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maggot

Filing Flight Plan
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maggot
I am considering buying an airplane with a partner. My potential partner tells me his wife is learning to fly also. We have not yet talked about any implications regarding this. I was thinking, should they be buying two shares and me one ? Just a thought. Has anyone else had any experience with a situation like this ? Any thoughts will be helpful. Thanks
 
Would she train in it and fly solo? Or just be there as his backup? I see an argument for 1 or 2 shares.
 
maggot said:
I am considering buying an airplane with a partner. My potential partner tells me his wife is learning to fly also. We have not yet talked about any implications regarding this. I was thinking, should they be buying two shares and me one ? Just a thought. Has anyone else had any experience with a situation like this ? Any thoughts will be helpful. Thanks
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I don't have an answer for you, but we struggled with the same issue. On one hand, since we would almost always be flying together, our usage would be in line with a single pilot. On the other hand, we would both need to maintain proficiency, so there would be some additional usage. Insurance is usually predicated upon the number of members, so we'd have a disproportionate effect there. Two pilot operations have the ability to be safer, so that could help the incident rate, if not the insurance.

One thing different in your situation is that the spouse would be a primary student pilot, whereas my wife and I are both instrument rated.

In short, I think it's reasonable to expect him to have more than a single share, but less than two shares. Maybe 30-50% more? Of course, during her training, she'll be using it disproportionately.

A surcharge for excess insurance until his wife has stopped affecting the insurance rates as much as she will as a student might also be appropriate, but that should be an add-on, not part of the main agreement. You could run a few scenarios by the insurance company to figure out appropriate amounts for that.
 
I really can't think of a way to rationalize having two pilots buy fewer than two shares, regardless of whether they are married, or not.
 
Nothing discussed about it yet. I would guess her training would continue in a trainer, and further experience gained in trainer as well. We are considering a lance. In the end though, she would be another pilot with access. I realize the partnership can be agreed apon any way we choose. looking for input before thE subject is breached, if or when it is.
 
SCCutler said:
I really can't think of a way to rationalize having two pilots buy fewer than two shares, regardless of whether they are married, or not.
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If my wife never flew the plane, stayed current in a rental 172, I'd be reluctant to pay 2/3s of everything. Least this seem far fetched, I know 2 couples in a similar boat. In one case the wife hasn't been current for awhile.
 
If I'm understanding you correctly, you're asking whether your prospective partner's wife needs to buy into whatever arrangement you're going to have (partnership, LLC, etc.). There are all kinds of possibilities, it all depends on what you want.

Whatever you do, you need to make absolutely sure you have this clearly spelled out before getting into anything. There are a ton of possibilities - you just need to make sure that everyone understands exactly what is going to happen, and that's in writing, before you sign the dotted line.

Legally speaking, this is a fairly easy situation to address, you just need to make sure that initial members/partners are clear on how the wife gets in.

Good luck!
 
ejensen said:
If my wife never flew the plane, stayed current in a rental 172, I'd be reluctant to pay 2/3s of everything. Least this seem far fetched, I know 2 couples in a similar boat. In one case the wife hasn't been current for awhile.
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For sure. I wouldn't like that, either.

But, say that you and I were partners in a plane, and my wife got her certificate, and I'd just let her use it whenever she wanted to go for spin (which is entirely possible, maybe even likely). Would you think it appropriate that you and I continued to split everything 50/50? What about things like insurance coverage?
 
Do you want them to be able to vote you down ?

1 share
 
It comes down to two questions.
Do you want to own 1/2 or 1/3 ?
Do you want to pay half the bills, or 1/3rd of the bills?

when she gets her Certificate, she'll make him move up any way.
 
Well, God says that they only get one share:
King James Bible Genesis 2:24
"Therefore shall a man leave his father and his mother, and shall cleave unto his wife: and they shall be one flesh."

:)

The point about voting rights is something to consider. If they have two shares, you would need two additional partners in order to have a majority. If they have less than two, be it 1.5 or 1, then you would only need one other partner to agree with you to have a majority. I'm presuming, of course, that they would vote the same way, which may not be true.
 
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Another significant question with a Student Pilot will be what it will do to the insurance rates... when I joined our LLC we had a discussion with the insurance company and I needed 3 more hours or so in-type to avoid a significant rate hike to the LLC. I did the math and had offered to simply pay the difference for a year, but decided in the end that renting for a few hours was significantly easier and about the same price. If I had been a Student, and low-time overall, the price hit would have been even more significant.
 
