October 14th, 2013 – Newsletter

Posted by on October 14, 2013

BATI Quotes

Never doubt that a small group of thoughtful, committed people can change the world.  Indeed, it is the only thing that ever has.
Margaret Meade

BATI Knowledge

TYPES OF TRUSTS
A great deal of attention has been spent on non-citizen trusts the past year or so, culminating on September 16, 2013 when the FAA’s policy “clarification” took effect, with several layers of new information being provided to the FAA by the owner trustee.
Here are the types of trusts we deal with most commonly:
Non-citizen Owner Trust (“NCT”)
In these trusts, the aircraft is owned by a non-citizen and placed in the name of a U.S. citizen owner trustee and the aircraft is registered to the owner trustee under the terms of the executed trust agreement which is filed in its entirety with the FAA; also as of September 16, 2013, an operating agreement is submitted to show who is operating the aircraft (usually it is NOT the owner trustee).  An Affidavit must also be filed with the FAA in which the owner trustee states there are no other documents affecting the trust relationship to file (other than the trust agreement and operating agreement) as well as other declarations regarding citizenship, security interests and level of influence the trustor has on the trustee, etc.  There are a number of checkpoints when documenting an NCT – see attorney Jason Hartwig’s article (DeBee Gilchrist, PC) in the Articles section of our website, www.BATI.aero.
Voting Trust
When using a voting trust, the aircraft is registered to the actual corporate owner (which otherwise qualifies as a U.S. citizen, except that the stock is not owned by U.S. citizens.)  The voting trust vehicle places at least 75% of the stock in the corporation into the hands of a U.S. citizen.  The fully executed trust agreement and affidavit are also filed with this type of registration.
Family Trusts
The complete trust agreement and the trustee’s affidavit are required for this type of trust, and the aircraft isregistered to the trustee (or many times, co-trustees).   Being aware of the sensitivity of information which may be included in the family trust documents (basically an estate planning tool with private distribution and succession terms) the FAA will allow the trustee to submit a fully executed trust document to the Aeronautical Center Counsel’s office, who will review the trust, approve or reject it, and if approved, will send a memorandum to the Civil Aircraft Registry advising the trust has been reviewed and deemed acceptable to support registration to the trustee(s).  The trustee(s) will still submit the Affidavit to the Registry.
Statutory Trusts
A statutory trust has a separate legal existence and can conduct business in its own name.  More often than not, the aircraft is actually registered in the name of the trust; however, some trust agreements call for registration in the name of the trustee(s).  If the trustee applies for registration, then the trust agreement and supporting affidavit are also filed; if the trust applies for registration, then the trust document and affidavit are not filed inasmuch as the trust would be applying as an association (a legal, existing entity) and not as trustee.

BATI – FAA and IR UPDATES

Declaration of International Operations
                    As you know, the pink copy of the Aircraft Registration Application allows the applicant to operate the aircraft without registration, domestically, while awaiting the Registry’s processing of the evidence of ownership and registration application.  If one needs to operate in international airspace, then the Registry has agreed to expedite registration for that purpose, as only registered aircraft may operate internationally by treaty.

The FAA requires the owner to submit the following information:

(a) description of the aircraft: N-Number, Mfr’s Serial No. and Mfr. And Model No.;

(b) the date of the planned international flight;

(c) the departure city and state and the destination country;

Also, the applicant must confirm that:

“Whoever, in any matter within the jurisdiction of the executive branch of the Government of the United States, knowingly and willfully makes or uses any falso writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or representation shall be filed under Title 18 United States Code or imprisoned not more than 5 years, or both”.  18 US.C. §1001(a)

The FAA will issue a temporary certificate of registration via telegraphic message and will fax it to the owner!  You may access a Declaration of International Operations form on our website, www.BATI.aero (under Forms).

BATI Pot Pourri

image003

The Cessna Citation 510 Mustang first flew on
April 18, 2005. The airplane received full type
certification from the FAA on September 8, 2006. image001The Mustang is a low-wing, T-tail and tricycle retractable
landing gear. Power is provided by two Pratt &
Whitney Canada PW615F turbofan engines.
Crew:  one or two pilots
Capacity:    4 to 5 passengers
Length:     40 feet 7 inches
Height:     13 feet 5 inches
Maximum speed:  Mach 0.63
Range:      1167 NMI