Gents,

So I'm pulling the trigger. Found a plane I want, meets mission etc. Next steps -- how to hold that aircraft legally. I have been reading a whole lot -- and I think i'm dumber now than when I started. Here is what i want to do:

I want to be in a position where if a trusted buddy wants to use the plane that it's easy to say sure! like i would with my truck or tools.

I have a feeling that everyone one this board is a bit old school and honors a handshake and the man-card carrying opinion that if you break someone else's plane then you fix it, no questions asked, now. and that if you can't afford to fix it then you shouldn't have broken it. I'm right there with you. and in an instance like that the worst thing you're out is the cost of a plane. but here's the thing - something real bad happens and it is entirely possibly that while your trusted buddy would never have come after you legally, their family WILL. this sounds farfetched I know, it has happened adjacent to me and it was horrible (and doubly so in that the deceased party would NEVER have wanted it and the legalities of it were beyond absurd, our notions of right and wrong are certainly not remotely what the legal solution gets to).

second piece to the question. at some point i might do "transition training" with it. I also think you might be able to do float training with it (Zenith SD, experimental). I think the transition thing is good to go and the float thing smells a lot to me like the dude who will do your multi for you in an air cam -- so i THINK that's good to go. i'm a while off on that (still real busy with 2 primary jobs). but "some day" i'd like to shift into that - or at least have set myself up to.

lastly - i wouldn't mind being a BIT more anonymous as the world slips towards less and less privacy.

what i am NOT trying to do: cheat on sales tax, avoid legit taxes, break the law, go very far into a grey area etc.

so. can someone set me straight here? I'm buying in Louisiana, basing (and live in) Florida which is my state of residency. I'll be financing a bit of it -- money too cheap right now to just cash it out. Military flyer for a long time just getting into GA - pls forgive my complete ignorance here. Am I confusing insurance with liability burden? LLC? Hold in person? Title in dog's name?

I don’t have an easy answer for you but will give you a couple thoughts from my experience on the LLC topic.

I had planned to register airplanes in an LLC for some semblance of privacy, or legal reasons, or whatever. I’m actually glad I didn’t because I’ve sold 2 planes to people who would’ve had to pay sales tax ($$$) if the planes had been in an LLC, and actually said they would’ve negotiated that in the price. I encountered this myself when I purchased an airplane from an LLC. Kentucky (my place of permanent address although I live life as a floater) wanted to charge me 6% sales tax on $108k. That’s a lot of money. I had to prove that the LLC was not an “actual business” which was more arduous than I’d like.

This only applies if you know you’ll be selling the airplane. People who keep airplanes very long term probably don’t need to worry about this.

Asa, thanks for the thoughts.

As I crank through this I'm starting to think this issue has as much to do with insurance as much as it does the "legal holding entity". It is only in the instance of "insurance running out" (fatality associated w/ airplane is only thing i can think of that gets you there) that the holding entity now could in any way protect "you" from legal action. and actually it sort of wouldn't protect "you" -- it would only really protect any other LLC's you had. At least that's how my notes are coming together.

On the small business side it is not clear that an LLC is a lot better than just holding it in your own name. However it could potentially be a way to keep the paperwork nice and clean (which could be bad if your wife realizes just how much you're really spending on all this). For tax purposes an LLC is just a pass through to you personally.

I'd like to get this (not so fun) part over with - reading through this stuff is worse than getting a darn instrument rating. The struggle is real.

Many years ago, concerned about liability while starting a flight training operation in my Cessna 170B on floats, I consulted with a well known attorney in the area, who both owned airplanes and contracted to commercial aviation operators.

I asked specifically about the wisdom of creating an LLC for the flight training operation. I owned the plane...no outstanding loans. His response was brief and to the point: As a single proprietor LLC, any client who sued would blow through that LLC so fast Itd make my head spin. He pointed out that in fact LLCs were really beneficial if there are more than one “proprietors” involved. He said that for a flying club, etc, they’re a great idea.

But for just you, I doubt it. Make an appointment with a reputable attorney and ask that question yourself. But, I’ve heard essentially the same from a number of other attorneys since. Now, when a lawyer turns down business....pay attention.

I swore I would NEVER owe money on an airplane, and I haven’t. That’s a personal thing, but I figure if I can’t afford to buy it outright, I can’t afford it....with planes. Now, there may be valid reasons to take out a loan, as long as you’re 100% certain you can pay it off. As in sure.....consider the state of the economy right now....lots of future unknowns.

Finally, I would NEVER loan ANYone my airplane these days. Ever. And, I would never borrow someone’s airplane. I’ve seen too many trusting individuals left owning a pile of parts that used to be an airplane......oh, and holding the bag as well. As the saying goes, “We’re friends till the end, and friend, this is the end.”

If you don’t think that friend will walk away, good luck. I know-jaded, but not without good reason.

MTV

No thoughts on how to "title" the plane to protect you... I gave up on that thought.

But I do have a comment on your "intended use" discussion... You wrote:

I might do "transition training" with it. I also think you might be able to do float training with it (Zenith SD, experimental). I think the transition thing is good to go and the float thing smells a lot to me like the dude who will do your multi for you in an air cam -- so i THINK that's good to go.

