mind.

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