Pure Trust Template

[propilot22]

Hi all. I'm wanting to form a pure/common law trust and was wondering if anyone might have a template or an example of such a trust that they would be willing to share. This is mainly for asset protection but will be used in conjunction with an LLC for my business. Any help would be appreciated. God bless.

[David Merrill]

I suggest you appoint Donald Burnham ENSINAT for this one:

http://www.whitehouse.gov/government/densenat-bio.html

http://www.suijuris.net/forum/taxati...er+appointment

[charlesa6]

propilot22, welcome to the forum.

[AndyK]

Originally Posted by propilot22

Hi all. I'm wanting to form a pure/common law trust and was wondering if anyone might have a template or an example of such a trust that they would be willing to share. This is mainly for asset protection but will be used in conjunction with an LLC for my business. Any help would be appreciated. God bless.

I recommend that you do some serious research on the effectiveness of a "pure/common law trust" with respect to asset protection.

The promoters who sell trust packages over the Internet somehow omit any mention of the failures of these "trusts" to accomplish anything other than line their pockets with set-up fees.

If you're going to spend a few thousand dollars to have someone set them up for you, you could spend a few hundred more and get a second opinion.

On the other hand, you could always have David Merrill set it up and then you're guaranteed to have it work perfectly.

[weishaupt1776]

Yup the atty's want you to play around with statutory entitities so they can "defend" you in court so you have to spend even more FRNS

Andy, since you are so knowledgable about this, and with your online Westlaw/Lexis access at a D.C. Department; then why are Pure Trusts mentioned in these following authoritative legal references: ??
(i.e. Massachusettes Trusts)

4A American Jurisprudence Legal Forms 2d Business Trusts (162 chapters);16A Fletcher Cyclopedia of Private Corporations § 8227 through 8274; 13 American Jurisprudence 2d Business Trusts (108 chapters); and 12A Corpus Juris Secundum Business Trusts (67 chapters)

Anxiously awaiting the spinarooski

[REDCLOUD]

The following letter ruling from the Mass. Commisioner of revenue is instructive

Letter Ruling 01-12: Engaged in Business; Filing of Massachusetts Business Trust with Sec. of State

November 08, 2001



This is in reply to your request on behalf of Bank for a ruling that the filing of a Massachusetts Business Trust document with the Massachusetts Secretary of State, without more, will not subject such Massachusetts Business Trust to taxation in Massachusetts.

STATEMENT OF FACTS

Bank, a non-United States bank, is interested in raising capital from United States investors. As far as is relevant to this request, the entities used to accomplish the capital raising and their main activities are as follows:

A. Trust

Bank intends to organize Trust, a Massachusetts Business Trust ("MBT"), the transferable common securities of which will be owned by a nominal U.S. tax resident subsidiary of the bank. Trust will issue transferable Trust Securities ("Trust Securities") to US investors. The investors will also enter into a forward purchase contract for the purchase of ordinary shares of the bank. The investors will pledge the Trust Securities as security for the purchase of the ordinary shares. On the settlement date under the forward purchase contract, the investors will be obliged either to pay the cash amount required for the purchase of the ordinary shares or to deliver the Trust Securities to the Bank in full satisfaction of their purchase obligation. If the investors default under the forward purchase contract, the Trust Securities will be delivered to the Bank by the collateral agent. Investors will receive non-cumulative distributions on the Trust Securities. Trust will invest the proceeds from the issue of its securities in Fund Securities issued by "Fund Trust." (1) The Trust will have the right to redeem all of the outstanding Trust Securities following settlement under the forward purchase contract. For federal tax purposes, the Trust will be treated as a grantor trust.

In certain defined circumstances, the trustees of the Trust may elect to liquidate the Trust and distribute the Fund Securities to the investors (or the collateral agent if applicable). These circumstances are where there are adverse changes in U.S. investment company law or tax law.

Trust will conduct no business and have no trustees, employees, offices or property in Massachusetts. No contracts will be executed by Trust in Massachusetts. Trust's books and records will be maintained outside Massachusetts and its trustee will be a non-Massachusetts trustee. For purposes of organizing as an MBT, Trust will file and record its declaration of trust instrument with the Massachusetts Secretary of State, as required by G. L. c. 182, § 2. Trust will have no other connection to Massachusetts.

The Trust qualifies as a fixed investment trust in accordance with 830 CMR 62.8.1 and 26 CFR 301.7701-4(c). (2)

B. "Fund Trust"

"Fund Trust" will be organized as an MBT, the transferable common securities of which will be owned by Bank directly. Fund Trust will also issue transferable Securities, all of which will be owned by Trust. The Fund Securities will also be entitled to non-cumulative distributions. Fund Trust will exchange the U.S. dollar proceeds from the issue of the Fund Securities for pounds sterling and invest the proceeds in pound sterling-denominated bearer debentures issued by a tax resident corporation that will be a wholly owned subsidiary of the bank. The denominated bearer debentures will be entitled to interest at a fixed rate. The tax resident corporation will, in turn, use the proceeds to subscribe for sterling denominated debentures of the bank's branch. For federal purposes, Fund Trust will elect to be treated as a partnership and will not be subject to an entity level tax.

