estate planning and airplane assets

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4RNB

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4RNB
We went to a lecture and will be meeting with some kind of a lawyer soon for some estate planning.

My understanding is that absent having a trust, a titled asset (I assume this means things like my airplane) must go through probate.

As we work on things, what are the concerns regarding airplane registrations and estates that we need to be aware of?
Should I also register the plane in my wife's name? Can it be set up TOD/POD?
Or, does none of this matter if we get the right trust structure and a proper will?
 
How good is the heir at forging your signature? “Hey look, luckily the deceased signed it over the day before the event!”
 
Put plane in a LLC and have set up to transfer LLC to heirs? WAG
 
It was explained to me that an airplane is considered tangible personal property basically a physical asset you can touch and if you own it in your own name when you pass away, it generally has to go through probate before your heirs can legally take ownership - think time, money, effort, and bad energy. By placing the airplane into a trust, the trust becomes the owner of the aircraft and you being the trustee can still manage, use, sell, or change them just as before.

A co-ownership is also another route.. or an LLC...
 
Agree.
Ventucky Red said:
It was explained to me that an airplane is considered tangible personal property basically a physical asset you can touch and if you own it in your own name when you pass away, it generally has to go through probate before your heirs can legally take ownership - think time, money, effort, and bad energy. By placing the airplane into a trust, the trust becomes the owner of the aircraft and you being the trustee can still manage, use, sell, or change them just as before.

A co-ownership is also another route.. or an LLC...
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Agree. We just went through this last year. All tangible property including the airplane is now in our family trust with both myself and wife as trustees. On our death it all passes without probate to each of our two children’s Heritage Trusts, as co-owners, 50/50.
 
4RNB said:
Or, does none of this matter if we get the right trust structure and a proper will?
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The FAA issue is only with the chain of ownership in order to handle any registration changes. Either research those requirements on the FAA Registration website, or call them. Use the local number vs the 1-800 for better service. I prefer to talk with them as too many variable at play in general.
 
Rcmutz said:
Agree. We just went through this last year. All tangible property including the airplane is now in our family trust with both myself and wife as trustees. On our death it all passes without probate to each of our two children’s Heritage Trusts, as co-owners, 50/50.
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We have a trust. All property can be accessed by a surviving trustee and if we both are gone, the ownership of all the assets pass equally to our children with no need for probate.
 
bonefishpete said:
Put plane in a LLC and have set up to transfer LLC to heirs? WAG
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Same issues. If the LLC membership is in your name, the interests need to be transferred in some way.

@4RNB, that's why you're sitting down with a lawyer; to decide on the best mechanism in your state and that is compatible with the overall goals of your estate plan. The two most common ways to avoid probate (assuming that's the goal) are probably trust ownership and joint ownership with right of survivorship specifically stated.
 
Can you as a LSRI holder sign off the condition inspection on a rv-10 owned by a LLC or trust? Or, does that require a LSRM? Does your state consider title transfer to LLC or trust a taxable event triggering sales tax due?
 
FORANE said:
Can you as a LSRI holder sign off the condition inspection on a rv-10 owned by a LLC or trust? Or, does that require a LSRM? Does your state consider title transfer to LLC or trust a taxable event triggering sales tax due?
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I don't know.
I have LSRM.
 
IMHO , if you don’t have creditors coming after you or challenges to your will, probate is not going to be a big deal. On the other hand if you’re trying to protect your assets from a family feud or keep your assets from being sold off to pay your debts, don’t rely on a “kit” purchased from some online paralegal service, go get a proper estate lawyer to set it up and bring your checkbook.

I went through this with the in-laws. They spent a lot of money for nothing. They had a very simple estate and no real debt.
 
I mentioned this in a similar thread, and everyone has their own risk tolerance, etc., but for me (airplane in an LLC), I have a signed bill of sale, in blank, sitting in a box at my house that my wife will quietly give to one of my airplane friends should something happen to me. They'll just fill in their name, the date, record it, and then dispose of the plane in the ordinary course and pass the sale proceeds to here.

Strictly legal/proper under the probate code and estate laws? Probably (definitely?) not. But, I'm a lawyer (not your lawyer) and I made my own risk analysis.
 
Gilbert Buettner said:
We have a trust. All property can be accessed by a surviving trustee and if we both are gone, the ownership of all the assets pass equally to our children with no need for probate.
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This is what we have as well. The aircraft is registered to trustees, and is shown in the FAA database as name, trustee. This is the best way to estate plane for aircraft.

