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re-titling a plane into a trust

Bill Boyd

Well Known Member
I'm having a revocable living trust drawn up for estate planning purposes. I don't want to make the rookie mistake of forgetting to fund the trust by not putting relevant property into it.

I'm looking for any info on how to do this with the RV and what others have gone through to get it accomplished. Surely I'm not the first.

Something tells me the DMV is going to be a walk in the park compared to Oklahoma City...
 
See if one of the OK City expeditors are experienced at this. I used Dixie Air for my Canada to US deal and was VERY happy I spent that money.

Owe you a heater, BTW. I'll contact you via PM soon.
 
Trust

I did mine last year. Took the FAA almost a year to change the registration. I did my trust through an attorney so they gave me the forms to fill out but it was quite a few. You can check online to get the list. As I recall it requires a bill of sale, document stating that you or your heirs are not foreign, a COMPLETE copy of the trust, not just a certificate of trust, and your current registration, and an application. If you want to send me a PM with your e- mail, I will get the complete list from my Trust book.

Kevin
 
Don't Do It

Bill,
Once upon a time, I abandoned the notion of titling our 172 in our RLT. It would indeed have been a nightmare. First off the FAA would not accept a certificate of trust, they wanted the entire trust, all the text, which becomes a public record. Then, when the time comes, your successor trustee would have to prove their bona fides, another flurry of paperwork and delay.

Selling an airplane as individual owner is blessedly simple. Keep it that way. Your RV should "pour over" into the trust - check with your attorney. If you don't think your successor will sign your name as owner (nobody in the FAA is going to check), sign now an 8050-2 and tuck it safely away. Then shut up.

If for some reason your RV goes through probate, consider that the lessor evil of establishing a trust ownership.

John Siebold
 
My attorney just shrugged when I asked this question. The FAA document is just a registration, not a title/proof-of-ownership. I don’t know about your state but here airplanes are non-titled. She said I could change the FAA registration to the trust if I wanted but in this state where the trust is registered she thought it no more beneficial than naming any other specific property, and not at all worth the effort. At death, all my property is part of the trust anyway. Best to have a well-written will and make probate straightforward.

What did your attorney say?
 
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I'm having a revocable living trust drawn up for estate planning purposes. I don't want to make the rookie mistake of forgetting to fund the trust by not putting relevant property into it.

I'm looking for any info on how to do this with the RV and what others have gone through to get it accomplished. Surely I'm not the first.

Something tells me the DMV is going to be a walk in the park compared to Oklahoma City...

I suspect each Attorney has different opinions. However, our attorney indicated that the trust has a clause that sweeps any assets officially owned by the person named in the trust, like cars and boats, into the trust, without specifically being registered with the trust name. You have MANY possessions that do not have official registrations. All of these items are treated like possessions at death and are considered to be part of the trust, therefore no probate, and managed by the Trustee. May want to ask about that.

Larry
 
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I suspect each Attorney has different opinions. However, our attorney indicated that the trust has a clause that sweeps any assets officially owned by the person named in the trust, like cars and boats, into the trust, without specifically being registered with the trust name. All of these items are treated like household possessions at death and are considered to be part of the trust, therefore no probate, and managed by the Trustee. May want to ask about that.

Larry

Yes, the so-called "pour-over will". This state has pretty strict laws of property distribution, however, so probate is a bit on the perfunctory side. Rare that a probate judge has much to do, I'm told.
 
My plane was registered only in my name. My wife and I looked into putting the plane in our trust. As others pointed out, the FAA wants the entire Trust document, and in Tennessee, the "sale" required by the FAA would have triggered a taxable event.

I ended up doing an FAA Bill of Sale from "me" to "me and my wife", which did not result in any additional sales tax to TN, and the plane was re-registering in both our names.
 
