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Refinance Transaction with cloud on title. In order to move forward with cash out refinance transaction there is a gap where the grandparents Living Trust (now deceased) did not properly file a transfer deed into the name of the Trust. Filing a Heggstad type petition should be able to clear the gap in the chain of title to move forward with a home mortgage.
Estate of Heggstad, (1993) 16 Cal.App.4th 943
Heggstad Petition can be used to clear a cloud on title caused by failure to record a family transfer deed from whatever personal form of ownership into the name of a Revocable Living Trust.
A Revocable Living Trust is an entity that must be very specific in the description of what assets the Trust owns or holds or covers. The Trust Agreement cannot just state that the Living Trust includes all my assets, or all my property to be able to file a Heggstad Petition. The Trust Agreement must have the legal address of subject real estate property and in some cases the APN number as well (if there is some question as to address or there has been a lot split).
To prove a Heggstad Petition the original Living Trust Agreement is filed in Probate court hearing for a decision. In the Trust Agreement the settlor declared that they transferred certain property to his/her Trust with an exacting list that property in a written schedule attached to the trust instrument. The Death Certificates of those parties who were settlors of the Trust are also required with the petition.
Setting up a Living Trust is a simple affair. The problem is in following up with recording the deed to real estate and keeping up with the lives of the original settlors. Often family members don't go back to the same attorney, as time has passed, they moved away or they don't seek legal advice at all.
IF after the death of the settlor(s), record of title to subject real property that was described on the trust asset schedule remained in that decedent's name as an individual, or as Joint Tenants or whatever but not in the name of the Trust. The settlor(s) failed to pay for and record a deed formally conveying that property to the trustee of the trust.
The Heggstad court held that the settlor's written declaration that the property was held in trust was sufficient to create a trust in the subject real property, without the need of a formal conveyance of title to the settlor as trustee during the decedent's lifetime. Therefore, that property was held to be an asset of the trust and not subject to disposition through the decedent's will.
Another related recent case is Ukkestad v. RBS Asset Finance, Inc. (2015) 235 Cal.App.4th 156
Ukkestad clarifies the interpretation of a Heggstad petition to confirm a trust's holding of real property.
A recent California Court of Appeal decision Carne v. Worthington (2016) 246 Cal.App.4th 548, distinguished Heggstad referring to it numerous times. Carne points recent light on understanding the principals raised in the Heggstad and Ukkestad decisions. Liebler created a Revocable Trust of which he was sole trustee in 1985 and recorded the Revocable Inter Vivos Trust with the county recorder on title of the property. In 2009 Liebler sets up a new Trust. He transferred a list of properties into a new Revocable Living Trust, thus leaving the real property open to heirs disputing the transfer. The heirs disputed that Liebler had not changed the deed to the new Trust name. Carne case shows how disputes over trusts happen if one is not careful in executing and recording all the deeds to property that are to be part of a trust. The Carne case also shows how a relative can try to take advantage of a failure to record a deed and how trust litigation happens and can take years to resolve. When the creator of the trust becomes incapacitated or deceased, the designated Successor Trustee takes over the administration of the trust, and hence, all of the trust
Intent of Trustee should be spelled out the legal address and or APN number not just a generic - all bank accounts and all real estate.
A 2007 case, Sterling v. Taylor, which clarifies a legal principle: "That is certain which can be made certain." The court explained this with the following: "If a memorandum includes the essential terms of the parties' agreement, but the meaning of those terms is unclear, the memorandum is sufficient under [the law] if extrinsic (i.e., outside) evidence clarifies the terms with reasonable certainty and the evidence as a whole demonstrates that the parties intended to be bound."
This is NOT legal advice.
I am explaining a logical process to clear up a preliminary title report to be able to move forward with a home loan. This process would take a minimum of ninety days, as a hearing must be scheduled. I can suggest some good attorney in your area, just call me