Bank of Utah has established itself as an industry leader in providing aircraft owner trustee services for US and non-US citizens and corporations. While US law requires that all aircraft be registered in the name of a US citizens, the Federal Aviation Administration (FAA) has recognized the use of Owner Trusts to facilitate N-registration whether the beneficiary of the trust is a US citizen or not.
The importance and legitimacy of the Owner Trust structure to the US aircraft market is well recognized and has been used for many decades.
As is standard in the corporate trust industry, banks often act as a trustee to own a variety of assets, including aircraft, on behalf of a third-party. Bank of Utah does not purchase these assets for its own account, nor does it lend or finance the acquisition of any of these assets. Instead, its only role in these transactions is that of trustee. Bank of Utah does not retain operational control of any of the assets owned in trust but transfers such control to an operator or lessee by way of a written agreement.
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Why are Aircraft Owner Trusts used and who uses them?
- Aircraft leasing companies which lease to airlines and businesses and which do not qualify as a US citizen;
- Publicly traded U.S. companies that may not qualify as U.S. citizens or are unsure if they qualify as a U.S. citizen;
- Partnerships that are composed entirely of U.S. citizens but do not qualify as U.S. citizens because not all of the partners are individuals;*
- Airlines which lease aircraft and do not want the disruption of operations which may occur if the equity participant transfers the interest in the aircraft;
- Manufacturers selling to foreign purchasers;
- Green aircraft deliveries;
- Aircraft which are in maintenance and require an N registration;
- Leasing companies that wish to maintain flexibility for future syndication of ownership interest while allowing the aircraft to continue to operate unaffected;
- Companies and individuals who wish to maintain privacy while complying with government disclosure requirements;
- Export ferry flights;
- Lenders that want a fiduciary to hold the aircraft in trust until the loan is paid off; and
- Non-citizens who base and operate the aircraft in the U.S. for business or personal reasons.
*FAA Regulations require that all partners be US citizens in order for the partnership to qualify for US registration.