Including real estate left out of a deceased’s estate or trust. – Lake County Record-Bee

Administering a deceased person’s probate or estate can involve unforeseen challenges. Consider two probate scenarios where title to real estate that belonged to the deceased was nonetheless titled outside of the deceased’s name and presented a challenge as to how to title the real estate in the estate. Consider also a trust administration scenario where the security has been excluded from the trust.

Consider a probate where the deceased, years before his death, was supposed to receive his then-wife’s title to all real estate owned by them as joint tenants as part of their divorce settlement. The wife signed a spousal deed to real estate in Lake County which she says transferred all property to her husband. Years later, at probate, she learned that the mobile home on the property and the adjoining 5-acre parcel were not included in the spousal deed.

Here, a possible solution is to ask the court, under section 850 of the Probate Code, for an order to reform the deed to include the adjoining 5 acres. Reform is an authorized equitable (equity) approach to the problem that applies when there is a written agreement that does not properly express the prior mutual agreement between the parties. In this case, both spouses agreed that all real estate would go to the husband, but the spousal deed itself excluded the adjoining five acres and the mobile home. With the written statement from the surviving ex-spouse, it made sense to file an 850 petition to reform the old spousal deed to include the missing assets.

Next, consider a probate where the deceased co-owned a lot with two other registered deceased owners. The Estate Estate could not sell the property without unifying all of the property into the Estate Estate itself or without the heirs of the other deceased co-owner obtaining title to the real estate and participating in the sale as co-owners. Fortunately, the heirs of the other deceased owners were willing to cede their inheritance rights to the personal representative of the estate. With the deeds and statement of surviving heirs confirming that no estate of the deceased co-owner has been probated, it becomes possible to use an 850 petition by the personal representative for an order that the property belongs to the probate estate depending on assignments and circumstances.

As illustrated, Section 850 of the Probate Code provides a useful procedural remedy for a personal representative of a deceased’s estate to pursue claims to property that is owned or titled in someone else’s name. Without the cooperation of this “person else” or interested successors, the Section 850 petition will likely result in controversy and possibly litigation. With cooperation, however, a Section 850 petition can provide a useful remedy for solving thorny issues.

Finally, consider a deceased person who died with a trust while owning real estate outside of the trust. If there is a good argument that the deceased wanted the property transferred to the trust but did not, then an 850 petition pursuant to Estate of Heggstad, 16 Cal. App. 4th, 943 (1993) may be the solution. For example, if the deceased withdrew title from the trust as part of a refinance, then there would be a clear argument that the failure to retitle the house into the trust was unintentional.

The above is a brief discussion of a much larger and more complex subject. It is not legal advice and is not a substitute for consulting an attorney before proceeding.

Dennis A. Fordham, attorney, is a state bar certified specialist in estate planning, probate and trust law. His office is at 870 S. Main St., Lakeport, California. He can be reached at [email protected] and 707-263-3235.