Hold aircraft in Family Trust

DesertNomad

DesertNomad

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DesertNomad
My wife and I have a family trust that was drafted by a lawyer who is now deceased.

I'd like to put our airplane into the trust (or perhaps its own specific trust) so that I can pass it on to a younger friend of mine (also a US citizen) without undue hassle and cost (and hopefully avoid probate), when I die.

It seems like the FAA needs to see a copy of the entire trust. Yikes! I am not too keen on doing that, so perhaps a separate trust just for the plane is better. It seems the FAA will not retitle it into the name of the trust, but just to me "as trustee". In that case, how does someone else become the trustee if I am no longer around?

How can I do this without paying sales tax upon the transfer to a trust?

How does this affect insurance?

How does this affect flying outside of the US?

Does the FAA have any sort of deed-on-death like many states do?

It seems I need to have a lease agreement with the trust to avoid being a 135 operation.

Surely other people here have dealt with this.

I am in Nevada. Can someone suggest an estate attorney who is well versed in aviation and the FAA?
 
The executor of your estate will handle the transfer, with possible assistance from your lawyer.
Who’s the executor, probably help if you included instructions or they are aviation savvy.
I think you are getting confused between a LLC and a trust (or I am). I think a lawyer can handle most of the ?s even if not aviation specific. I would pay the price of legal assistance from AOPA and use the to bridge the gap.
 
I do have the AOPA Legal plan. A trust just seems simpler than an LLC. I already have a trust buts since the FAA requires that I send them a full copy, creating a new separate trust for the plane might be better.
 
FORANE said:
Can't in my state. Check with Nevada and see what they say.
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I might be confused, are LLCs and trusts treated the same? I vaguely remember one was transparent for tax purposes.
 
DesertNomad said:
I do have the AOPA Legal plan. A trust just seems simpler than an LLC. I already have a trust buts since the FAA requires that I send them a full copy, creating a new separate trust for the plane might be better.
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Then I would call them first. A trust and LLC are 2 different legal entities use for different purposes. LLC is for liability protection.
Separate trust might be a good idea, especially if you have a complicated family (divorced, step children...).
 
DesertNomad said:
I'd like to put our airplane into the trust (or perhaps its own specific trust) so that I can pass it on to a younger friend of mine (also a US citizen) without undue hassle and cost (and hopefully avoid probate), when I die.
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FYI: moving aircraft ownership around can cause tax implications while the owner still lives. Below is general guidance on registering an aircraft from different sources. However a very simple method is to fill out a 8050-2 today and sign it just as the ownership is today then put that copy in a very safe place for its use in the future. Transferring an aircraft after death will follow one of the options in the link. And it's best to keep it simple as possible.
https://www.faa.gov/licenses_certificates/aircraft_certification/aircraft_registry/media/8050-94.pdf
 
i just took my dads airplane out of the family trust and into my name a few months ago, the person at the FAA told me what sections of the trust they needed. they don't need the whole document, you just need to get the right person on the phone.
 
unsafervguy said:
i just took my dads airplane out of the family trust and into my name a few months ago, the person at the FAA told me what sections of the trust they needed. they don't need the whole document, you just need to get the right person on the phone.
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Thanks. I might try calling them this week. If you have a contact there, can you PM me?

I just think it would be easier if the airplane were in a trust to handle passing in onto a non-family heir (nobody else in my family flies).
 
DesertNomad said:
Thanks. I might try calling them this week. If you have a contact there, can you PM me?

I just think it would be easier if the airplane were in a trust to handle passing in onto a non-family heir (nobody else in my family flies).
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And here I thought we were one happy POA family. Slighted dear sir, slighted I duh declair! :D
 
Nearly everything titled to the trust is done with regard to the trustee. The FAA aircraft registry is rightfully picky, but they are helpful. Believe me, the airplane isn't the only place I've had to send trust copies to. I keep a scanned copy of the trust document because it's been needed to buy/sell property in the trust before.
 
DesertNomad said:
Thanks. I might try calling them this week. If you have a contact there, can you PM me?

I just think it would be easier if the airplane were in a trust to handle passing in onto a non-family heir (nobody else in my family flies).
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Always thought friends were just there to call me when they needed to move. My friends are not like you sir. Let me know if you ever need a hand moving.
 
Wouldn't it just be simpler to put in your will that it goes to your selected beneficiary? Unless you're a high, high net worth individual, you're likely to stay clear of taxes on the estate, and if you have a responsible executor, s/he can move the process pretty quickly and transfer the targeted assets to the intended recipients while paying estate bills out of the (presumed) cash remaining in the estate. Right now, you won't pay estate tax unless the estate is >$11.6 million. That figure will only increase until 2025. If the laws change then, change your will or look into other alternatives.

If you want to do something unusual, you need to bring in a trust/estate/tax lawyer to walk you through it. Otherwise, it can turn into a pooch screw.
 
Thanks for the question. I’m not anywhere close to owning a plane but it is on my bucket list. We just updated our trust so maybe when I’m ready to buy we’ll immediately title it to the trust.
 
I am trying to avoid probate which in Nevada says it can take 120 to 180 days. That's a long time for the plane to sit dormant in the hangar while paperwork moves around. I don't think the plane with me as the registered owner can be operated more than 30 days after my demise.
 
bbchien said:
Don't use the family trust. It allows plaintiffs right into your assets!
Separate structure, please!!!!
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I think it would be a separate "aviation" trust just for the airplane with everything else in the normal family trust. I don't know any aviation-savvy estate lawyers here.

Frankly, I think it is asinine that if you die, one thing happens, but if you die having signed a piece of paper, something entirely different happens when there is no material difference in reality. Too many laws, too many lawyers, too much bureaucracy.
 
bbchien said:
Don't use the family trust. It allows plaintiffs right into your assets!
Separate structure, please!!!!
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This. The estate lawyer I worked with was very clear: keep vehicles and other things with potential liability out of the family trust.
 
wsuffa said:
This. The estate lawyer I worked with was very clear: keep vehicles and other things with potential liability out of the family trust.
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If the plane was in its own trust with nothing else, I can't see how that would be a problem.
 
Separate trust for the aircraft.

FAA and other legal entities who want a copy of any trust just get the opening pages, defining the nature and purpose of the trust, and names of trustee's. The contents of the trust are confidential.

Make the recipient of the aircraft the replacement for you at your death, so he can keep it in the trust if he wishes.

Put in a provision that if he pre deceases you, the trust reverts to your family, with the same trustee structure as your other trust, but still a separate trust.

Taxes, I know nothing about for your situation.
 
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