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Avoid Probate for your family Cub?

bob turner

Registered User
I just became aware of a problem area - if I am the sole registered owner of my Cubs, they will most likely go through probate even if I list them on a trust.

It has been said that if I change my title to read “bob turner as trustee”, it may be possible to instantly transfer title to a stated beneficiary the day I croak. That is not as clear as it should be - I would own the aircraft as trustee, but upon my unlikely death, I would be unable to sign a bill of sale.

This has to be standard stuff - I was just unaware of the possibility that FAA ownership might be vastly different from, say, that of a Ferrari. What have you all discovered that works?

Probate is expensive, and the estate gets to pay tie-down and insurance while the aircraft deteriorates - often more than a year!
 
I've dealt with this a couple times, by far the best is to transfer ownership or sell before you assume room temperature. An agreement can be drawn up between you and the prospective new owner that transfers ownership upon your demise. Or even sign a bill of sale over to that one in advance assuming you trust him enough.
I bought a hanger from a recipient of a trust when his father died and it was not a problem in New Hampshire. He had full authority to sign for his deceased father.
Not a lawyer and state laws differ I'm sure.
 
I just became aware of a problem area - if I am the sole registered owner of my Cubs, they will most likely go through probate even if I list them on a trust.

It has been said that if I change my title to read “bob turner as trustee”, it may be possible to instantly transfer title to a stated beneficiary the day I croak. That is not as clear as it should be - I would own the aircraft as trustee, but upon my unlikely death, I would be unable to sign a bill of sale.

This has to be standard stuff - I was just unaware of the possibility that FAA ownership might be vastly different from, say, that of a Ferrari. What have you all discovered that works?

Probate is expensive, and the estate gets to pay tie-down and insurance while the aircraft deteriorates - often more than a year!

Thats why well written Trusts have Successor Trustee(s) already named and include after death instructions to liquidate or continue... done correctly all it takes is the designated Successor Trustee to continue or do their job is the certified Death Certificate and copy of the trust to accompany the registration. Oh and just in case something gets forgotten a Pour-over Will easily cleans up forgots...
 
I have seen this done by creating a company - or corporation - while the subject is alive and transferring the aircraft to that corporate entity. The principle remains an officer of the corporation with controlling interest. After the death, the two remaining officers maintain control of the asset without any transfer of authority necessary. Of course you have to have two people you can trust before you die and I am categorically opposed to trusting living humans, but I have seen it done this way.

You're quite right to be concerned. Estates can be awful. I have currently been administrator of my sister's estate for almost three years - and it looks like we've got at least three more due to an oversight in the paperwork for one of her accounts. It's been as unpleasant a thing as I can recall - which is made all the more unpleasant because I am reminded often of my sister's untimely demise. But the law is the law and all I can do is keep working through it. I wholeheartedly encourage all y'all to plan your estate while you can. The better planned it is ahead of time the more likely you are to have your wishes carried out. Not to mention how much easier it makes it for the unfortunate folks left behind who have to mop it all up. Don't give your loved ones reason to begin to dislike you after you're gone.
 
Thanks. The sticky thing in all this is - the example presented to me has two dead trustees. I am not sure the aircraft involved had the required "as trustee" on the title, but what happens if the settlor dies, and his first selected trustee - the one on the title - dies more or less at the same time - what then in Oklahoma City?

As far as I can tell, this is a problem for aircraft owners, and for everything else the court can appoint a trustee and things proceed as planned.
 
Like all official paperwork, trusts need to be updated. Aircraft as an asset of the trust can be bought and sold by the trust. Not only trustees, but you can also name beneficiaries.
 
Three years ago I bought an airplane from the estate of the man who was sole owner and passed away. This was shortly after his passing and the transaction was completed with his daughter who had power of attorney and I assume was executor. I had to make the check to “The estate of…..” The FAA was happy to register the plane to me when I had a letter from her attorney to that effect. If the airplane did go through probate, it was a matter of a few weeks.

I am not a lawyer and I did not stay at a Holiday Inn Express last night.

Rich
 
My estate lawyer considers aircraft "liability generators" and is recommending that my plane be put in a LLC.
 
All the FAA cares about is a legal signature on the bill of sale. The executor's signature and title on the bill of sale and a copy of the legal document declaring that certain person to be the executor.

I have an undated signed copy of a bill of sale in a safe place for my Cub.

