Estate Planning - What to do with the Airplane?

kontiki

kontiki

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Kontiki
I have a Grumman Tiger, it's about 35 years old. Not flying right now (rewiring a lot of it), but will be flying soon. I'm the only one in my extended family that has any interest in aviation at all.

I have no kids, no wife, I'm just a happy single guy (A&P, EE and Pilot) that works and plays in aviation. I'm trying to figure out what should happen to the airplane (and maybe the tools) if I get hit by a beer truck. I'd hate to see the plane rot unattended down the airfield. I'd like to see it go someplace where it could be used by young people that want to fly. I have no idea what the possibilities are. Any ideas? I thought about donating to a local A&P school. There are probably other options out there. With so many old pilots, this must come up a lot.
 
You could stipulate in your will the airplane be sold, designating a pilot buddy as being in charge of its disposition, and monies contributed to your estate for distribution. Or be generous and will it to an EAA Chapter or some young pilot struggling on his way up.
 
Yeah, what Jim said. Give a trusted buddy instructions and the signed documents of the instructions and authorization to do whatever you want. The paperwork can be written so it only takes effect on your death. This is really a good thing to do. Too many people have good intentions, but if it isn't in writing, there is no control later.
 
I attended a college that had a flying club. Always thought it would be cool to leave them a plane to help train some new pilots at a more reasonable cost.
 
Do a "reverse mortgage" deal with a local club. They could give you biennial flight reviews and provide safety pilots for your training for the rest of your life and at the end they get a plane. A lawyer could write that up pretty easily. (Oh yeah, they pay for the lawyer.)
 
Give it me? Joking. Kinda.

Good ideas above - My intention is to own an airplane first, then give it in order to the first one of these to claim it by having a pilot's license.
1) son
2) nieces/nephews, oldest first
3) cousins and their children, oldest first.
4) Ask the EAA 1114 president for assistance in selling it. If my wife is alive, EAA gets 25% of the money. If she isn't, EAA gets it all. Sorry dear.

I don't want to sell it, give it away.
 
Note, that some of the suggestions here won't work. You can't do a "sign the forms now--file later" with the aircraft registry. They don't work this way. This means you either are going to have to probate the thing, or put it in a trust now.

Frankly, I'd get to a lawyer that handles estate issues and get a will, trusts, and things like advance medical directives, etc.. in place.
 
I personally don't think it would be fair to put the burden of selling the plane on a friend (unless they agree to it, of course). just donate it to someone who's willing to take it for free.
 
What kind of estate? Put it into a trust so it seamlessly transfers to your executor without probate. Let them dispose of it as they see fit.
 
If you can find a charity that you'd like to see have it, then I would put in the will that you would donate to them. Make sure that you know the people in charge and that they will use the plane as you want it used.

For example, if you donated the plane to Cloud Nine, we would sell it to fund our animal rescue efforts, not use it for animal rescue or any other purpose. The reality is that most non-profits will do the same. When the 310 owner donated the plane, he wanted to see it used. Since the 310 fit our mission and was an upgrade vs. the Aztec, it worked great. Today if a 310 got donated, we'd sell it.

Talk to people who run the non-profits, make sure you know they will do what you want with it, and then also make sure the executor of your estate knows what he/she will need to do to make that a reality. Also make sure that the non-profit you choose you trust to be able to keep the plane going. The people in charge are important.
 
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eman1200 said:
I personally don't think it would be fair to put the burden of selling the plane on a friend (unless they agree to it, of course). just donate it to someone who's willing to take it for free.
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I would hope that the executor of your estate would know that he or she was chosen as such.

It's one thing for people to not expect to receive an inheritance when you die, it's another thing for someone to not expect to be executor.
 
In the years I've been an airport manager, I've seen too many people not plan for this. Aircraft pass onto the estate and family members hang on to it, not wanting to sell it, thinking that it's worth a fortune because it's an airplane. Family members (more often than not) know squat about airplanes. These aircraft sadly end up rotting until there is nothing left and they are worthless. If you know you can't fly any longer, sell the plane or pass it onto a family member. In fact, going through this right now with a family that won't let go of a Tri-Pacer that has collected nothing but dust and bird crap & hasn't run in probably 15 years because they think it's worth the price of a perfect condition aircraft that is flying in Trade-a-plane. The guy has been gone for over a year now and it continues to rot in one of my hangars. Even more sad is that I hear they have a J-5 in a barn on their property and the same is happening with it.
 
Some EAA Chapters have youth programs
College flight school or a flight school
Wings of Hope donation or the like
Salvation Army

If those don't appeal to you, then I'll accept it! :D
 
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Leave it to me, you're family will just fight over it anyway.
 
