One of the required elements of a California revocable trust is that the trust be funded with some piece of property, whether real or personal. Prob C §15202. Often times, a person who creates a trust without the assistance of counsel will fail to formally transfer their assets into the trust because they are either unaware of the requirement or are unsure as to how to effect the transfer from themselves as an individual to themselves as trustee of their trust. A famous California probate case was the result of the failure to formally fund a trust. In Estate of Heggstad (1993) 16 CA4th 943, the trust drafter failed to formally transfer his home into his revocable trust but his revocable trust included a declaration of trust in which it listed his home as an asset of the trust. The Heggstad opinion said that this declaration of trust was sufficient to transfer his home into the trust even though he never formally transferred his home through a deed into the trust. Consequently, many California attorneys now file Heggstad petitions on behalf of their clients to formally transfer an asset, namely a house, into the decedent’s trust so as to avoid probate. Prob C §850.
Recently a California appellate court decision has expanded the reach of Heggstad petitions to include personal property, namely shares in a public held company.