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The FAA Aircraft Registry's Latest Memo - No More Legal Opinions on Trusts

On Friday, May 5, the Office of the Chief Counsel for the FAA, Mark Nichols, delivered a shocking memorandum to the FAA aircraft registration community. The memo, authored by Alexandra Randazzo, Assistant Chief Counsel, Information Law Division, announced that effective next Monday, May 15, 2023, Aeronautical Center – Central Region Counsel (“ACC” as we refer to them here in Oklahoma City) will no longer issue legal opinions to what they refer to as “external stakeholders” on any subject relating to (a) registration of aircraft using non-citizen trusts, (b) registration of aircraft using revocable living trusts, or (c) the recordation of what they refer to as “aircraft-related instruments.”

We interpret the term “external stakeholders” to mean civilians, or anyone not employed by the FAA. It is unclear whether the ACC will give no further legal opinions on “the recordation of aircraft-related instruments” means they will not give recordation opinions relating to instruments relating to the subject matter of the memo (E.g., non-citizen trusts and estate planning trusts), or that they will no longer give opinions as to complicated issues relating to the recordation of any document by the FAA Aircraft Registry.

The footnote to the memo states that “if you encounter a ‘novel aircraft registration issue’ you may contact the [ACC] to discuss.” This provides a glimmer of hope that ACC will still respond to requests from the public for opinions relating to other issues, such as the propriety of registration under certain financing leases. However, the memo does reference “discussions” rather than written positions of the ACC. Written positions would be of primary interest to both the FAA Aircraft Registry and the general public.

As Chief Counsel clearly notes in the memo, the ACC is not required by the Federal Aviation Regulations to issue legal opinions on these subjects. Nevertheless, the ACC has provided this valued service to the public now for almost forty (40) years. The service has become integral to the process of registering aircraft using these closely scrutinized aircraft registration vehicles. This service has been more valuable than the public may realize because, when people file title and registration documents involving trusts, the practice of the FAA Aircraft Registry has long been to send the documents to their inside counsel (ACC), for review and approval. They do this before processing the documents filed and registering the related aircraft in the name of the trustee. Partly because of this FAA Registry procedure, we determined years ago that the most effective approach to the timely and accurate registration of aircraft was first to submit these documents to ACC ourselves, thus eliminating the delay in time created when the FAA Registry sent the documents to ACC.

As of this writing, I have made a request to speak with the ACC to get clarification on several questions the memo raises. I will plan to report more of what we learn as these matters become clearer.

Regardless of the points remaining to be clarified about this memo, this may be the most dramatic change in the public-facing role of the FAA (E.g., meeting the needs of the “external stakeholders”) that I have seen in my career and certainly since the FAA’s policy clarification on the treatment of non-citizen trusts. It appears to be yet another demonstration of what I have seen as a concerning change in the FAA: from a U.S. government branch in service of the people who make up the flying public, to one more exclusively serving the needs of the U.S. Federal Government itself.

Without regard to the reasons leading up to this most recent reaction by the FAA, over the past four to five years, I believe that we are working through a shift in the FAA’s personality, from one of serving the public in a mostly open and transparent way, to serving its own agenda by becoming more and more private and exclusive, without request for input from the stakeholders, the aviation flying public and those who serve them in the private sector.

My hope is that we can get back to a position of trusting one another, returning to something more like a true public-private partnership, where the external stakeholders can have the opportunity to help accomplish the noble goals of the FAA, serving the safety of the flying public, enhancing homeland security and providing a foundation for the economic soundness of the air carriers, aircraft lessors and lenders, and the private aircraft owners.


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