I am in a different situation, with 3 kids only one has any interest in flying. The one that flies gets the 182 when I croak, the 425 or whatever I have at the time of croaking will be sold by Howard Van Bortel and the proceeds to my estate.
 
In theory you are updating your "wishes" regularly. I'd suggest December or January where you're likely to be thinking of the year just ended and the one just starting.

In your instructions state that an approximate value of the plane is $XX,XXX. That way there will be little bickering and/or feeling that "Pop's loved that 152, he would never accept less than a million dollars."
 
As long as you have a competent executor it shouldn't be a problem. After my father died I had to deal with certain items of personal property that I didn't know how to dispose of, but it wasn't hard to learn those markets. Did I get every cent out of every item? Maybe not, but I probably got at least 90%. Close enough.

As far as getting hit by a beer truck goes, you have no worries there, everyone knows that beer trucks only bring joy and happiness. They will never cause you harm.
 
FormerHangie said:
As far as getting hit by a beer truck goes, you have no worries there, everyone knows that beer trucks only bring joy and happiness. They will never cause you harm.
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Then explain Keystone Light to me.

Wait -- you said beer. never mind.
 
I am writing from experience on this one. I am in the process of inheriting a plane from my father. The general rule of thumb is that if the deceased person's name is the only name listed as an owner it must pass through probate, regardless of who the new owner is going to be. They will also require an appraisal to be done on the plane. This allows two things. One the government to take their cut if there is any inheritance tax or estate tax that is possibly due. Two, anyone to make a claim against the estate for inheritance or to settle any debt the estate may owe.

Certainly, you can stipulate where any part of your estate ends up, and it should get there, but it will take some time. Make sure you designate an executor your trust. It will take a minimum of 6 to 9 months regardless. Even if the plane is placed in a trust it will generally need to pass through probate if that trust was created by the will. The only way to avoid this would be transfering ownership before death.

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Matthew said:
Yeah, what Jim said. Give a trusted buddy instructions and the signed documents of the instructions and authorization to do whatever you want. The paperwork can be written so it only takes effect on your death. This is really a good thing to do. Too many people have good intentions, but if it isn't in writing, there is no control later.
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The trusted buddy would be the executor, or personal representative, listed in your will, i.e, the paperwork that only takes effect on your death. If all you want it for someone to sell the plane when you die, that's what an executor does. If your plane is of significant value, you might want to leave specific instructions, or even name a specific auction house or broker. You can also make a specific bequest to a pilot friend.
 
drotto said:
I am writing from experience on this one. I am in the process of inheriting a plane from my father. The general rule of thumb is that if the deceased person's name is the only name listed as an owner it must pass through probate, regardless of who the new owner is going to be. They will also require an appraisal to be done on the plane. This allows two things. One the government to take their cut if there is any inheritance tax or estate tax that is possibly due. Two, anyone to make a claim against the estate for inheritance or to settle any debt the estate may owe.

Certainly, you can stipulate where any part of your estate ends up, and it should get there, but it will take some time. Make sure you designate an executor your trust. It will take a minimum of 6 to 9 months regardless. Even if the plane is placed in a trust it will generally need to pass through probate if that trust was created by the will. The only way to avoid this would be transfering ownership before death.

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I would disagree with much of this, but it may be because the laws are different between NJ and GA. In GA, you could probate the will and transfer the property to the new owner pretty rapidly as long as you knew the estate had other assets to cover any existing obligations. The onus is on the executor/administrator to get that part right, but there are very few bureaucratic checks and balances to slow down the process. With current tax laws, the estate has to be very large to make it taxable at the federal level.

I'm an executor/trustee/adminstrator on 7 different family estates and estate generated trusts. One thing I will say is that you should never nominate an executor without talking to him/her first. Being an executor or administrator (or trustee) is a lot of work, and is generally pretty low paying work for the amount of personal risk the executor or administrator is taking on.
 
A little detour but it may help others...I set up an email account and emailed copies of my will, POA, medical directives...to it. I carry a laminated card in my wallet with the email address and password and instructions to the site for first responders/medical professionals. It's the only thing in that email address and the only thing I use it for.
 
kontiki said:
I have no idea what the possibilities are. Any ideas?
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Every state has their own rules. Best option is ask around for good Estate attorney in your area. With the right plan it works out, with the wrong one.... On occasion, I assist attorneys who try and untangle aviation assets from the wrong plan.
 
From what I've been getting: Obviously an attorney would help draw up whatever documents you need. Not so obviously an aviation savvy attorney would be able to assist with the FAA paperwork transfers.
 
