What to do with those accounts that were left out of the Trust

Dear Len & Rosie,

My dad died two years ago. He has an investment account, which is still in limbo. My dad had completed all the paperwork to put the account into his trust and he submitted it, but there was a discrepancy on one of the forms. His declining health prevented him from clearing it up before he died.

According to the company, the account needs to be put into an estate account in the name of my father’s probate estate. Mom is executor and trustee, according to dad’s will and trust. We need to get a letter from the court stating my mom is the executor. I’ve asked my mom’s lawyer about this several times. He says he’ll take care of it, but every month we check the statements and the change has not been made. How to I get the letters I need from the court for my mother?

Judy

Dear Judy,

What your mother needs to do depends on how much the account is worth. If the total value of this account and any other accounts in your father’s estate is less than $162,250 (up from $150,000 last year), then she can transfer the account via a small estate declaration under California Probate Code section 13101. Your mother’s lawyer can include a cover letter to the financial institution explaining why there won’t be an estate account.

If the account is worth more than $150,000, then there are two options left. One is to file for probate, which isn’t the best idea, because probate will take at least nine months to complete. It would also be relatively expensive because probate isn’t cheap in California.

Alternatively, she can petition the court asking for a court order declaring that the investment account belongs to her as the successor trustee of the trust, because your father meant to put it into the trust and tried to do so, even though he failed.

Under a California appellate court decision in a case called Estate of Heggstad, more or less anything that your father listed on the schedule of trust assets attached to the back of the trust can be transferred to the trust by court order without having to go through probate. Since your fathers will probably leave his estate to the trust anyway, it’s hardly likely anyone will object. The court would probably approve your mother’s petition.

Check with your mother’s attorney one last time to see if he or she is actually working on your father’s estate. If nothing is happening now, your mother should probably see another lawyer. It’s been two years since your father’s death, so unless there are other complications we are not aware of, your father’s account should have been transferred long ago.

Len & Rosie