During the estate planning process, an individual known as the settlor may choose to establish and place select assets in an irrevocable trust. Upon the death of the settlor, an irrevocable trust generally conveys a portion of trust assets to beneficiaries named in the trust agreement with the remainder passing to future generations depending on the terms of the agreement. In Pennsylvania, as in other states, the intent is often to bypass the probate process and avoid any estate taxes that would be due if all assets went directly to devisees or beneficiaries under a last will and testament.
Locate all existing deeds to determine property descriptions and how title was taken under those deeds. If necessary, have a title company or real estate attorney perform a title search to obtain recorded copies, certify ownership and list any liens or encumbrances that may exist against the property. Have a copy of your trust agreement, which is the document creating the trust, available with the names of the trustees and legal name of the trust. Gather any titles and other documents or ownership agreements relating to additional property to be transferred. If liens or encumbrances exist, they may need to be released or assumed by the trust prior to transfer of the property. If a mortgage exists that is not to be paid in full before the transfer, seek advice from your attorney or contact your lender to make sure the transfer will not activate the due-on-sale clause in the mortgage.
Prepare deeds from the grantors or current property owners to the named trustee or trustees of the trust, i.e. “John Doe and Jane Doe, as co-Trustees of the John and Jane Doe Trust dated September 7, 2012.” Make sure the legal descriptions are accurately carried through from the prior deeds to the trust deed to avoid future corrective work that may create problems for the trust and its beneficiaries. Visit an online legal document service to review and use forms that assist with deed preparation. If you have specific legal concerns that are not addressed, however, contact your Pennsylvania attorney for advice prior to the transfer.
Sign prepared deeds in the presence of a notary public who must notarize or acknowledge your signature. Transfer other intended assets by notarized assignment agreements to the trustees or, in the case of titled property, sign over the original titles to the trustees in their capacity for the trust. Record the executed deeds as well as any assignments of mortgages or assumption agreements in the office of the recorder of deeds for the county where the property is located. If titled vehicles are transferred, present the title to the Pennsylvania DMV for transfer.