Navigating UCC Financing Statements When Collateral is Held in a Trust

Caitlin: Hello, everyone, and welcome to today's webinar, "The UCC Financing Statement When Collateral is Held in a Trust." My name is Caitlin Alaburda, and I will be your moderator.

Joining us today is Paul Hodnefield. Paul is Associate General Counsel for CSC, where he is responsible for advising the company regarding real estate recording, notary, Uniform Commercial Code, and other public record transaction services. And with that, let's welcome Paul.

Paul: Thank you, Caitlin. In my role at CSC as the I guess the subject matter resource for all things related to UCC search and filing, one of the areas that I get a lot of questions about, from both internally and a lot from our customers as well, is the filing and preparation of a financing statement when the collateral is held in a trust, and there's a number of reasons for this. Dealing with trusts as debtors poses some challenges for legal professionals and lenders alike, and it can be somewhat confusing as to what is really required. And there's sometimes a tendency to overthink how the financing statement should be prepared. So what I'm going to do today is give you some idea of how to deal with this.

And some of the challenges that filers run into include, and this is a big one, when it comes to trust-related collateral and preparing the financing statement, the process isn't really intuitive. In some cases, for example, the name of the debtor required for a financing statement is different from the actual name of the debtor. The location of the debtor may be different than one would expect intuitively. But these rules do tend to make sense when viewed as a whole. So those are some things that I'll be covering today.

There's also a temptation to impute other types of law to trust-related UCC financing statements, for example real estate law or other types of law where, you know, like contract or, as I said real estate, where the form of the name used for the trust may be different than that required by the UCC.

And there's also sometimes a temptation to overcomplicate the UCC records when the collateral is held in a trust, you know, to think that more information is required than what Article 9 really says. So we do see in the name fields frequently extra information inserted in there regarding trusts. Sometimes the entire history of the trust we'll find in a name field. And really focusing I think sometimes on information or data that really isn't all that relevant to the filing process or at least to certain aspects of it.

So all of these are things that I'm going to take a look at today and point out what is required and just as importantly what kinds of errors that are commonly made in this process. And the way I'm going to do it today is I'm going to start out going through some essential UCC concepts that it's important to understand in any filing discussion about Article 9. Then I'll move on and talk about the debtor name, the other filing requirements, such as distinguishing information in some cases for certain trusts, the debtor mailing address when the collateral is held in a trust, and where to file when the collateral is held in a trust. And at the very end, hopefully there will be some time for Q&A. And if not, you can submit your questions by the Q&A widget, and we'll capture them all and answer those we can't get to during the presentation offline afterwards.

So let's go ahead and start with some essential concepts of the UCC. One of the most important things to remember is that the UCC is a notice filing system. That means that what gets filed in the UCC records are notices, a mere notice that a security interest may exist. The UCC record is not an operative document or an enforceable document. Nobody can sue to enforce a UCC financing statement. Rather they're just notices to alert interested parties that a security interest may exist, and this has an impact on the contents of records and what gets filed and how they get searched.

Now as mere notices, UCC records don't provide a lot of detailed information. They're really just enough to alert somebody that a security interest may exist. So they don't contain dollar amounts, terms and conditions, things like that. And in the case of trust-related financing statements, they may not provide all the details regarding the trusts, the trustees, and things like that. But we'll get back to exactly what is required as we move through the presentation.

Because the UCC doesn't require financing statements to provide all the details of a transaction, that means interested parties, in other words those who search the records, are expected to look beyond the public record for the full state of affairs. They're not entitled to rely solely on the contents of the public record.

Some other essential concepts are that there are multiple types of trusts, and depending on the type of trust, there could be different rules that apply to debtor name requirements, to filing location, and things like that.