I believe that being experimental would (by default) prevent you using your airplane to provide training, unless you were to obtain a LODA from the FAA for that purpose. Without the LODA, a CFI can give instruction in an experimental owned by the pilot receiving the training, but cannot give instruction for hire in their own airplane.

On the other hand, the Air Cam guy you referenced was able to convince the FAA that the airplane was unique enough that specific "in type" training for multi-engine was a good idea, so they issued a LODA to him so he could offer that training "for hire" in his EAB. Ditto for the RV "transition training" guy up in Oregon. He convinced the FAA that RV-specific transition training was a good way to reduce "first flight" accidents, and he also received a LODA to offer that training "for hire" in his EAB... So you might be able to convince them that offering transition training / float training specific to the Zenith SD would be worthwhile along similar lines.

I hope you're able to obtain the LODA. It sounds like a great service to the flying community! Good luck!

Careful getting too creative. Currently a bit of a fiasco if you were using Aircraft Guaranty Corp. (AGCorp) Trust Ownership Services. Be aware that AGCorp was intervened by the US Government together w Wright Bros. Aircraft Title and all their assets are now frozen.
The FAA has no clue as to how they are going to proceed but they are not handling any AGCorp renewal of registrations, change of ownerships, etc....it might take a long time before it gets resolved in US court.
There's over 1200 aircraft worldwide involved

[quote="mtv"

Finally, I would NEVER loan ANYone my airplane these days. Ever. And, I would never borrow someone’s airplane. I’ve seen too many trusting individuals left owning a pile of parts that used to be an airplane......oh, and holding the bag as well. As the saying goes, “We’re friends till the end, and friend, this is the end.”

If you don’t think that friend will walk away, good luck. I know-jaded, but not without good reason.

MTV[/quote]

This right here sums it up pretty good in my opinion. In today's litigious society, your friend or friends family can very easily become your worst enemy. They have no investment in your possession and if the worst happens, like has been said, it will fall back on you. Granted getting a rider on your policy might help, but in the end it is your money.
Have had to go to court twice for similar ordeals. Now I guess I am an asshole...no one flies my plane unless I am in it.

MTV -- thanks for the words. That advice that as a sole owner an LLC is not worth a whole lot matches up w/ what I have been reading when it comes to "what if something bad happens while I'm in the plane". There does seem to be an argument that the LLC could protect the plane if something happens in the "rest" of life and they want to come after the plane as well (sort of reverse protection in that instance). As far as owing money -- check and concur -- I am using the 100% certain category. It makes me sad that we're in a place these days where loaning an airplane is just un-doable. I'm sure you're right, just makes me sigh; doesn't feel like the world we grew up in.

JP -- thanks for your thoughts as well. There are numerous experimental "types" out there that do type specific training (Stick and Rudder for KF, a few Van's outfits, at least one for Glasair, etc). Correct - they all use a LODA and while I certainly have no "in" to get that I figure I can at least throw some paper at them and see what happens. I read up on the Air Cam guy -- and this is one that really threw me -- he is doing a "multi engine rating" with the AirCam platform. It's not an AirCam "multi" -- it's a real multi. I'm still digging into the details on this one but if you can use an experimental to do a multi then a float rating isn't so different, I know the Stick and Rudder guys can give you a "tailwheel" checkout. Great points -- and I certainly don't have this all nailed down. Really I just want the plane and if any of those things work out great -- I don't have the time (or nerves?) to give primary training or anything like that. My girls are at an age where if I'm going to fly them and have that be a part of their pre-adult lives then now is the time. The rest? We'll play that by ear.

Karmutzen -- Yikes! That sounds awful and I hope you aren't directly affected. I am just trying to nail down a "best case conservative answer" so I can get back to the enjoyment and fun part of all this!!

Thanks all --- I have been lurking here for a long long time hoping I could get to a place where I had something to contribute. I appreciate you taking your time to push thoughts my way.

MTV was right he listened to his attorneys advice after years of filing and defending lawsuits a llc is not going to protect you with ownership of an airplane. The only thing you can count on is paying the state corporations fees and get the shaft when sued never let a friend fly your plane without you in the front seat

Pretty sure the Stick & Rudder planes are factory built LSA and not experimental.

Not sure there is enough unique about the Zenith to justify a LODA for transition training, other than being fugly (in a good way of course).

aftCG wrote:Pretty sure the Stick & Rudder planes are factory built LSA and not experimental.

Not sure there is enough unique about the Zenith to justify a LODA for transition training, other than being fugly (in a good way of course).

Yes, the Aircam got the LODA because it is a VERY unique configuration, etc. Hard to match that arguement for a LODA. And, in fact, all the characteristics of asymmetric thrust present in that airplane, and it is in fact multi engine.....sea.

Actually, would be a kick in the butt to do a MES in one.....hmmmm.

MTV

I am amazed at the number of people borrowing & lending airplanes,
sometimes insured & sometimes not.
I would never do either.
As I like to say, "everything's fine....until it isn't".

I've seen several airplanes damaged by borrowers,
(a couple of them by the same borrower),
and the borrowers never made good on it.
It can get ugly, & is a good way to ruin a friendship,
to say nothing of knocking the hell out of someone financially.