Aerospace reports will handle the paperwork side of getting the plane(s) into a trust.
 
I've gone through 4 probates here in Georgia over the last 10 years as an executor or administrator. As I recall, it is a 30 (maybe 60?) day process to officially go into your term as executor or administrator. You can negotiate deals prior to the official designation, it just means if you aren't appointed, you won't be able to go through with the deal. But if you're named as exectutor in the will, unless you're @Eman, you'll be swept into office with no issues. And if you've negotiated the deals, you can move the assets as soon as you're appointed. Probate isn't a monster, it is just a process. The biggest challenge (IMO) is records retention and making sure everyone (including lien holders or potential lien holders) gets paid.
 
Not a lawyer, but I do think a lot of people get pushed into setting up trusts to avoid probate when they are unlikely to go into probate with a decent will and estate planning. Even if you go into probate as @kyleb said, it's not the end of the world if you've done some planning and have worked in advance with your executor.

As an aside, you'll be dead, so not your problem :).
 
Hang 4 said:
As an aside, you'll be dead, so not your problem :).
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I know this was said as a joke, but please please set up your estates, especially with aviation assets. And have your spouses on the airplane registration.

A big part of why we bought our second plane (a 170) was because the previous owner left his spouse a basket case. He passed away after owning the plane since 1967. He couldn't bear to sell it even after not flying it for half a decade due to declining health. After he passed his spouse was completely distraught and unaware of all the legal processes needed to transfer the plane to her so she could sell it. We bought it partially out of mercy, as if we didnt buy it and guide her through the process the open market would have been hell.

So TLDR dont leave your spouse with your burden after you're gone.
 
Gilbert Buettner said:
We have a trust. All property can be accessed by a surviving trustee and if we both are gone, the ownership of all the assets pass equally to our children with no need for probate.
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We created each of our two daughters trust with each of their children getting equal shares of their mothers trust. This is so, the fathers don’t get the proceeds, in case of divorce etc. now once we are gone, our daughters can do what they want with their trusts, dissolve, change, etc. Our estate attorney described this as a Bloodline Trust.
 
What happens to the remaining airplanes all depends on which airplane kills me.
 
Hang 4 said:
Not a lawyer, but I do think a lot of people get pushed into setting up trusts to avoid probate when they are unlikely to go into probate with a decent will and estate planning.
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Personally, I think a lot of people erroneously think that a decent will makes probate unlikely. A working definition of "probate": a court-supervised legal process of paying the deceased's enforceable debts and distributing the remaining assets to heirs in accordance with the deceased's will if they had one and in accordance with state intestacy laws if they didn't.

Decent estate planning can avoid probate, but that typically involves joint ownership with survivorship and transfers of beneficial interests (including trusts).
 
midlifeflyer said:
Personally, I think a lot of people erroneously think that a decent will makes probate unlikely. A working definition of "probate": a court-supervised legal process of paying the deceased's enforceable debts and distributing the remaining assets to heirs in accordance with the deceased's will if they had one and in accordance with state intestacy laws if they didn't.
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My wife, along with her brother and cousins, were willed a house when her uncle passed away. It still had to go through probate, and between the time frame of that and the ultimate lack of value of the house, they opted not to inherit it.
 
MauleSkinner said:
My wife, along with her brother and cousins, were willed a house when her uncle passed away. It still had to go through probate, and between the time frame of that and the ultimate lack of value of the house, they opted not to inherit it.
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Yeah. It varies by state, but there’s usually going to be a time for creditors to make claims. That means an initial period to give public notice - those back “legal notice” pages in newspapers and, in many states, through an online depository and a special statute of limitations. That’s why so many try to use non-probate mechanisms.
 
Hang 4 said:
Not a lawyer, but I do think a lot of people get pushed into setting up trusts to avoid probate when they are unlikely to go into probate with a decent will and estate planning. Even if you go into probate as @kyleb said, it's not the end of the world if you've done some planning and have worked in advance with your executor.