One type of a trust is the registered organization trust. This came about in the 2010 amendments to Article 9 because there was some question over whether trusts, such as the Massachusetts business trust and similar laws in many other states, similar organizations fell within registered organization name rules rather than the trust rules. And the 2010 amendments clarified that they are indeed registered organizations, and so they're treated as a registered organization for the filing location, in other words where the debtor is located. For the debtor name sufficiency and other purposes, they're the exact same as an LLC or a corporation.

Then the other type of trust would be the common law, which would include a testamentary trust. They're treated the same. And with these types of trusts, they're created through a trust agreement. There's no public record filing required, and these are governed by different laws. The type of debtor, it's not the organization necessarily. It's typically the trustee, but depending on the law of certain states it could be the trust itself that's the actual debtor. The location of the debtor is typically going to be the location of the trustee, or if the trust is the actual debtor, then the location of the trust. And the debtor name sufficiency for these types of trusts is determined under a different section than that applicable to registered organization trust rules.

So when dealing with trusts as debtors and preparing to file a financing statement, there are some initial determinations that have to be made. First is, who's the debtor? Is it a registered organization? Is it the trustee of a common law or testamentary trust? Or is it, under the law of the applicable state, the trust itself? That's an initial determination that has to be made because that can affect the name that's required and it can affect the filing location.

It's also necessary to determine the debtor name for purposes of the financing statement. To do this requires access to the organic record of the trust.

It's necessary to determine the filing location, and that's typically going to be in the location of the debtor unless we're dealing with real estate related collateral. But assuming it's not real estate related collateral, like fixtures, timber to be cut, minerals to be extracted, then the records would be filed in the central filing office of the state where the law governs perfection and priority. And that governing law is determined by the location of the debtor, and the location will be determined under the standard rules of 9-307 that are applicable to the type of debtor. That's why it's important to determine whether the trust is a registered organization or if the debtor is a trust or the trustee.

Now the starting point for any due diligence related to trusts is always going to be the organic record of the trust. And that's because Article 9 requires, for one thing it requires the name on the organic record if a name is specified. And without the organic record, the filer isn't going to know what name is required. Now the organic record may be called different things depending on common usage in a particular jurisdiction. Sometimes it's called a declaration of trust. It might be called a trust agreement. It could be called something else. Certainly a last will and testament can create a trust as well. But know the terminology in the particular jurisdiction, but whatever that record is that creates the trust.

Now review of this record is essential because without it the secured party simply can't determine what name is required for filing purposes. It's just simply you can't determine it without looking at the language of the trust's organic record.

Now I know there are some challenges in getting access to the trust's organic record, and there may be more than one state where a lender might not even be able to get access to it by law. So it can be a challenge in some cases. But be aware that this is really the only sufficient source document. This is where the process really needs to start.

Now, in addition to getting access to the organic record of the trust, there are some other steps involved. Identify the name of the trust, whether the organic record specifies the name of the trust. Or if no name is specified or if it's not clear whether it's specified, it's necessary to identify the settlor, the person or entity that created the trust. And identify any of the current trustees, especially if the trustees are the debtors, the people that have legal title to the collateral that's held in the trust.

So those are the starting . . . those are the initial or the essential concepts and the initial due diligence process. Now I want to move on and talk about probably the most important part of the filing process when the debtor is or when the collateral is held in a trust, and again my focus today is on the common law trust, not on registered organization trusts.

But the most important thing is by far the debtor name. It is critical to get the debtor name right for purposes of the financing statement, because if it's not right, the secured party can find itself unperfected and that can be just as bad as being unsecured.

Now why are debtor names so important here with trusts? Because there is a real challenge as to how to provide them. There's a temptation to provide them many different ways. We see them provided many different ways.

For example, here are five different examples of financing statements filed against the same trust. One of these names is likely correct. Without access to the organic record, it's going to be very hard to tell. But we can tell that some of these are and probably at least three out of the four of these or three out of the five here are going to be seriously misleading and not effective. There are so many different ways that people historically have provided trust names, and it's really important to pay attention to what Article 9 requires and follow that exactly.

