Estate planning can be a complex and confusing process, and it’s important to ensure to distribute your assets according to your wishes after your passing. One potential tool that you may not know is the Heggstad petition.
In this article, we’ll dive into everything you need to know about Heggstad petitions. This includes how they work when appropriate and what steps you’ll need to take to file one.
Whether you’re an estate planning attorney or a regular person looking to protect your assets, this article will provide helpful insight into this powerful estate planning tool.
What is the Heggstad Petition?
A Heggstad petition is a legal process in estate planning to transfer assets into a trust after the creation of the trust. However, it is used before the assets have been formally transferred.
For context, this process is named after the Heggstad case. The Heggstad case was a California court case in which the court allowed a trustee to use a petition to transfer assets that were mistakenly not included in a trust.
Essentially, estate planning experts use the Heggstad petition to clarify the ownership of assets. They also use it to ensure that those assets are in a trust. This process can be useful when a trust is created, but certain assets are not transferred into the trust.
It can also be useful if there is uncertainty about whether there is an intention to include certain assets in the trust. Using a Heggstad petition can transfer assets into the trust without going through the formal process of retitling them, thereby saving time and money.
How Heggstad Petitions Work
The process typically involves filing a petition with the court. This petition also includes supporting documentation demonstrating the grantor’s intention to include the assets in the trust.
To use a Heggstad petition, the grantor must have created a trust and intended to include the assets in that trust. This means that the trust document should reference the assets or include language demonstrating the grantor’s intention to include the assets in the trust.
If the trust document does not include specific language about the assets in question, the court may not grant the Heggstad petition.
When filing a Heggstad petition, it’s important to provide documentation demonstrating the grantor’s intent to include the assets in the trust. This may include copies of emails, letters, or other documents that show the grantor’s intent to transfer the assets into the trust.
When to Use a Heggstad Petition
Here are some situations where a Heggstad petition may be useful:
1. Failure to transfer assets into a trust
If a grantor has created a trust but has yet to transfer all of their assets into the trust, a Heggstad petition can be useful. They can use it to transfer those assets into the trust without going through the formal process of retitling them.
2. Ambiguity in the trust document
A Heggstad petition can be useful when a trust document is ambiguous about whether certain assets should be in the trust. You can use the petition to clarify the grantor’s intent and transfer the assets into the trust.
3. Errors in transferring assets
If there was an error in transferring assets into a trust, you could use the Heggstad petition to correct them. The Heggstad petition can help correct clerical errors or a mistake in recording the transfer and ensure that the assets are properly included in the trust.
4. Change in circumstances
An Heggstad petition can be useful for updating a grantor’s circumstances if they have changed since they created their trust. It enables a grantor to change things like marital status or parental status and ensure that any newly acquired assets are included in the trust.
It’s important to note that a Heggstad petition may only be appropriate in some situations. For example, if a grantor did not intend to include certain assets in their trust, a Heggstad petition may not be appropriate.
Ultimately, it’s important to consult an experienced estate planning attorney to determine whether a Heggstad petition is appropriate for your situation.
Steps to Filing a Heggstad Petition
Here are the general steps to filing a Heggstad petition:
· Gather evidence
Before filing a Heggstad petition, you’ll need to gather evidence demonstrating the grantor’s intent to include the assets in the trust. This may include copies of emails, letters, or other documents that show the grantor’s intent to transfer the assets into the trust.
You will also need evidence of the grantor’s actions that suggest an intention to include the assets in the trust.
· Prepare the petition
Once you have gathered the necessary evidence, you’ll need to prepare the Heggstad petition. The petition should include a description of the assets in question and the evidence that demonstrates the grantor’s intent to include those assets in the trust.
You’ll also need to include a proposed order for the court to sign, which will transfer the assets into the trust.
· File the petition
After preparing the petition, you’ll need to file it with the court. Ensure to file the petition in the probate court in the county where the grantor resided at the time of their death.
· Serve notice
After filing the petition, you’ll need to serve notice on all interested parties, including the trustee and any beneficiary of the trust. You must provide this notice by the court’s rules and include a copy of the petition.
· Attend the hearing
After serving the notice, the court will consider the petition at a hearing. You’ll need to present your evidence at the hearing and argue why the court should grant the petition.
Conclusion
A Heggstad petition can be a powerful tool that allows you to transfer assets into a trust without needing formal probate proceedings. If you believe a Heggstad petition may be appropriate for your situation, you should consult an experienced estate planning attorney.
At Saanichton Law, our team of professional estate planning attorneys has the expertise to help you navigate the complex process of filing a Heggstad petition. Contact us today at 250.544.0727 to schedule a consultation and learn more about how we can help you.
