Creating The ONE TRUE Common Law Trust Aligned With The Divine

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One of the advantages of the Pure Trust organization is privacy.  In what way can privacy be helpful and why is it important to you and your family?   Let us look at it this way:  A man may keep secret the contents of a will he has made as long as he lives, but when he dies and the documents governing the disposal of his estate are filed in court as the law requires, they are for all the world to see.  Granted, members of the general public are not in the habit of meandering through the recording offices and browsing through the wills on file, but there are always reporters as well as certain specialists who make a job of combing files containing wills.  People compile mailing lists, for instance, of widows and other heirs and legatees, for one sort of solicitation or another.

 

We must keep in mind that wills of people of reputed means, and of social, business or professional prominence in their communities, are rated as news -- not as scandalous news, but as news that satisfies the curiosity of many -- friends, neighbors, and strangers.  Tidbits as to the wealth of people they know or have heard about, as to who is going to get what, or who is being cut off, are choice pieces of news.  Consequently, the court where wills are filed in "probate" is on the court reporter's route.  Some newspapers, generally in the smaller communities, faithfully report wills filed for probate, naming the beneficiaries and citing such estimates of worth as may be gleaned from the documents.  It may be only the high spots that are covered.  Should anything out of the ordinary be revealed, some headlines might certainly be expected.

 

How the Pure Trust Organization Helps

 

In most of us, there is a deeply felt, though rarely voiced, urge to map out areas in terms of space and thought in human relations that we can call our own -- we have our private individual worlds and instinctively defend them.

 

"For a man's house is his castle," wrote Sir Edward Coke, in the pedantic fashion of three centuries ago. This is popularly misremembered as "The Englishman's home is his castle." Because Coke was writing of the English common law, there is a certain appropriateness here that he helped to formulate.  It is particularly relevant due to the fact that out of the English system of common law the Pure Trust Organization was developed, which can truly be a castle of refuge in time of need to a man, his family and all that he holds dear.  A Pure Trust Organization can be created during a lifetime, thus readily distinguishable from the testamentary trust, the terms of which are stated in a "Last Will and Testament."  The Pure Trust Organization is a now and forever trust organization.  It comes into existence when the trust organization indenture, which states its terms, is signed.  At that point, the ownership of property to be owned by the trust organization is conveyed to the trust.  The creator of the trust may be someone outside of the family, not related by birth or marriage.  Since he may appoint the first trustee and this trustee may appoint the second and those two may appoint others, on the death of any trustee the trust may be continued and usually is.  Since the members of the family can be trustees, they may draw fees.  Family members may also be beneficiaries, and often are.  Since the trust need never die, the property it holds may continue to grow and pay benefits to the beneficiaries.  By renewing the life of the trust, the trustees may extend its life indefinitely, as has been the case in several trusts in the United States. This is important to comprehend.  When you decide to transition, the board can appoint another trustee and the trust continues.  This is how property remains as wealth to a family or organization.

 

The Important Part

 

Here is where the element of privacy comes in:  There is no process of probate that is to be gone through, no routine spreading of trust agreements in public records for every Tom, Dick and Harry to peruse.  There is no required process of notification to people who may consider themselves neglected or unfairly dealt with -- no exposed invitation to come into court and challenge the agreement.  The Pure Trust Organization is a private contract between the creator of the trust and the one(s) with assets or an estate to protect (known as the exchanger).  After the death of the exchanger, the only persons to whom the trustee owes duties are the beneficiaries of the trust -- the holders of Beneficial Certificate Units.  To these the trustee owes the duty of absolute undiluted loyalty and confidentiality.

 

In truth, we should point out some exceptions to the sweeping claims we have just made.  The Trust Certificate holders conceivably may have some dissatisfaction with the terms of the trust organization.  While litigation can expose the trust organization to public gaze, it is difficult and extremely unusual for this to happen.  Thus, it becomes clear that the Pure Trust Organization is an instrument that contributes greatly to those who desire privacy for themselves and their loved ones. This is indeed the premises for Divine authority….privacy.  No one has the right to know any of your business. This is why gossip and opening your mouth too much removes you from Divine Authority and descends you into the enslavement of the corporation. 

 

 

And remember, the trust is “owned” and managed by the trustees.  They are accountable only to requirements and limitations of the trust indenture, similar to the articles of incorporation of a corporation.  As long as the trustees are operating within those limitations, then the only ones they need to satisfy are themselves.  The trust indenture requires all actions and activities to be carried out for the long-term purpose of benefiting the beneficiaries.  But that same trust indenture normally leaves the judgment calls up to the trustees.