So when it comes to trust-related debtor name sufficiency, I'm going to recap the general debtor name rules. One is the debtor name must strictly comply with Section 9-503(a). That's the section that sets out the debtor name requirements for all types of debtors. And now it's important to understand that this section sets forth the debtor name for purposes of the financing statement, not necessarily for other purposes, such as for the security agreement or the note and other things.

Bear in mind that any deviation from the correct name, even a comma out of place means that it's not the name of the debtor. And if it's not the name of the debtor, then it doesn't comply with Section 9-503(a) and the financing statement will be seriously misleading under 9-506(b). This is a very high standard, and there's a good reason for this and that's because financing statements are retrieved by debtor name. So, because of that, if there are deviations in the debtor name, it may prevent a searcher from finding all the relevant records. Therefore Article 9 has very strict requirements and requires the strict compliance with those requirements or the debtor name will make the record seriously misleading and not effective.

There is an exception to that though, and that is under Section 9-506(c). If a search of the debtor's correct name, using the filing office's standard search logic, would disclose the record, then an insufficient debtor name does not make the record seriously misleading. In other words, if you search the correct name and the financing statement shows up, it's effective, even though it might have a deficiency in the name, because it's not a hidden lien and there's no harm in making it effective.

However, bear in mind that the search logic used by the vast majority of jurisdictions is very narrow and will not overlook many deviations in the name. The standard search logic that most states use will disregard minor differences in upper and lower case, punctuation, ending noise words, like inc., corporation, limited partnership, words, phrases, and abbreviations that indicate the type of entity. It will disregard "the" at beginning of the name and generally disregard spaces in most jurisdictions at least for organization names. If it's an individual name, the search logic isn't as forgiving. There's a different search logic that's applied to the individual name fields.

And the way that the search logic disregards, at least in an organization name, these different factors is through a normalization process. When a financing statement is filed, the computer takes the name on the financing statement, makes it case neutral. It strips out punctuation. It strips out ending noise words starting at the far end of the name and working back until it runs out of ending noise words. It strips out "the" from the beginning of the name and finally removes spaces. And what you're left with is a string of text that is derived from the name on the financing statement. Now, when somebody conducts a search, the name searched is run through the same process and the normalized string resulting from the name searched is compared to the normalized names in the index and only exact matches are reported at that point.

So here's how it would work in practice. There's a financing statement out there that lists the debtor as The Harper Realty Trust, Gregory Gaudi Trustee. Well, the correct name is The Harper Realty Trust. So if you normalize that name, you'll see it normalizes to HARPERREALTY, all one string of text because it drops "the" at the beginning and "trust" is an ending noise word. If you normalize the name on the financing statement, "trustee" is an ending noise word, but "Gaudi" is not. And as a result, everything to the left of "Gaudi" will remain in there.

And the two strings of text, if you search under The Harper Realty Trust, it's not going to find . . . the resulting normalized string of text won't match the financing statement string of text in the index, and because they do not match the computer will not report it. It's not the name of the debtor on the financing statement with the extra text, and the extra text will prevent the search logic from finding it. So it'll render the financing statement seriously misleading and not effective.

Now the rules for common law trusts, anything other than a registered organization, those are found in Section 9-503(a)(3), and it's one of the more detailed name requirements in 9-503. And we'll go through this. We'll break it down and go through it bit by bit.

First in Section 9-503(a)(3), the financing statement name requirements require if the organic record of the trust specifies a name, the name so specified. So it would be the name of the trust if a name is specified. But if no name is specified, then it would be the name of the settlor or, in the case of a testamentary trust, the testator. Note that none of these are the name of the trustee unless, of course, the trustee happens to be the settlor of an unnamed trust. The name of the trustee is not sufficient for purposes of Article 9 even though the trustee may, in fact, be the actual debtor.

