What Can You Do If an Asset is Mistakenly Not Titled in Your Trust
Trusts govern assets held in the trust, but sometimes people fail to properly transfer or maintain title to assets in the name of the trust. For example, sometimes lenders require that real property be removed from a trust when applying for a refinance, but when the refinance process is complete, the owner forgets to re-convey the property back into the trust. In those circumstances – and many others — when the language of the trust instrument or attached schedule of trust assets which was incorporated by reference into the trust indicates that the trustor intended that the asset be part of the trust estate, the trustee can file a Heggstad petition with the court. The granting of the petition may avoid the unintended consequence of a formal probate, which is both costly and time-consuming.
The Heggstad petition basically asks the court to confirm the existence of the revocable trust, including the schedule of assets; confirm that the petitioner is the current trustee of that trust; and confirm that the particular asset is, in fact, part of the trust estate notwithstanding the absence of a formal deed.
The rulings on Heggstad petitions are not uniform because each judge has his or her own views on what amount of proof needs to be shown or if any amount of proof is adequate to change title to the asset. But the stakes are high enough that Heggstad petitions should be attempted in these types of situations.