As an aside, you'll be dead, so not your problem :).
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Trusts are how wealthy people get poor people to pay for their nursing home care while leaving their estate to their children tax free.
 
midlifeflyer said:
Yeah. It varies by state, but there’s usually going to be a time for creditors to make claims. That means an initial period to give public notice - those back “legal notice” pages in newspapers and, in many states, through an online depository and a special statute of limitations. That’s why so many try to use non-probate mechanisms.
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Here, its a 4 week notice in the paper. The creditors have 60 or 90 days (IIRC) to make their claims. So it isn't a long wait. I've always viewed trusts and the like as a great way to give trust and estate attorneys even more of my measely estate (or worse, to give them more money up front). If I was truly a high net worth individual, I might look at it differently, but my experience with one of the estates where I was executor pointed me towards the camp of "Simplicity is cheaper" rather than "Write a monster will and trust that requires an entire floor of the law office to unravel".
 
You’re doing the right thing by meeting with an estate planning lawyer in your jurisdiction to make your estate plan. Bring in a copy of your aircraft registration and maybe the blank form to transfer registration (can’t recall form name or number offhand tonight). If you explain that aircraft are like cars except registered with the federal government instead of the state and show how it’s done, that should be enough to get an estate planning lawyer who has never dealt with aircraft pointed in the right direction to handle your needs.
 
4RNB said:
We went to a lecture and will be meeting with some kind of a lawyer soon for some estate planning.
Click to expand...
So basically they were trying to sell you on something. If you're worried about it, which you really don't need to be unless there are big $$$$$$ involved and inheritance taxes are something you want to plan for. If so, ask around and find a good Estate Attorney and go talk to them (vs. someone coming after you).

From what I know, there is nothing wrong with having a Trust if you want, but the bigger issue is just having everything in order. Trust or Will, just make sure it exists and was executed in accordance with the laws of the state you live in (I guess there are some subtle differences). Also, don't put it in YOUR safety deposit box. If you die, the bank is not supposed to open the box until the Executor gives them the papers to show they are the Executor... which they can't go go court if they don't have the Will be show they are named. (Though I know of a few banks that knew the family and have gone in and pulled out the Will, but you never know.)

And no I am not an Attorney, just have seen it first hand with various parts of the family and with friends.
 
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Hmmm… as I recall you’re younger than me, so I don’t really see an issue. However, just in case, there are 2 “ohs” in Tools. Just sayin….
 
iamtheari said:
You’re doing the right thing by meeting with an estate planning lawyer in your jurisdiction to make your estate plan. Bring in a copy of your aircraft registration and maybe the blank form to transfer registration (can’t recall form name or number offhand tonight). If you explain that aircraft are like cars except registered with the federal government instead of the state and show how it’s done, that should be enough to get an estate planning lawyer who has never dealt with aircraft pointed in the right direction to handle your needs.
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This is one of those areas where the estate planning attorney who is not aviation savvy may want to consult with a lawyer who is. There are traps in the registration process and it's not always about DIY errors. The single worst aircraft registration mess I had to untie was one that was being handled by an estate lawyer. This was under the old system where registration applications were for a shorter period but could be renewed up to a certain point. This one was already past that point - officially an unregistered aircraft - when I was called in. Working together, we fixed it very quickly.
 
midlifeflyer said:
This is one of those areas where the estate planning attorney who is not aviation savvy may want to consult with a lawyer who is. There are traps in the registration process and it's not always about DIY errors. The single worst aircraft registration mess I had to untie was one that was being handled by an estate lawyer. This was under the old system where registration applications were for a shorter period but could be renewed up to a certain point. This one was already past that point - officially an unregistered aircraft - when I was called in. Working together, we fixed it very quickly.
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I'm just curious, is it really an issue? I've heard the FAA just wants proof of the ownership path and that's all they care about. Planes, cars, boats, houses, you name it, are all frequently transferred or sold through and Estate. It's not rocket science. Though regretfully some Attorneys look at it as a cash cow, while others process everything as quickly as possible for the family.
 
M20K said:
I'm just curious, is it really an issue? I've heard the FAA just wants proof of the ownership path and that's all they care about. Planes, cars, boats, houses, you name it, are all frequently transferred or sold through and Estate. It's not rocket science. Though regretfully some Attorneys look at it as a cash cow, while others process everything as quickly as possible for the family.
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There was a bit more going on in that one. But the Registry is also looking at chain of ownership and authority to sign if the seller isn’t exactly the same as the current registrant. Most of the kickbacks we see in DIY registrations fall into the latter category.

The estate lawyer in mine needed help in satisfying the FAA on That issue.
 
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