I was going to put mine in a trust when I built it. After all the paper work to do it I decided to put it in a joint owership, which is almost like a trust. If I die first it is my wife's, I she goes first it is mine. Or you could title it with three people also, with first right of survivorship.
Just a thought
 
What is your goal - Estate planning, or Legal protection? For legal protection, a revocable trust will do little (no) good. A trust must be irrevocable to be untouchable. For estate planning a better option my be to make a provision in your Will that upon your death the airplane will transfer to a testamentary trust. This way, during your lifetime, there will be no issues doing what you wish with your airplane ownership. You will also not have to file a tax return for the trust every year. Intentions, goal, life plans all change.
 
I just received my new title this week after months of corresponding with our estate attorney and Oklahoma City. My first application to place the airplane in a revocable trust was denied, “you cannot title an aircraft to a revocable trust, only to the trustee”. So the plane is now titled to my wife and me as trustees.
Did I accomplish anything, only my heirs will know.
Our attorney is very insistent that any significant asset left outside the trust can require the entire estate to be placed under probate. My plan is to give away the airplane the day I hang up my headset for the last time, unless I reach TBO first!
 
i can't tell you about getting the aircraft into to trust, but I can tell you about getting it out. my father put his aircraft into the family trust. I know it was a pain to do. at his passing we put the aircraft in my name only. the trust part was not to bad, the lawyer handled that quickly. the FAA was a different game. they required a lot of paperwork, a certified death certificate, and a lot of back and forth letters. the big thing is, it took time. so to sell it would be problem because the buyer would not want to spend that time to get it done. the other thing that happened was the state wanted sales tax on it.that took more paperwork to show that it was just a paperwork transfer to simplify the sales that would be done at a latter date. i will say the lady that i worked with at the state was great to work with and was not out on a money hunt, she just needed to get the paperwork right.

bob burns
RV-4 N82RB
RIP PA28-151 N56831 now owned by hurricane ian
 
My wife and I changed the title of our plane to our revocable trust. I sent in the transfer of title and a copy of the whole trust. It was a non-issue! Title was changed in less than 60 days.
 
One gentlemen mentioned that his airplane was in joint ownership with his wife. Every asset my wife and I own is joint except for the two airplanes. They are in my name alone and that is for liability reasons. I can't buy liability insurance with a million smooth limit, the most I could by per passenger is $200,000.00. If I have an accident and a passenger is seriously injured or killed, $200,000.00 is not enough insurance. My estate would be liable for the remainder, but my estate consists of the airplanes and my clothes. If my wife is a part owner of the airplane, she could be held liable. Since she has NO interest in the airplane, she can have no liability. The downside is if I die owning the airplanes, a probate estate will have to be open in order to sell the airplanes. But I think that is a smaller risk and cost that my wife being a joint owner. So before making your wife a joint owner, think it through carefully. This is just food for thought on how to title your airplane.
 
...Every asset my wife and I own is joint except for the two airplanes...
...my estate consists of the airplanes and my clothes...
Does your estate not also include half of everything that you and your wife are joint owners of?
 
One gentlemen mentioned that his airplane was in joint ownership with his wife. Every asset my wife and I own is joint except for the two airplanes. They are in my name alone and that is for liability reasons. I can't buy liability insurance with a million smooth limit, the most I could by per passenger is $200,000.00. If I have an accident and a passenger is seriously injured or killed, $200,000.00 is not enough insurance. My estate would be liable for the remainder, but my estate consists of the airplanes and my clothes. If my wife is a part owner of the airplane, she could be held liable. Since she has NO interest in the airplane, she can have no liability. The downside is if I die owning the airplanes, a probate estate will have to be open in order to sell the airplanes. But I think that is a smaller risk and cost that my wife being a joint owner. So before making your wife a joint owner, think it through carefully. This is just food for thought on how to title your airplane.

