Many homeowners make changes over time in the title to their property by deeding to children or other family members without seeking tax or legal counsel. Don’t let misguided or innocent missteps in the transfer of title catch up to you or your heirs after it is too late to correct the records.

Acommon mistake is to transfer property out of a living trust to obtain financing, and forget once the loan is in place to transfer the property back into the trust.

Sometimes real property is not properly transferred into a trust when the trust is created. Consequences can be significant upon death, as the property must now go through the time and expense of probate court before transferring to heirs.

Acourt case in 1993 established that it was sufficient to have property listed in the trust documents to show intent to transfer, even if the property was not transferred into the trust before death. This case created a shortened process using a Heggstad Petition to allow a post-mortem transfer of real estate into a trust.

The petition to the court filed by an attorney under Probate code 850 verifies that a trust was created and that the creator of the trust intended to transfer title to property into the trust before death.

AHeggstad petition once granted by the court allows the family to avoid the time and expense of the probate process. Save your heirs this extra work by checking your trust documents to see if the trust has only general declarations outlining the intent to transfer “all property both real and personal” without defining specific parcels of real property.

Any property to be included in the trust should be listed in the trust document as a trust asset and properly identified by legal description and assessor’s parcel number.

Before transferring title from an individual to a trust or other entity, review your Title Insurance Policy to make sure that the title insurance coverage will extend to the trust. Certain title policies issued before 2000 may need an additional coverage endorsement for trust transfers. If you can’t locate your title insurance policy, check the original grant deed for the name of the title company.

Aconsultation with a qualified California trust or real estate attorney will ensure your title and trust are watertight.

Adriana Donofrio • deasypennerpodley Glendora (626) 926-9700 • adonofrio@dppre.com