Each insured pilot should have a share of the plane to keep it equitable.

Weike makes a good point about being out-voted, and I would take that into consideration. However, if you get good partners, this shouldn't be much of an issue. I had a non-equity partnership of sorts when I rented the Mooney I used to fly. Three out of the four people on the insurance were family, I was the fourth. I never had a problem when I made a request, they were very reasonable.

Any pilot who I'd be willing to get into a partnership with would have to be very reasonable. From there, it's easy.
 
maggot said:
Nothing discussed about it yet. I would guess her training would continue in a trainer, and further experience gained in trainer as well. We are considering a lance. In the end though, she would be another pilot with access. I realize the partnership can be agreed apon any way we choose. looking for input before thE subject is breached, if or when it is.
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Why would someone rent a POS whatever if they already own 1/2 - 1/3 of a Lance? That doesn't make sense to me.

I assume that the excess insurance costs due to low time would be approtioned to her.

Equity / other fixed costs? One could argue either way.

I assume you are charging yourselves sufficent hourly rates to cover operating / maintainance costs so the fact that she may be flying it more would be an issue only with regards to access to the aircraft during peak demand. The more she flys, the faster you build the overhaul reserve that you will never use and just divide up when you sell. :wink2:
 
Two shares, 51% & 49% (somebody needs the authority to end disputes). Split costs equally on hangar and fixed annual cost. Pro-rated shares based on logged use for any and all maintenance expenses and insurance.
 
Again, this is why you need to make sure you've discussed all of this up front.

Obviously, you've got some concerns along these lines, or you wouldn't have asked the question. You don't want to leave those concerns unaddressed, only to get a year in, have the husband/wife want the wife to get in on the deal, and find yourself in some kind of boondoggle (I've always wanted to write that word).

A word of practical advice: is the marriage stable? I can't think of much worse than being dragged into a divorce courtesy of being business partners with husband/wife shareholders (and this applies even if the wife ends up with no interest in the airplane). Far-fetched? Well, I've seen a business entity get dragged to the state Supreme Court because one of the partners or members (I think it was an LLC) was in a nasty divorce, and his interest in the LLC got tied up in the litigation - and the business and other partners damn near ended up with the short end of the stick, on top of the legal fees.

So, for your own mental health, not to mention your wallet, keep that in the back of your mind.

Sorry to be a Negative Nellie, but your initial post just gave me an inkling that there might be some latent issues.
 
Two shares or walk. In the case of a divorce or something, someone's shares can be bought out. The rules can always specify that outlays of money require unanimity.
 
Two kinds of pard's you never want, one that can out spend you and one that can't.
 
the best partnership you can find, a AME Dr. a Lawyer, and a A&P-IA
 
Obi Heed Kenobi said:
For sure. I wouldn't like that, either.

But, say that you and I were partners in a plane, and my wife got her certificate, and I'd just let her use it whenever she wanted to go for spin (which is entirely possible, maybe even likely). Would you think it appropriate that you and I continued to split everything 50/50? What about things like insurance coverage?
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That's what I was trying to say, wife is student and then has open solo rights. Of course three shares or whatever you work out. But the couple of spouse pilots I know never want to fly the partnership plane unless hubby keels over. They are happy in the right seat. If my wife learned to fly I would hope for more interest. But one reason we've never had a partner is to avoid these type of discussion/decisions.
 
We have an LLC with a membership that changes. We allow other pilots (non-equity, non-voting) to become members for various reasons. We allow them to fly but they pay for their time/depletion (of assets) and they pay a fee for insurance. We name them on our policy unless they have qualifications for open pilot. They have no say in management nor would they get the benefit from the sale of assets.

Regular members have an equity stake in the assets and we vote on all major issues. The non voting members are at our pleasure and the equity membership can revoked the the non-equity membership at any time for any reason.

Allowing the wife or anyone for that matter to fly the plane can be handled with some careful thought. IMHO you don't have to offer equity or any management control in order for her to have use of the airplane until you decide it is time to stop.

You do have a problem with only having two voters from a management standpoint. One should be a manager that makes a final decision if tied...or do what we do and agree to draw straws for tie votes. Everyone is never completely happy, all partnerships generally go. But we are all adults.
 
Seriously, just one share.
You don't want to be outvoted.
Merely arrange to split the fixed expenses, and everyone pays the variable expenses by usage. It works nicely.
 
I'd be concerned about having less of a voice - 2 against 1. There's an argument for even-steven shares... but maybe have them chip in more when appropriate?
 
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