There are some additional requirements in Section 9-503(a)(3) in certain cases. If the name of the settlor is provided, there must be some distinguishing information provided for the trust to distinguish it from other trusts that have one or more of the same settlors or testators, and also an indication that the collateral is held in a trust.

Now these additional requirements in Section 9-503(a)(3)(B) are required for sufficiency of the record. These are debtor name requirements that are in addition to those listed 9-502 for sufficiency of the record. In other words, without this additional information, the debtor name arguably is not sufficient under Article 9.

Well, let's look at the name of the trust. So the 9-503(a)(3) uses the term "specifies." "Specifies" is a term used only in the trust section and not in any other debtor name section. So it needs the name specified in the organic record of the trust. Well, for a common law trust, that might be the declaration or trust agreement. In a testamentary trust, it would be the last will and testament.

Now what does it mean to "specify" the name? Well, we'll take a look at what the dictionary definition of "specify" is, because it's different than the term "indicate" that's used elsewhere in the debtor name provisions. So it means to mention specifically, to state it in full and explicit terms, to point out, and to state precisely or in detail, or to distinguish by words one thing from another. So it seems to be very particular. And the source of this, by the way, was Black's Law Dictionary. So "specify" seems to require a certain degree of precision.

So what does it mean to specify? You could have a trust agreement that says something like the trust is known as something. Does that specify what it's known as, or is that something other than specify?

I think that the safest assumption is that it's specified if it expressly states the name is something, much like you would see in articles of incorporation or articles of organization for an LLC. So it needs to be pretty specific. If it's less than very clearly stated, it falls into a gray area, and the filer may want to approach it both as if the name is specified and also probably provide as additional debtors the name of the settlors.

There are a number of red flags that we can point out regarding the name of the trust. I mean, if a name is specified, that's the name that needs to go on the record. Simple as that. It needs to be exactly the name specified, nothing more and nothing less.

But there are a lot of red flags we see. When somebody is preparing a financing statement and they see any of these in the debtor name, they should go back and take a look and determine whether the name of the trust is truly correct.

For one thing, if it includes the word "trustee." Remember the name of the trustee is not sufficient as the name of the debtor. And if it indicates that some name is provided in the capacity of trustee, that's not part of the name typically and probably would render the financing statement ineffective or at least render the name insufficient.

If the name is so long that it's continued or referenced elsewhere. I have yet to see a properly provided name even for a trust that does not easily fit within the space provided on a financing statement.

If an agreement is listed as the debtor, that might be a red flag because the name of an agreement is not required by Article 9. Rather the name of the trust is required, not the name of the trust agreement.

Abbreviations generally are used, certain abbreviations anyway are used to indicate additional descriptive information, which might be helpful to distinguish the trust. But if it appears in a debtor name is typically going to render the financing statement seriously misleading.

Here's an example. I'll go through some examples of all of these. First of all, here we have in the organization name of the trust a couple of parties listed as trustees of a trust. Well, remember that the name of the trustee is not sufficient as the name of the debtor. Capacity is typically not part of a debtor name anyway.

There are lots of other problems with this. First of all, even if the names of the trustees were required in their individual capacities, they would need to be listed as individual debtors. And there is some discussion about that. I'll come back to that later.

But also you have the trust dated a certain date. Unless that is specified as part of the name in the organic record, that would not be sufficient. So there's lots of problems with this one.

Here, again, we have a name where it's providing the name of the trustee. Remember the name of the trustee is generally not sufficient as the name of the debtor. Also individual names should be provided in the individual name fields, because if they're going to be searched as individuals, that's where they show up. And it didn't include the name of a trust or the name of the settlor in this particular record. So the name required by Article 9 probably isn't anywhere on the record.

