United States law requires that all aircraft must be registered under the name of a U.S. entity or individual citizen. The Federal Aviation Administration (FAA) has recognized the use of Owner Trusts to facilitate N-registration, whether the beneficiary of the trust is a U.S. citizen or not . To create an FAA aircraft owner trust , the trust beneficiary must transfer legal title to Aviation Trust Company, which qualifies as a citizen of the United States of America. Aviation Trust Company will act on behalf of the beneficiary, and the aircraft will be titled and registered in the name of Aviation Trust Company, as Owner Trustee.
An aircraft trust is a relationship where a trustee owns an aircraft on behalf of an entity or individual. The trust is established as an extension of the true owner, also called the trustor or trust beneficiary. A common reason for establishing a trust is that a foreign citizen, limited partnership, or other party can use a trust to get a valid FAA registration for its aircraft that it would not otherwise qualify for due to strict FAA regulations. A trust is the most simple and cost efficient way to necessitate the needs of foreign parties and investors to own and/or operate aircraft being used or leased within the U.S. FAA records would reflect Aviation Trust Company as the titled and registered owner, rather than the actual owner or beneficiary. This makes determining the true owner of an aircraft by a third party more difficult. The true disadvantage depends on the aircraft’s true owner and the comfort level they have with the trust agreement.
Aviation Trust Company would be placed between the true owner and their asset. The aircraft will be registered to Aviation Trust Company and all correspondence from the FAA about the aircraft will be sent to Aviation Trust Company and forwarded to the true owner. Aviation Trust Company works hard to be very responsive to the needs of the true owner, making the relationship beneficial for all parties. Thousands of aircraft are registered with the FAA through a trust because they are a very flexible and readily accepted vehicle.A trust is simple to establish and can be completed in a couple of days; it can be dissolved just as quickly and easily.
As a Voting Trustee, at least 75 percent of the shares of the domestic (U.S.) aircraft-owning corporation, or limited liability company that does not otherwise qualify as a citizen of the United States of America, will be placed in the care of Aviation Trust Company. This will insure that the corporation legally qualifies for the FAA aircraft registration.