Matthew said:
From what I've been getting: Obviously an attorney would help draw up whatever documents you need. Not so obviously an aviation savvy attorney would be able to assist with the FAA paperwork transfers.
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An aviation attorney would refer you to an Estate attorney as an aircraft is a defined physical asset of an estate. Handling the aircraft FAA paperwork is an administrative task, but handling the asset ownership transfer is a legal probate matter. And in order to file the FAA paperwork a person must prove they are the legal owner which can only come from the Estate side of things.
 
Insert a firebomb in the airplane with a two week timer. If no one goes over & flies it regularly, off it goes.
If you can’t collect on insurance, at least it will be put out of its misery rather than rot in its cage.
 
Whatever you decide, make sure it is specified in your will. If you look at the way the law works, most of the time it looks for intent and reasonableness. Probate law deals with what's specified in the will, and the law of the state in which it is being enforced. It is entirely possible to specify something in your will that is contrary to the law, at which point the law takes over.

Also, the disposition of personal property is adjudicated according to the law of the decedent's state of residence at the time of death, while real estate is adjudicated in the state where it is sited. If you live in New York and have a vacation house in Maine, your executor gets to deal with both states.
 
I was looking at some land that was for sale, a sizable piece of land. But the owner died without a will. It will be tied up in courts for a long time. Family, siblings all fighting over it. Total shame because there is a couple of orchards on it that will all die off, and the house, which was a 1920s style house that was totally renovated that just sits there, unoccupied except by critters...
 
Let'sgoflying! said:
Insert a firebomb in the airplane with a two week timer. If no one goes over & flies it regularly, off it goes.
If you can’t collect on insurance, at least it will be put out of its misery rather than rot in its cage.
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Not that this was meant as a serious suggestion, but I’d just note that it would be a bit hard for him to set a timer after having just been killed by a beer truck. That doesn’t even consider the discomfort people flying his plane might feel having a timed bomb attached to it. The idea needs more work.
 
Stewartb said:
What kind of estate? Put it into a trust so it seamlessly transfers to your executor without probate. Let them dispose of it as they see fit.
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Depending on the state, transferring "ownership" even to "yourself" is a tax event.
 
Just a heads up, I did find that the EAA has a program for acquiring donated aircraft and brokering them to active chapters that operate flying clubs and chapters capable of repair and restoration if that makes sense too. I reactivated my membership (I want to support them anyway) and sent an email inquiry, someone got back to me with the info my attorney said he'd need.

I did find I could google the topic and find folks willing to accept charitable donations of airplanes, but I really couldn't be sure what cause they were advancing and didn't want to spend the time trying to figure out what they were about.
 
I am still waiting for the plane I am inheriting to clear probate and be handled by the FAA. So far 9 months and counting in NJ. I have not lost use of the plane and remain fully insured and legal to fly it, but the title has not been cleared for transfer yet. I know the estate has been released by the feds, all the tax documents have been filed, and certain accounts etc have been established. Very frustrating.





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A will. Or a trust. Explicitly describe what you want the executor to do with the airplane. Don't depend on the good graces of anyone, definitely not the State should it go into probate.

Get a good lawyer who does this for a living.

A few years ago one of our EAA members left the hangar and the airplane to the chapter. The family complained, went to court, the chapter won because the will was very explicit. Unfortunately it took a couple years to work thru the system. We sold the airplane, the hangar is used exclusively for our members for the last 6 months to complete the build (attach wings, etc). The attached bathroom is a bonus.
 
murphey said:
A will. Or a trust. Explicitly describe what you want the executor to do with the airplane. Don't depend on the good graces of anyone, definitely not the State should it go into probate.

Get a good lawyer who does this for a living.

A few years ago one of our EAA members left the hangar and the airplane to the chapter. The family complained, went to court, the chapter won because the will was very explicit. Unfortunately it took a couple years to work thru the system. We sold the airplane, the hangar is used exclusively for our members for the last 6 months to complete the build (attach wings, etc). The attached bathroom is a bonus.
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I know the estate is free and clear, and I know any leans and taxes have been dealt with. A very good attorney is handling everything (same firm that wrote the will). NJ has all the paperwork, but just has not gotten around to final approval. Our end has been completed.

The only change I am making is I want the plane to transferred to an LLC as opposed to me personally, so I can take on partners. I have already checked the tax liability in this situation. As long as I do not make a profit on the sale of the plane or shares of the plane based on the declaired value in the estate, there is no liability.

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Donate it to Eaa on your demise,let them decide where it can do the most good .
 
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