Keeping it Simple Series: They Forgot to Transfer the House
Imagine for a moment you are a trust beneficiary. In the trust it says you are entitled to receive a house worth $1 million. That’s great! Imagine now you discover from the County Recorder records that the house was never transferred (re-titled) into the trust. Essentially this means the hosue not a trust asset and cannot be distributed through the trust. Now what? If you open a probate (the court supervised proceeding to transfer assets of a deceased person), it could cost $46,000 in fees ($23,000 to the attorney and $23,000 to the appointed administrator) and a few thousand more in costs.
There may be another way. Did the trust make clear reference that the house was part of the trust? If so, a Heggstad petition under Probate Code 850 may fix this problem. A Heggstad petition (named after the Heggstad case) would allow retroactive transfer of the house into the trust as long as the trust complied with the Statute of Frauds. In simple terms, the Statute of Frauds states a transfer of real property must be evidenced by a written document showing the intent to transfer the particular property. So, if the trust clearly stated 1235 Cedar Street, San Diego, CA was in the trust, the Heggstad petition could work.
Where would you find clear evidence the trust referenced the property? The first place to look would be “Exhibit A” to the trust, which lists all the assets that were supposed to be transferred. The second place to look is on a “general assignment.” If the Exhibit A or the Assignment lists the property with it’s address or legal description, the statute of frauds is not violated and a Heggstad could be granted.
This option would cost much less money and take much less time than opening a probate.