Plane value vs. Personal Net Worth?

EdFred said:
Can I get preachy if I only borrowed a little money (1/4 of what I qualified for), paid it off in 4 years, and haven't had any installment loans since? :D
Click to expand...

Souds like a reasonable and responsible approach. It indicates that you are not financed to the max.
 
Since this thread began, I've come across a very nice 6 year old RV-9a which checks almost all of the boxes for me, so I'm now in the process of deciding on a loan (no debt other than credit cards and my wife's car), home equity loan (house is paid off) or paying cash (would deplete checking account by half which makes my wife nervous). My income will very comfortably cover debt service, expected maintenance, hangar ($160/month) and insurance, but I expect to be retiring in about 18months. Also trying to decide about forming an LLC to own the plane as a means of managing my estate's liability exposure if I crash and kill someone. As I proceed, I'm finding that in my particular financial situation, my net worth only matters insofar as it can provide me with enough post-retirement income to cover the airplane expenses and my wife's horses for as long as I can fly and she can ride.
 
MacFly said:
Since this thread began, I've come across a very nice 6 year old RV-9a which checks almost all of the boxes for me, so I'm now in the process of deciding on a loan (no debt other than credit cards and my wife's car), home equity loan (house is paid off) or paying cash (would deplete checking account by half which makes my wife nervous). My income will very comfortably cover debt service, expected maintenance, hangar ($160/month) and insurance, but I expect to be retiring in about 18months. Also trying to decide about forming an LLC to own the plane as a means of managing my estate's liability exposure if I crash and kill someone. As I proceed, I'm finding that in my particular financial situation, my net worth only matters insofar as it can provide me with enough post-retirement income to cover the airplane expenses and my wife's horses for as long as I can fly and she can ride.
Click to expand...

I'm in pretty much the same situation. Planning to retire in the fall and shopping for a plane. The savings and investments, plus a pension, will need to cover plane plus horse expenses.

At least the plane can sit for a while if it breaks. Horses, not so much. Gotta get a vet out right away when one colics, and I swear the critters know when it's after hours on a holiday. God never made a more efficient creature for converting money into manure.
 
MacFly said:
Also trying to decide about forming an LLC to own the plane as a means of managing my estate's liability exposure if I crash and kill someone.
Click to expand...

If you are at the controls, the liability follows you personally, not the LLC. If you owned the AC with a partner or if you wanted to rent it out to third parties, owning and insuring it through an entity may change the liability equation. If you are the only one flying the plane, the expense incurred to create and maintain the corporate entity may be better spent on buying higher insurance limits.
 
Velocity173 said:
I was looking at a Mooney yesterday that had a McCauley 3 blade. Mech said he just put one on another Ovation recently...$14K! Yeah, my net worth can’t afford that kind of maintenance.
Click to expand...

That's what new 3 bladed C/S props go for. That's not a mooney specific problem.

The other thing about props is, you don't have to bolt on new. I know that may be blasphemy for the pride in ownership crowd, but I don't find consumables like a propeller a "false economy" just because I installed it used. Ditto for IRAN or used engine swaps in lieu of factory zero, or outright "new" engines on fully depreciated airframes.
 
weilke said:
If you are at the controls, the liability follows you personally, not the LLC. If you owned the AC with a partner or if you wanted to rent it out to third parties, owning and insuring it through an entity may change the liability equation. If you are the only one flying the plane, the expense incurred to create and maintain the corporate entity may be better spent on buying higher insurance limits.
Click to expand...
Yup, I'm aware. My CFI, who is/was a CPA, many years ago was my accountant and my business' accountant recommends an LLC for its theoretical additional liability protection but noted that it was my insurance that would play the major role in protecting my estate. My attorney said the same. Most of my other airplane buddies say to skip the hassles of the LLC and that it would only provide an additional lawsuit target.
 
MacFly said:
Yup, I'm aware. My CFI, who is/was a CPA, many years ago was my accountant and my business' accountant recommends an LLC for its theoretical additional liability protection but noted that it was my insurance that would play the major role in protecting my estate. My attorney said the same. Most of my other airplane buddies say to skip the hassles of the LLC and that it would only provide an additional lawsuit target.
Click to expand...

LLC is useless if you’re flying the plane, it only works if you have partners, then it protects you if your partners screw up.


Tom
 
hindsight2020 said:
That's what new 3 bladed C/S props go for. That's not a mooney specific problem.

The other thing about props is, you don't have to bolt on new. I know that may be blasphemy for the pride in ownership crowd, but I don't find consumables like a propeller a "false economy" just because I installed it used. Ditto for IRAN or used engine swaps in lieu of factory zero, or outright "new" engines on fully depreciated airframes.
Click to expand...

Just another reason to go EAB. I can get a new Catto prop for just over $3K. Mine just got refurb / rebladed for only $1,100. My Hartzell is $7K new and over $2K to overhaul.
 
Last edited:
Velocity173 said:
Just another reason to go EAB. I can get a new Catto prop for just over $3K. Mine just got refurb / rebladed for only $1,100. My Hartzell is $7K new and over $2K to overhaul.
Click to expand...

Which 4 seat EAB has 1300 useful load,155kt cruise, and an acquisition cost in the 50-60k range?
 
EdFred said:
Which 4 seat EAB has 1300 useful load,155kt cruise, and an acquisition cost in the 50-60k range?
Click to expand...

Well take 300 lbs off of useful load and you’ve got a Velocity SE / 173. Since I don’t even need my 1,000 lb useful load, I’ll take my 165 kts on only 10 gal/hr.
 
Velocity173 said:
Well take 300 lbs off of useful load and you’ve got a Velocity SE / 173. Since I don’t even need my 1,000 lb useful load, I’ll take my 165 kts on only 10 gal/hr.
Click to expand...

Yeah, I use all of mine pretty often. Will be right at gross again this weekend.
 
MacFly said:
Since this thread began, I've come across a very nice 6 year old RV-9a which checks almost all of the boxes for me, so I'm now in the process of deciding on a loan (no debt other than credit cards and my wife's car), home equity loan (house is paid off) or paying cash (would deplete checking account by half which makes my wife nervous). My income will very comfortably cover debt service, expected maintenance, hangar ($160/month) and insurance, but I expect to be retiring in about 18months. Also trying to decide about forming an LLC to own the plane as a means of managing my estate's liability exposure if I crash and kill someone. As I proceed, I'm finding that in my particular financial situation, my net worth only matters insofar as it can provide me with enough post-retirement income to cover the airplane expenses and my wife's horses for as long as I can fly and she can ride.
Click to expand...


I have done a fair amount of work trying to figure out how to shield your estate from GA liability exposure, and as far as I can tell, there’s not much you can do. The only real protection you can get is through your aircraft policy, but only up to the policy limits. Umbrella policies won’t cover it, LLCs may slow the litigation process down but won’t actually protect you in the end, liability waivers aren’t that helpful because of the parties involved (their spouse and your estate, usually - neither of which will have been a party to the waiver between you and the theoretical decedent) etc. You can move a portion of your assets to a 3rd party trustee but then they’re outside of your estate and not under your control anymore, which makes it a little pointless IMO unless you’re purely looking to pass those assets to the next generation. It’s a major headache to set up and maintain anyway. If you figure out something reasonable, let us all know.
 
You must log in or register to reply here.
Back
Top