Everything that my wife and I have acquired since marriage (40 years)...airplanes, horses, clothes, whatever...is marital property and jointly owned no matter who bought it, how it's registered, or how it's titled. She and I have separate trusts and we've kind of arbitrarily split our various assets between them. When I die, all our property goes into her trust and vice versa. If we both die at the same time, it goes into trust for a couple of remaining family members. The registration on my airplane is problematic, but has nothing to do with trusts or ownership and everything to do with the FAA. Right now, it's registered in my name. If I die before I sell it, my heir (whoever it is) will have to sell it and the new owner will have to re-register it. Ownership is not in question, although it is likely true that ownership will have to be demonstrated to the FAA by whatever heir is left to sign off on the bill or sale and FAA registration transfer. Potentially a bureaucratic hassle.

The simplest solution for me would be to add my wife to the FAA registration. In order to do that, I would have to "sell" the airplane to my wife and me (form 8050-2) and then register with the FAA it to me wife and me (form 8050-1). That only costs $5. My only question is whether or not I would have to pay state sales tax on this transfer. In this state, automobiles can be "gifted" to certain family members without incurring sales tax. I don't know yet if that applies to airplanes too. Email in to both my attorney and my accountant.

ETA... property inheritance succession laws can vary state to state
 
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Every asset my wife and I own is joint except for the two airplanes. .

I would talk to an attorney. If you are found liable for injuring a passenger, all of those joint assets are in play, I believe. Anything that it joint property is fair game, minus the home in most states. If you injure a passenger in the plane, you are the likely target of negligence, NOT the airplane itself. The fact that your wife doesn't own the planed doesn't change your liability as the pilot and her assets are your assets and there for the taking by a good attorney. A case against the owner of the plane is MUCH tougher (requires proving negligence in the care of the airplane) and why bother as her assets are your assets and therefore easy to get to regardless of whether she owns the plane or not.

Separating ownership of assets legally MAY help, but have my doubts on that also as many states have interesting rules on ownership inside of marriage and seems that most treat all assets to be joint without a pre-nuptial or similar; Just ask anyone going through a divorce how this works. No one cares who's name is on the deed, the house is split.

Not an attorney, so no professional advice here, just what I have learned along the way.

Larry
 
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OP here -

My goal was estate planning, not liability protection. Common mistake is to create a revocable living trust to avoid probate and then neglect to put assets into it before somebody dies.

I get (now) the distinction between a registration (FAA matter) and a title (State matter, not done for aircraft in my home state of Virginia). The comments about the difficulty of an heir not on the registration selling the RV after my (sole registrant) passing are noted and appreciated. This is not a minor asset in our estate by any means, at today's prices.

I've sent this thread link to my estate attorney, who is of course both interested and amused to see the results of gleaning pooled legal advice from the internet :p Thankfully he's a chill guy, always interested in learning new things, and has never handled an aircraft inheritance matter before now...

Appreciate everyone's thoughts.
 
My wife and I changed the title of our plane to our revocable trust. I sent in the transfer of title and a copy of the whole trust. It was a non-issue! Title was changed in less than 60 days.

Can you tell me quickly, if you recall, what you put on the BOS?

e.g.,
John Doe, Trustee
Doe Living Trust
Address, etc.?

Or just the name of the trust?

and similarly for the registration?

IOW, is the name and title of a trustee required, if you can recall?
 
Check State Taxes

Last year I added my wife to the registration of the RV. We did not add the plane into our trust for 2 reasons.
First, the FAA wants a copy of the full trust document (is it public at that point?), and second, the State of Tennessee considers the transfer to a Trust a taxable sale. Tennessee did not consider the sale from me to me+wife a taxable event.
 
Did you reach these conclusions in consultation with a lawyer? I would love to know how s/he structured your estate plan, pre-nup/post-nup, etc. to ensure the results you describe.

