Fourth Circuit Ruling Heggstad style 850 Petition

living_trustWhat happens when someone creates a revocable living trust that does not specifically list each piece of property owned by the grantor? That seems to depend on the county in which the question is presented. Typically, a Heggstad petition is submitted in order to bring the property in question under the authority of the trust. However, there are definitely counties in which these petitions are not as readily accepted. There has recently been a ruling issued by the 4th Circuit Court of Appeals that may make these petitions more uniformly and consistently welcome.

In San Diego County, the local probate court refused a Heggstad petition brought by trustee Daniel Ukkestad on the behalf of the estate. The petition requested that two specific parcels of land owned by Mabee be included in the assets of the trust. The probate court denied the petition on the ground that the “statute of frauds” was not satisfied.

The 4th Circuit Court of Appeals ruled that the probate court had erred in this ruling and recognized the right of the Mabee estate to bring these two parcels into the decedent’s revocable living trust based on the “broad assignment language” in the RLT. The ruling was based on two major components. First, the court concluded that the Trust Instrument clearly identified all of Mabee’s “right, title and interest” to “all of his real . . . property” were to be included in the assets of the trust. Secondly, the court determined that by “resorting to extrinsic evidence” it could be concluded that Mabee clearly held title to the parcels in question. In the courts ruling, there was no reason under the “statute of frauds” to reject trustee Ukkestad’s petition to include the two parcels in the trust’s assets.

Hopefully, this ruling by the 4th Circuit Court of Appeals will encourage probate courts to more liberally interpret and recognize Heggstad-style 850 petitions in order to bring unassigned property into the appropriate trusts.


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