The common reason to file a Heggstad petition is because the settlor failed to formally transfer the property into the trust. For example, in the case of real estate, the settlor failed to execute a deed which transferred their interest in the property to their trust. Recently, a California Court of Appeal decision clarified the specificity needed in terms of real estate when filing a Heggstad petition.
Ukkestad v. RBS Asset Finance, Inc., __ Cal.App.4th __ (2015)
Just prior to his death in 2012, Larry Gene Mabee executed a restatement of his trust. However, Mr. Mabee unfortunately did not execute trust transfer deeds for two parcels of real estate which he owned in his individual name. Thus when Mr. Mabee passed away, title to the two parcels was not in the trust's name. One of the successor co-trustees, Daniel Ukkestad, petitioned the probate court in San Diego County to have the two parcels be confirmed as trust assets. The trial court denied the petition and Mr. Ukkestad appealed.
According to the opinion, a key fact in the case was that "the Trust Instrument does not describe the Two Parcels by reference to any specific identifying information unique to those properties, such as the address or legal description of the Two Parcels." Conversely in the Estate of Heggstad (1993) 16 Cal.App.4th, the trust there did describe the property with some particularity. The trust's schedule of assets referred to the property in question as “Partnership interest in 100 Independence Drive, Menlo Park, California.” Id. at 946. Still, the Court of Appeal opined that a sufficient description had been made by Mr. Mabee given that the trust stated:
"The Grantor [i.e., Mabee], by the execution of this instrument, hereby assigns, grants and conveys to the Trustees of this instrument all of the Grantor's right, title and interest in and to all of his real and personal property, including all Tangible Personal Property, stocks, bonds, cash, mutual funds and promissory notes, all amounts on deposit from time to time at any bank, savings and loan association or investment institution, real property, leases on real property, interests in business entities and all other property owned by the Grantor, wherever situated. . . . The Grantor intends this assignment to be effective as of the date of this instrument even though other documents may be necessary to perfect title to such property in the name of the Trustees."
Therefore, the Court of Appeal reversed the trial court's ruling as it stated "that because the Trust Instrument states that all of Mabee's "right, title and interest" to "all of his real . . . property" is included in the Trust's assets, and it is possible by resorting to extrinsic evidence to determine that Mabee held title to the Two Parcels, the statute of frauds creates no bar to Ukkestad's petition for an order confirming that the Two Parcels are part of the Trust's assets."