One gentlemen mentioned that his airplane was in joint ownership with his wife. Every asset my wife and I own is joint except for the two airplanes. They are in my name alone and that is for liability reasons. I can't buy liability insurance with a million smooth limit, the most I could by per passenger is $200,000.00. If I have an accident and a passenger is seriously injured or killed, $200,000.00 is not enough insurance. My estate would be liable for the remainder, but my estate consists of the airplanes and my clothes. If my wife is a part owner of the airplane, she could be held liable. Since she has NO interest in the airplane, she can have no liability. The downside is if I die owning the airplanes, a probate estate will have to be open in order to sell the airplanes. But I think that is a smaller risk and cost that my wife being a joint owner. So before making your wife a joint owner, think it through carefully. This is just food for thought on how to title your airplane.
 
Community vs Joint property

If you live in a community property state, you already have Right of Survivorship, making this a moot point with joint ownership between spouses. With a community property system such as in California, when the first spouse dies, the entire property automatically transfers to the survivor and the property does not need to go through the probate process in order to be transferred to the survivor.; this is a two edged sword though as it may also apply to both assets as well as liabilities depending on other structures in place, eg. a prenup or external will.
 
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If you live in a community property state, you already have Right of Survivorship, making this a moot point with joint ownership between spouses. With a community property system such as in California, when the first spouse dies, the entire property automatically transfers to the survivor and the property does not need to go through the probate process in order to be transferred to the survivor.; this is a two edged sword though as it may also apply to both assets as well as liabilities depending on other structures in place, eg. a prenup or external will.

IANAL, but I know enough to ask real ones for actual answers to legal questions.

Not EVERYTHING is automatically the surviving spouse's...e.g., what you brought in to the marriage as your sole and separate property, if you kept it that way, may not become community property. But as you note, a lot depends on things like pre-nuptial agreements, post-nuptial agreements, wills, *trusts* (which was the question I asked, although I think I figured out the answer elsewhere), and so forth.

As for registering the plane in one's name only and not the spouse...I'm pretty sure that'll make absolutely no difference to any lawyer worth their salt.
 
Not a lawyer, but will share some data. I had a friend die recently and helped his wife sell the RV. Plane was registered in his name only. I told her this would be an issue for the sale and she needed to deal with it. Not sure who she called (told her to call FAA), but she had a form signed and fully resolved in a couple of days. I believe Ill is a community property state. I believe there was a law passed in the last 10 years that make transferring registered or titled assets to widows A LOT easier (just present death certificate and sign a form). Unsure if these are US laws or ILL laws, but there is a name for it, as the spouse mentioned it but I quickly forgot it. I speculate that lawyers can make liability go in the opposite direction just as easily.

To the poster that stated that his estate represented the sum of the clothes and planes in his name, I strongly suggest more research! Also, if you die along with a passenger in your plane, it is not really about the planes owner. The juicy target is wrongfull death due to pilot negligence. This is wholly unrelated to who owns the plane, as they will be suing the pilot's estate. How easy or hard that is to do is unknown to me. I just know that if you kill a passenger, you don't want to be alive to deal with the legal ramifications. Not saying they won't also sue the airplane owner, but that is much harder. They usually go for those doing maintenance on the plane or the parts manufacturers. It is a lot harder to prove negligence on behalf of the owner, unless they have been doing their own maintenance or not following regs.
 
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To the poster that stated that his estate represented the sum of the clothes and planes in his name, I strongly suggest more research! Also, if you die along with a passenger in your plane, it is not really about the planes owner. The juicy target is wrongfull death due to pilot negligence. This is wholly unrelated to who owns the plane, as they will be suing the pilot's estate. How easy or hard that is to do is unknown to me. I just know that if you kill a passenger, you don't want to be alive to deal with the legal ramifications. Not saying they won't also sue the airplane owner, but that is much harder. They usually go for those doing maintenance on the plane or the parts manufacturers. It is a lot harder to prove negligence on behalf of the owner, unless they have been doing their own maintenance or not following regs.

I think his point was that there would not be much of an estate to sue. If he has his home and other valuable assets in a trust, those assets would be much harder to go after than if they’re just in his name.
 