Another red flag, names that are so long that they have to be continued somewhere. Here, for example, we have a lot of errors in this name as well, but they provided where to look for the continuation for the complete name. The problem is that whatever goes in the name field is going to be indexed exactly as it appears, and that's what's going to wind up in the searchable index. So rather than the full name provided by the filer here, what goes in is going to be exactly what's in the name field. And if you go to the state and do a search and look, it's going to show up exactly as it appears there. And, in fact, this is the organization name field, and if somebody did a search in the organization name field on the name of the trust or the name of the settlor, they're never going to find this. It just isn't going to happen.

Here's another example. If it's too long to fit on one line, that should be a red flag. Here we have 458 characters. In the state where this was filed, it can't even accommodate 458 characters, and the name, when it was indexed into the searchable index, was truncated to this. And what makes it worse is that the only unique identifier to the trust in this whole thing was at the very end and was truncated. So there is no way that anybody searching for Trust No. 315, even if that was the correct name of the trust, they simply never would have been able to find it.

Another red flag, I mentioned that sometimes agreements get listed as the debtor. Here we have the Blaine 1977 Revocable Trust Agreement, helpfully adding in as amended. Problem is the agreement is not the debtor. It's not the debtor name required by Article 9. The amended portion is just a script of text. It wouldn't belong in a debtor name even if the first part of the name there was the correct debtor name.

Here's another example. They put in the name of the trust agreement. The name of the trust agreement is not sufficient as the name of the debtor under Article 9.

Other red flags, I mentioned abbreviations, such as for the benefit of, under trust agreement dated, u/a/d under agreement dated. There are a lot of different abbreviations that find their way into trust-related debtor names. All of these generally precede information that is intended to either specify the particular trust or distinguish the trust. None of these belong in a name field typically. The only time they would go in a name field is if it's said in the organic record the name of this trust is the James W. Campion III Trust under agreement dated, that type of thing. If it's not specified in the organic record, it doesn't belong in the name field.

So the best practices, when it comes to providing the name of the trust, use the name specified in the organic record and provide it exactly as it is specified. Do not abbreviate or condense or add anything to the name. So omit anything that isn't part of the name, like the name of the trustee, the name of the beneficiary, unless these things are specified in the name of the trust. Frankly, I don't think the date is generally specified as part of the name of the trust.

If the trust has a name specified in the organic documents, be sure to provide that name as an organization debtor name, even if the actual debtor is the trustee of the trust. This is important because if the trustee is an individual, there is some argument, by some very respected commentators, that it needs to go into the field that corresponds to the nature of the debtor rather than to the nature of the name. I disagree with this because it can't be searched. There's no way to search it that way. So always provide the name of the debtor in the fields that correspond to the type of debtor.

Now once that's done, there is nothing wrong with also providing it as a separate debtor in the fields that correspond to the nature of the debtor. So if you have an individual debtor, the trustee, and you have a name specified for the trust, I suppose if somebody wanted to, the first thing they need to do is get it in the name of the trust or in the organizational name of the trust, and then they could also, as a belt-and-suspenders approach, put it in the individual name field as well. But it could never be searched that way. So that's a good belt-and-suspenders approach if there's any concern, is do it both ways.

If the name of the settlor or testator is required, that can be determined by the organic record of the trust. Now, for a common law trust, the settlor may be an individual, or it could be an organization. So it's important to identify who the settlor is, and that can be determined from the organic record of the trust. If it's a testamentary trust, of course, it's always going to be an individual as the testator.

Now, there is a safe harbor in Article 9, under 9-503(h), for the name of the settlor or testator, and that would be the name of the party listed in the organic record. However, if the settlor is a registered organization, then under Article 9, the registered organization rules would apply, same as if the settlor was a registered organization debtor in its own right. But for any other settlor or testator, it would be the name indicated in the trust's organic record.

Now, when it comes to providing the name of the settlor, it's really the same practice as for an individual name, because if the settlor is an individual, it can't be searched in an organization name field consistently. There might be no way to find it. So always put it in the individual name field. Enter it as if that person is a debtor in their own right. And if the debtor is actually the trust, an organization, and the individual name is required, put the individual also, as a belt-and-suspenders approach, as a separate debtor in the organization name field.