 

  "If it is free of control by Certificate Holders, then it is a Pure Trust."

Schuman Heink v. Folsomn, 159 N.E. 250

 

 

It is not unusual for the board of trustees to decide that they can best serve the trust (and its beneficiaries) if the trust purchases a nice house for use by each trustee.  And often a nice car.  And usually a nice retirement plan. And so on and so on.  And all these purchases are generally not reportable to any government agency, beyond the legal requirements involved in purchasing the property itself.  This form of "compensating" the trustees is the norm when the trustees are also the exchangers.  All the trustees need do is document their belief that these actions will make it easier for the trustees to manage the trust assets, and any trust activity they choose can and will be justified with respect to the trust indenture.  Remember that the trustees of a pure trust are accountable for their intent to benefit the trust, and therefore the trust beneficiaries. They are not accountable for the ultimate results in the event that those activities cannot be proven to actually result in benefits to the trust’s beneficiaries.  While trustees of a statutory trust can be sued and directors can be fired if their activities do not clearly and directly benefit their respective bosses,  (the beneficiaries or shareholders), the trustees of a pure trust are only held accountable for their intent to bring about those tangible benefits.

 

Of note here is the issue of federal reporting requirements. I have personally spoken with the IRS District office for Tele-TIN in Dallas, one of the offices that assigns Employer ID Numbers (EINs) to employers and other business entities.  A new business can obtain an EIN from the IRS by calling the Tele-TIN phone number and submitting the information contained in the Form SS-4, Application for Employer Identification Number.  While it may not be required by law for a business trust to obtain an EIN from the IRS, it is sometimes an advisable step, especially when the business trust wishes to utilize bank accounts, investment accounts, etc.  When I personally called the Dallas office for Tele-TIN, I was told that the IRS was no longer issuing EIN's to business trusts over the phone.  When I asked why, I was told to complete the Form SS-4 as normal, and the IRS would issue the number as they always have, but that the EIN would not be issued over the Tele-TIN phone number.  I requested to speak with a supervisor, and finally was able to get someone who identified himself as the "district manager." When I asked specific questions, I was given more information.  It seems that the ability to obtain an EIN over the Tele-TIN phone number was a "taxpayer service," and since so many business trusts were choosing to not file returns with the IRS, they could not be called taxpayers as defined in the Internal Revenue Code.  "Since taxpayer benefits are reserved for taxpayers, business trusts will no longer be able to obtain an EIN over the Tele-TIN phone number," the district manager told me. He then gave me a phone number in the national office of the IRS if I wanted to pursue the matter.  Here was the "district manager" of the IRS admitting that a business trust didn't have to file tax returns because they were not taxpayers as defined by the Internal Revenue Code!  The relevant section of the Code of Federal Regulations follows:

 

 

                         " Business Trusts -- There are other arrangements which are known as trusts because the legal title to property is conveyed to trustees for the benefit of beneficiaries, but which are not classified as trusts for purposes of the Internal Revenue Code, because they are not simply arrangements to protect or conserve the property for the Beneficiaries."

 

Another important fact to bear in mind is the continuity provision of the trust.  If and when one or more of the trustees die, the trust continues.  The assets, actions and business activities remain uninterrupted by the death.  The reason for this is simple: the trust is totally separate from the trustees.  The trust is an entity in and of itself.  Of course, the more trustees in a UBTO, the less the impact on the trust when one of them dies.  If the trust has only one trustee, and if there are no contingent trustees pre-appointed, and if the one trustee also manages the business activities, then the impact of that trustee’s death will be maximized.  But there are steps which can be taken to minimize the business setback even in those circumstances.

 

Not only does the trust, and the business, continue, but there is no probate process or probate costs incurred.  Often the family business must be sold to pay the estate taxes of the primary bread winner upon his/her death.  Anywhere from 25% to 75% of the estate can be confiscated in taxes, fees and other probate costs.  And the probate judge is almost totally unaccountable in the costs he/she can charge to an estate before dispersing the leftovers.  This cannot happen with a business trust.  Absolutely no estate taxes or probate costs are incurred by the pure trust organization.  Both trust assets and life insurance benefits have the enviable status of totally bypassing the probate process.