I think his point was that there would not be much of an estate to sue. If he has his home and other valuable assets in a trust, those assets would be much harder to go after than if they’re just in his name.

Nah. Trusts are not to shield the assets from liability. They're to avoid *probate*. IANAL, but I know a few :).
 
I think his point was that there would not be much of an estate to sue. If he has his home and other valuable assets in a trust, those assets would be much harder to go after than if they’re just in his name.

You need to do more research as well. All but certain that statement is incorrect. I believe your statement applies to irrevocable trusts, but those are very rare for folks like you and I. We use revocable trusts to avoid probate and sometimes death taxes. They do NOTHING to shield liability. In most states, what belongs to the wife also belongs to the husband and vice versa, regardless of titles, registrations, etc. and free for the taking in civil judgments against either. In many states, the primary residence and 401K's cannot be taken in civil judgments. WHile pre nups and post nups do provide asset separation, I am not sure that applies beyond marital dissolution and in to liability. An attorney would need to answer that and likely varies state to state.

A revocable trust is just an instrument for managing and dispersing assets upon death with much greater control and protection than a will. An irrevocable trust is more like a long term gift or asset transfer.

Not providing definitive legal advice, just recommending that you do more research. This is a specialized field of law and cannot be summed up in a couple of paragraphs.
 
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Not providing definitive legal advice, just recommending that you do more research. This is a specialized field of law and cannot be summed up in a couple of paragraphs.

Indeed, well said.

I'll say it again...there are three areas where I go to experts (well, more, but at least these) and NOT the intertubes:

Legal
Financial
Medical

:)
 
Done. Actually fairly simple, although the first attempt resulted in a letter clarifying that both trustees had to be on the registration and BOS.

FAA did *not* require a copy of the complete trust, only the Certification of Trust (a form which includes the operative sections but omits personal financial info and the like).

Easy peasy.
 
If anyone is interested, here is a link to the FAA page that lists out the requirements for transactions involving a Trust. Interesting to note that one of the requirements is a COMPLete copy of the Trust. I completely believe prior posters saying they got by with a Certificate Of Trust because I’ve experienced the same inconsistency when dealing with other governmental agencies (the BATF) when items are owned by Trusts. Gotta love it.

IAAL, btw. 😜

 
Done. Actually fairly simple, although the first attempt resulted in a letter clarifying that both trustees had to be on the registration and BOS.

FAA did *not* require a copy of the complete trust, only the Certification of Trust (a form which includes the operative sections but omits personal financial info and the like).

Easy peasy.
This was our experience. BOS needed the full name ("my name & wife's name as trustees for ....") and only a Certification of Trust (not the whole document), which documents that the trust is an actual entity in our state. $5 and waiting a few weeks. We had a good lawyer guiding us, worth every penny. BUT now I'm building a new plane and all the purchases, registration, certification are in my name, so when it's certified I plan to transfer it to the trust, same way.
 
I just did this, kind-of. The airplane is registered already in an LLC with 2 equal partners. Both us just changed the partner names to the trust names we recently established. The FAA still recognizes the LLC as the registrant.
 
I just did this, kind-of. The airplane is registered already in an LLC with 2 equal partners. Both us just changed the partner names to the trust names we recently established. The FAA still recognizes the LLC as the registrant.
Since the point of a trust is for estate/inheritance purposes, I wonder if this accomplishes the same thing. IANAL, so have no idea...interesting approach, though.
 
I just did this, kind-of. The airplane is registered already in an LLC with 2 equal partners. Both us just changed the partner names to the trust names we recently established. The FAA still recognizes the LLC as the registrant.
I did sortof the same thing. My airplane is owned by an LLC. When I formed the trust, I just put the LLC into the trust. Per the FAA the LLC owns the plane. The trust owns the LLC. My attorneys had no issue with this.
 
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