Now, if the settlor is an organization and has an organization name, always enter the organization name in the organization name field again. And this would be the case if the settlor is a registered organization of course. But any name that isn't that of an individual needs to go in the organization name field. Again, you can take the belt-and-suspenders approach if there's a difference between an organization name and an individual debtor. It just removes all doubt. It gives the filer a little bit of peace of mind.

Now there are some common errors that are made in the name of the settlor. For example, one of them is indicating the capacity of the party as the settlor, because indications of capacity are not part of a debtor name and should not be provided in the debtor name field, because a search of CIBC INC. is not going to find CIBC Inc. as settlor. Actually, it won't find it in this case anyway, because of all the additional stuff added to the end to clarify what trust this is. We'll get to distinguishing information in a minute.

So here we have the indication of capacity. That should never be part of a debtor name unless it is part of the debtor name in the source document for the debtor name. And including that descriptive information will prevent it from showing up on a search, and the string of text will not be that of the name of the debtor.

Here we have much the same type of situation. We have an individual settlor name provided in the organization name field. There was not a corresponding name in the individual name field either. They have also included an indication of capacity and more information about the trust agreement and the date. All of this extra information should have been omitted. It is not part of the name of the debtor typically and will just render it seriously misleading and not effective. It should be provided in a different part of the financing statement.

Now, here somebody has provided the name of the trustee, and they've also provided the name of the trust in the individual name fields. They've provided both the middle name and last name in the middle name field or the middle initial and last name. Again, all this extra information in the name will prevent it from showing up even if the right person to search was Elizabeth Stepanian.

So how does one avoid trust-related name errors? Number one, don't add ever anything to a debtor name. Any additional information that needs to be provided must be provided in a separate part of the financing statement. Don't provide the name of the trustee, or at least indicate that the trustee may be the party that has to be listed if they're also the settlor of an unnamed trust. But don't include the indication of capacity that they're in there as trustee or as settlor. So never indicate capacity in the name unless it's part of the name in the source document.

And this is a trap. Do not invent a name for the trust if a name isn't specified. There may not be a name for the trust. If a name isn't clearly specified . . . if there is a name that might be specified, yeah, go ahead and provide that as an additional debtor, but go ahead then and also provide the name of the settlor. Do not invent a name for the trust where none is specified in the organic record, at least without also providing alternative names of the settlor or other names that might be required under Article 9.

Now I mentioned that, when providing the name of the settlor or testator, there's additional information required to distinguish the trust involved, or that holds the collateral, from one or more other trusts with the same settlor or settlors. Now this distinguishing information must be provided in a separate part of the financing statement. Do not provide it in the debtor name. It must be in a separate part of the financing statement.

So how does one identify the trust to distinguish it? Well, best practice is to do what many people have done in the debtor name fields, just do it in a different part of the financing statement. Identify the specific trust, maybe citing the agreement and the date, a little bit of explanation for what the relation to the debtor name that's provided is, and then provide it on the financing statement somewhere other than in the debtor name field. So remember do not provide it as part of the debtor name. That distinguishing information is not part of the debtor name. It must be in a separate part of the financing statement, and that's part of the statutory requirement.

So how to provide it? One option is to use the Addendum. Item 17 of the Addendum form can be used for this purpose. It's called the miscellaneous field, and here you can explain the information to distinguish it from other trusts.

But there are a couple other options and probably more. Another common option that's used is to provide it in the collateral field, either on the financing statement or on the addendum, and that can look something like this, where all assets of the debtor and then explain how the debtor name is provided and maybe provide additional information about the trustee if it wasn't already provided in full in the debtor fields.

You can you can provide additional information in the debtor address field. We'll come back to that in a minute.

