Monthly Archives: January 2014

Heggstad Petitions in Nevada: Or, How to Bypass Probate and Get an Asset into a Trust after Death

Washoe Co. Court House           It is unfortunately all too common that clients who set up a trust forget to transfer one or more assets into the trust; or they purchase a new home or other asset, and do not title it in the trust. In some cases, it is possible to avoid having to probate assets omitted from the trust if you can prove that the deceased intended to include that asset in his trust. In Nevada, this can be accomplished by way of filing a Heggstad petition with the probate court.

The name of the petition comes from a 1993 California case, In Re Estate of Heggstad, in which Mr. Heggstad created a trust but failed to execute the necessary paperwork to transfer his interest in certain real property into his trust. The successor trustee argued that Mr. Heggstad had intended that the asset be transferred to the trust by the fact that it was included in the schedule of assets attached to the trust. The court agreed, finding that that a written declaration of trust by the owner of real property, in which he names himself trustee, is sufficient to create a trust in that property; the law does not require a separate deed transferring the property to the trust.

In Nevada, the Heggstad case is not binding law, but a Heggstad type petition is provided for in the probate code, which allows a trustee or other interested person to petition the court to enter an order if the trustee has a claim to property and another holds title to or is in possession of the property. Pursuant to Nevada law, an omitted asset can be placed into the trust without a probate proceeding.

Under what circumstances will this be successful? You have to prove that the asset was intended to be in the trust. Inclusion of the asset on the schedule of assets was deemed sufficient in the Heggstad case. Another possibility is to show that the asset was in the trust but was inadvertently removed for some reason; for example, you had a bank account at First Bank titled in your trust and closed it and opened a new account with the money at Second Bank, but forgot to open the new account in the name of the trust. Each situation is different, but a knowledgeable probate attorney can help you evaluate your case.

In order to put the asset back in the trust, it is necessary to prepare and file a petition in the appropriate district court. The petition is set for a hearing and if approved, the court will issue an order transferring the assets into the trust without any further proceedings. This is a huge advantage over opening a probate estate as it cuts down significantly on the time required and on fees and costs.

Contact Woodburn and Wedge with your trust and estate issues. We can help you evaluate whether a Heggstad petition would work for your situation or whether another procedure is appropriate.

Why All Your Assets Should Be in Your Trust

Trust Jan. 2014           It happens all the time: People go to the trouble of setting up a trust, hoping to avoid the time and expense of a probate—but they either neglect to move all their assets into the trust, or they buy new assets and forget to take title in the name of the trust. Why is this a problem? If your assets are not in the trust, then the trust does not govern what happens to them at your death. Instead, they will be governed by your last will and testament, or by intestate succession if you don’t have a will, or your will cannot be located.

Depending on the value of the assets omitted from the trust, it may be necessary to open a probate proceeding with the court in order to get the assets to the intended beneficiaries. This involves spending time and money that could have been avoided if all assets had been titled in the trust.

Most estate planning attorneys have their clients execute a will “pouring over” any such assets into the trust—in other words, the trust is made the beneficiary of the will. In this case, the assets you left out of the trust will eventually get back into the trust, but only after an appropriate court proceeding. However, if your will cannot be found, or is invalid for some reason, the assets will go to your heirs according to the law, who may or may not be the beneficiaries of your trust.

What’s the best way to ensure your assets are properly titled in your trust? When you first set up a trust, make sure that the trust includes a schedule of assets intended to be transferred into the trust, and make sure that all of your assets are on that schedule. Next, you need to do some legwork: all real property should be transferred into the trust by means of a signed and recorded deed; and all titled personal property (cars, bank and brokerage accounts, etc.) should be transferred as well. Any time you purchase a new asset, make sure you take title in the name of the trust. If you refinance an asset, make sure the asset does not get bumped out of the trust in the process, and take steps to transfer it back in if this occurs. Finally, periodically review your assets to make sure they are titled in the name of the trust.

If you need assistance with this issue, you should contact a qualified Nevada estate planning and probate attorney.