The Fund Trust also will conduct no business and have no trustees, employees, offices or property in Massachusetts. No contracts will be executed by the Fund Trust in Massachusetts. The income of the Fund Trust will be from sources outside of Massachusetts.
Fund Trust's books and records will also be maintained outside Massachusetts and its trustee will be a non-Massachusetts trustee. For purposes of organizing as an MBT, Fund Trust will file and record its declaration of trust instrument with the Massachusetts Secretary of State, as required by G. L. c. 182, § 2.

RULING REQUESTED

The taxpayer requests a ruling that the mere filing of a Massachusetts Business Trust document with the Massachusetts Secretary of State, without more, will not subject the Trust or the Fund Trust to taxation in Massachusetts.

DISCUSSION

In Massachusetts, business trusts are subject to personal income tax and taxed as individuals because they enjoy no franchise conferred by the Legislature. See Letter Ruling 91-2. Massachusetts General Laws, chapter 62, § 8(a) states that "a corporate trust engaged within the commonwealth in any business, activity or transaction, whether or not it maintains an office or place of business within the commonwealth, shall be subject to the taxes imposed by this chapter unless exempted pursuant to paragraph (b)."

General Laws chapter 182 requires the trustees of a Massachusetts business trust to file a copy of a declaration of trust with the Secretary of State and the clerk of every city or town where the trust has its usual place of business. However, the filing of the declaration of trust is not a condition precedent to the existence of the trust. See Letter Ruling 91-2.

The activities of Trust and Fund Trust (the "Trusts") are confined to issuing Securities and common securities and investing the proceeds of the sales of its securities in other Securities or debentures and engaging in incidental activities, all carried on outside Massachusetts. The Trusts will not have any trustees, employees, offices, books and records or property in Massachusetts, nor will they execute any contracts in the Commonwealth. The only connection the trusts will have to Massachusetts is that they will file their respective trust instruments with the Massachusetts Secretary of State, as required by G. L. c. 182, § 2.

In addition, with regard to Trust, the taxpayer has represented that it qualifies as a fixed investment trust. 830 CMR 62.8(l) states that a fixed investment trust "is not, as an entity, engaged in any business, activity or transaction for purposes of M.G.L. c. 62, § 8(a)." See Letter Ruling 88-6.

CONCLUSION

Based upon the facts stated and representations made in the request, and for the reasons discussed above, we determine that the Trusts are not engaged in any business, activity or transaction in the Commonwealth and that the mere filing of a Massachusetts Business Trust document with the Massachusetts Secretary of State, without more, will not subject the Trust or the Fund Trust to taxation in Massachusetts under G. L. c. 62, § 8.

Very truly yours,

/s/Bernard F. Crowley, Jr.,
Bernard F. Crowley, Jr.,
Acting Commissioner of Revenue


November 08, 2001
LR 01-12

Footnotes:

1. Fund Trust is discussed below.
2. The taxpayer has stated that it has received an opinion of counsel stating that the Trust will be classified as a "fixed investement trust" in accordance with 830 CMR 62.8.1 and 36 CFR 301.7701-4(c)

Key to note here is

"In Massachusetts, business trusts are subject to personal income tax and taxed as individuals because they enjoy no franchise conferred by the Legislature."

This is the same for "Pure Trusts"

In other words "Pure Trusts" and "MBT" are Revocable and are the same as ownig proerty in your own name.

Irrevocable trusts are probably what you are looking for, they are effective at creditor protection and valid in every state and have much greater scope and flexibility in their coverage.

[David Merrill]

Originally Posted by REDCLOUD

This is the same for "Pure Trusts"

That may be true - you have however failed to prove it or even offer evidence. Only juxtapositioned an opinion about business trusts.


Regards,

David Merrill.

[Lawyerdude]

(post edited for being unrespectful)

[David Merrill]

Originally Posted by Lawyerdude

Merrill, Remember Robert Mora? He paid you $500 for your bull**** papers. They did him absolutely no good in his traffic ticket.

You got my name wrong. More and more people here understand why. I think you must have that fellow's name incorrect also. Maybe he has it incorrect too; I don't know. Even so, I imagine he would rather you not be testifying for him over the Internet - especially using any name he uses. The Readers here are wise enough not to accept a third party (called Lawyerdude) complaining for somebody else who may or may not be complaining.

Expect this to be the last you will hear in response from me. You are the seventh on the Ignore List.

Judge Roy Bean
B Rookard
Shoonra
AndyK
UGA Lawdog
Skeptic62
Lawyerdude

Be careful about hearsay. That is important if you are to be a court of competent jurisdiction. Any competent court would disregard Lawyerdude and judging by what I can discern about him, he knows that.


Regards,

David Merrill.

[Admin]

Lawyerdude,

Looks like the last time you were banned for a period of time you failed to learn your lesson to be respectful. We gave you second chance, now you can consider yourself undefinitely banned.

Originally Posted by Lawyerdude

Merrill, Remember Robert Mora? He paid you $500 for your bull**** papers. They did him absolutely no good in his traffic ticket.