And then, finally, another option is to include an exhibit that's referenced in the collateral field, such as Exhibit A. Here they can provide the whole background of the debtor, the names of the trustees, the history of the trustees, the name of the trust, dates, and things like that. That can all be done as an exhibit. Just don't provide it in the name of the debtor. Have it in a separate part of the financing statement. All of this information is very helpful to have, but not in the debtor name.

The financing statement must also indicate that the collateral is held in a trust. That indication is required regardless of the type of name that's provided. The easiest way to do it is to use a check box, but it can be included in the additional information used to distinguish from other trusts. It is not made in the debtor name field. It specifically says in a separate part of the financing statement. So technically, even if the name says the ABC Trust, that's not a sufficient indication. It needs to be made in a separate part of the financing statement. So you can't make it in the debtor name. Best practice, always use the check box in Item 5 of the UCC1 form or its electronic equivalent, and there's a nice handy check box there to indicate that the collateral is held in a trust.

The financing statement must provide a mailing address for the debtor. The mailing address, just in general financing statements must provide a mailing address for the debtor. But Article 9 is very lenient on what can be provided. There is no single mailing address. It can be any one of several mailing addresses for the debtor. There is no specified format for the address. It can be a street address. It can be a P.O. Box. So there's different ways to provide an address, but it has to be a mailing address for the debtor. So if there is no address on there, by the way, it doesn't render the financing statement seriously misleading. It's only there to avoid rejection under Article 9.

So when it comes to a trust-related address, the mailing address is going to be for the debtor, not for the debtor name. In other words, it's a mailing address for the debtor. If the debtor is the trustee, it should be the trustee's mailing address. If the debtor is the trust under applicable state law, it should be the trust's mailing address. So bottom line, it should be a mailing address where the debtor can be reached. So if it's the trust, it's the address of the trust. If the debtor is the trustee, it's the address of the trustee or trustees, there may be multiple trustees and it may be necessary to have multiple mailing addresses on there, which can be added using an exhibit or possibly added in the collateral.

The address may include distinguishing information in most states. There are some filing offices that may reject if it's not purely in a U.S. Postal Service format. But generally you can put information in there, such as a care of in the mailing address street, and here we have c/o of John O. Shirk, Trustee, indicating capacity. These are all perfectly fine in the mailing address in most jurisdictions.

Now it's important to make sure that these are filed in the correct location. Location is going to depend on the governing law, and that's going to depend on the location of the debtor. So it's necessary to begin by looking at the law that's going to govern perfection and priority of the particular transaction, and that's going to be the law of the debtor's location, unless it's fixtures, timber, or minerals.

If the trust is a registered organization, it's going to be where it was formed or organized. That's where the law will govern perfection and priority. If the trust is not a registered organization, then the location is going to depend on the nature of the trust. Is the trust the debtor, or is the trustee the debtor? So that's going to depend on the applicable state law.

If the trust is the debtor, determine the trust's place of business. Does it have a physical place of business where it carries on its affairs, or does it have more than one place of business, in which case it would be its chief executive office for the trust?

If the trustee is the debtor, then it would be the location of the trustee. So if the trustee is a registered organization, then generally it's going to be the state of organization. If the trustee is an individual, it typically would be the location of the individual's principal residence.

For any other type of organization trustee, it would generally be their place of business, or if they have more than one place of business, the chief executive office.

Within the state where the debtor is located, it's necessary to look at Section 9-501 to determine where to file. The general rule, once you've located or once you've determined the location of the trust or the trustee, you file in the central filing office of the state where the trust or trustee is located, unless it's fixtures, timber, or minerals.

Now one thing I want to point out here. It is possible to have trustees of the debtor that are located in multiple jurisdictions, and in that case it may be necessary to file in more than one jurisdiction just to be safe. Likewise, if it's questionable under applicable state law whether the debtor is a trust or a trustee, file everywhere. Just be on the safe side. There's no harm in doing that.