Do Trusts Have to Be Recorded in Pennsylvania?

A trust can be set up in any state, including Pennsylvania. One of the benefits of setting up a trust is the protection it provides from creditors seeking payment for outstanding debts. An individual seeking to set up a trust in Pennsylvania can be sure his children, relatives and charity organizations will benefit from the trust according to his instructions.

Trust Defined

A trust is a legally recognized entity that holds title of assets, which are items that can be converted into cash. Examples include non-401(k) retirement accounts, investment accounts, personal property, automobiles and real estate property. For a trust to hold title of an asset, the person who establishes the trust, known as the grantor, must sign over ownership of the asset to the trust. Any instrument involved in the transfer of an asset from one entity to another must be notarized.

Real Estate

A trust grantor may record a trust at any time in the county clerk's or recorder's office. To protect sensitive personal or financial information, a full trust agreement may not be needed and sensitive personal information may be redacted, according to the Legal Zoom website. Pennsylvania law requires a trust grantor or trustee to record only the transfer of real estate property. The trust grantor must record the title in the county in which the real estate is located.

Pennsylvania Trust Code

Pennsylvania trust code requires a trustee to maintain permanent records of the trust.This includes but is not limited to amendments for minor changes, restatements for major changes and supplemental instructions for how a trustee is to manage a trust going forward. All documents must be kept in a trust portfolio, including those documents that do not attach directly to an original trust document, such as a supplemental instruction form.

Benefits

The benefit of recording a trust in the county clerk's or recorder's office is that a trustee can avoid questions about a trust agreement later. For example, questions may arise if a trustee wishes to mortgage trust property and beneficiaries of the trust object. By presenting a certified copy of a recorded trust agreement, a trustee could prove the powers granted to her by the trust grantor. Recording a trust agreement also proves its existence if an original document is ever lost or misplaced.

References

• Martindale Legal Library; Pennsylvania Uniform Trust Act: New Duties and New Benefits; Edward M. Watters; August 2006
• Commonwealth of Pennsylvania: The Proposed Pennsylvania Uniform Trust Act and Amendments
• Virtu Will Solutions: Pennsylvania Consolidated Statutes: Trusts
• Legal Zoom: Where Are Last Wills & Trusts Recorded?
• Estate Planning Links: What is a Living Trust?