Every few months a family calls me with the same story. Mom and Dad did everything right. They paid an attorney to set up a living trust decades ago so their kids would never deal with probate. Then, when the successor trustee pulls the deed to sell the house, it shows the parents’ names individually, not as trustees. The house was never in the trust, or it was taken out and never put back. It’s a gut punch, but in most of these cases there’s a fix that’s much faster and cheaper than full probate. This article explains it from the real estate side, and it’s part of my guide to selling a house in a trust after a death in Santa Clara County.
Key Takeaways
Summary: When a parent’s house was never put in the trust, often because it was deeded out during a refinance, a Heggstad petition can ask the court to confirm it belongs to the trust anyway. It usually takes a few months instead of the 9 to 18 months of full probate, and then the trustee sells the house normally.
A Real-World Example of a Heggstad Petition
A few years back I was working with a family that was dealing with the sale of a long-time family home after the death of the father. Years before, they had used an online “wizard” to create the trust documents, in order to save fees paying an estate planning attorney. Unfortunately, the trust was done incorrectly and the title company required that they go to court for a Heggstad Petition – and they had to pay an attorney for that, and a rush fee for the court, and it ended up costing them both weeks of time and thousands of extra dollars. They got the petition, and the sale ultimately closed just fine, but there was a lot of stress, heartache, and expense that could have been avoided.
How Houses Fall Out of Trusts
In my experience, the refinance is the culprit most of the time. For years, many lenders wouldn’t close a loan with the property held in a trust, so escrow had the owners sign a deed moving the house into their individual names, with the intention of deeding it back after closing. That second deed often never got signed. Other common causes include buying a new house after the trust was created and taking title in individual names, or a trust that was prepared but never funded because the attorney assumed the clients would record the deed.
The first thing I do when a successor trustee calls is pull the full chain of recorded deeds. Sometimes there’s a deed back into the trust that just isn’t the most recent document, and the problem is smaller than it looked.
Sell As-Is. Sell Easy. Sell Smart!
What a Heggstad Petition Is
The name comes from a 1993 California appellate case, Estate of Heggstad, which held that a written declaration by the person who created the trust, stating that they held specific property as trustee, can be enough to put that property in the trust even without a deed. Later cases have applied the idea to trusts with broader assignment language. The petition itself is filed in the probate court under Probate Code section 850, asking the judge to confirm that the house is a trust asset. Heirs and beneficiaries receive notice, and if nobody objects and the documents support it, the court signs an order that the trustee then records.
What Makes a Petition Likely to Succeed
- The house is listed by address on the trust’s schedule of assets, often called Schedule A.
- The trust or a separate general assignment says the parents transferred all their property, including real estate, to the trust.
- The house was clearly in the trust at one point, and a later refinance deed took it out temporarily.
- No heir objects, which is common when the heirs and the trust beneficiaries are the same people.
When the documents are thin, or an heir who is left out of the trust objects, the petition becomes harder and full probate may be required. That’s a question for the trust attorney.
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Heggstad Petition vs. Probate
| Heggstad petition | Full probate | |
|---|---|---|
| Typical time to a court order in Santa Clara County | About 2 to 4 months | Letters in 3 to 4 months, full estate 9 to 18 months |
| Fees | Attorney fees for one petition, usually flat or hourly | Statutory percentage fees on the gross estate |
| Value limit | None | None |
| Who sells the house | The successor trustee, with no court confirmation | The executor, with notice or court confirmation |
| Creditor claim period tied to Letters | No | Yes, four months |
On a $1,800,000 house, probate’s statutory executor and attorney fees could total $62,000. A Heggstad petition is almost always a fraction of that. My article on probate fees on a Silicon Valley home shows the math.
Other Options Worth Knowing
If the house was owned by a married couple and one spouse died, a spousal property petition under Probate Code section 13500 may transfer it to the surviving spouse without probate. If the house is a primary residence worth $750,000 or less, the petition to determine succession may work, which I explain in the $750,000 primary residence petition. Few Silicon Valley houses qualify for that one, but condos sometimes do.
Can You List the House While the Petition Is Pending?
You can prepare the house, get inspections, and even plan the marketing while the petition is pending, but the trustee shouldn’t sign a purchase contract until the court order is signed and title can insure the sale. In practice I time the preparation so the house is ready to list the week the order is recorded, which means the petition often costs the family only a month or two of real delay.
A Word to Parents
If you have a trust, take ten minutes this week and look up your current deed. If it doesn’t show you as trustee, call your estate attorney. If you refinanced in the last 20 years, check even more carefully. Fixing it now costs a recording fee and a short visit. Fixing it after you’re gone costs your children months. My estate planning primer for Bay Area homeowners covers the basics. For the full trust sale process, go back to my guide to selling a house in a trust after a death in Santa Clara County.
Timing is Everything in Life
Frequently Asked Questions
What is a Heggstad petition in California?
It’s a petition filed in probate court under Probate Code section 850 asking the court to confirm that property, such as a house, belongs to a living trust even though it was never deeded to the trust.
How long does a Heggstad petition take?
In Santa Clara County it often takes about two to four months to get a signed order, depending on the court calendar and whether anyone objects.
Why would a house not be in a trust?
The most common reason is a refinance where the lender required the owners to deed the house out of the trust and it was never deeded back. Sometimes the trust was simply never funded.
Is a Heggstad petition cheaper than probate?
Usually much cheaper. It involves one petition and hearing, with no statutory percentage fees based on the value of the estate.
Can the trustee sell the house after a Heggstad order?
Yes. Once the order is signed and recorded, the successor trustee can sell the house like any other trust property, without court confirmation.
Sources and Further Reading
- California Probate Code § 16061.7 (trustee notification)
- California Probate Code § 16061.8 (120-day contest period)
- California Probate Code § 850 (petitions involving property, including Heggstad petitions)
- IRS Publication 551, Basis of Assets
- California State Board of Equalization: Change in Ownership FAQ
Dollar limits, tax figures, and court procedures change. Everything here was current as of the review date at the top of this article. I’m a real estate broker, not an attorney or CPA, so please confirm your own situation with one before you act.
This article is educational and reflects real estate practice in Santa Clara County. It’s not legal or tax advice. Laws, dollar thresholds, and local court practices change, so confirm the specifics of your situation with a California estate attorney and a CPA before you act.
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