How you handle the money is altogether separate.
 
My estate lawyer considers aircraft "liability generators" and is recommending that my plane be put in a LLC.
A single owner (including husband and wife) LLC provides virtually no liability protection, you need a new Lawyer.
 
I do - it is called “pierce the corporate veil.” I can go into more detail, but setting up a corporation to avoid liability for one’s own negligence can be problematic.

Here in Calif, it costs $800/year, not counting meetings, records, and attorney fees, and the insurance costs stay the same.

Plus, you want to make sure you have in writing that the LLC policy covers you as a professional, and that the “duty to defend” extends to you. Any lawsuit will name the LLC and the pilot.

All opinion.
 
I don't understand how such a declaration can be made based on such scant information.
Experience here in Oklahoma, I did construction litigation support work for 25 years and have seen the single owner LLC veil effectively pierced to bring about personal liability. In one case I remember it was found that a defendant was simply using the veil of (multiple) LLCs to avoid the cost of carrying insurance.
 
I purchased my PA-30 from an estate. The airplane was registered to the husband and wife and the husband had passed away. Took a couple months to clear up all the paperwork squared away. In VA there evidently isn't any probate but FAA wouldn't accept just a copy of the death certificate and were less than helpful on what was needed, Finally found a "Heir at Law" FAA form that did the trick.
 
I just became aware of a problem area - if I am the sole registered owner of my Cubs, they will most likely go through probate even if I list them on a trust.

It has been said that if I change my title to read “bob turner as trustee”, it may be possible to instantly transfer title to a stated beneficiary the day I croak. That is not as clear as it should be - I would own the aircraft as trustee, but upon my unlikely death, I would be unable to sign a bill of sale.

This has to be standard stuff - I was just unaware of the possibility that FAA ownership might be vastly different from, say, that of a Ferrari. What have you all discovered that works?

Probate is expensive, and the estate gets to pay tie-down and insurance while the aircraft deteriorates - often more than a year!

We have a Revocable Living Trust to simplify the transfer of our assets after we both die. My parents had one and it worked smoothly without probate or legal issues. All our major assets are titled in the trust with us as trustees. This includes bank accounts, investments, our home, cars AND the cub. I have sold a home owned by the trust with no difficulty. I think you actually need a trust to list yourself as “trustee”.

The one negative I encountered with the cub is Avemco doesn’t cover me in other aircraft whereas they would if it was registered to me. Previously I had Republic insurance and they didn’t have this restriction. So now if I fly someone else’s plane I ask them to check with their insurance for my coverage. This doesn’t happen much but it’s not ideal.

A trust is worthwhile. Having a Will too is good but if that’s all a person has, the transfer of assets might be slow and expensive. By the way, retirement accounts are not normally put in the trust.

Robert
 
"It has been said that if I change my title to read “bob turner as trustee”, it may be possible to instantly transfer title to a stated beneficiary the day I croak. That is not as clear as it should be - I would own the aircraft as trustee, but upon my unlikely death, I would be unable to sign a bill of sale."

Bob........you might want to check out South Dakota trust options. We're nationally known....it's does require a SD address but there are many firms, banks, etc. that provide that. My understanding is that you don't own the aircraft......the trust does......you just have control of it. Register the trust in another state? I don't know your circumstances but I just settled my Mom's trust last year. If you have a "trusted" trustee that follows you, as trustee, then they have the power to do your bidding as far as property in the trust. JMO from my experience.
 
South Dakota is indeed famous for trusts - but these small estate trusts work anywhere. My initial question had to do with some perceived FAA roadblock if the person on the title was not around to sign. I think Skywagon and dga put that to rest.

None of ths was personal - it involved four airpanes owned by someone I never knew - one of the Stearman partners asked if I had any thoughts.

Forums are magic when you need a few opinions. You guys helped.
 
Oh - I like Florida. If I hadn't been dragged kicking and screaming here by the Navy I might have considered it.

But now, alll I want is for everybody else to move to Florida, and take their cars with them.

As the old bumper sticker said: "Tourists go home! But leave your daughters."
 
The monthly "Legally Speaking" column in the Feb 2024 issue of AOPA Pilot magazine talks about this stuff:
"Shared Assets- aircraft titles and joint tenants with right of survivorship".
 
There is more than one way to do things and one size doesn't fit all. Find a lawyer experienced in estate and commercial law for the best solution. And avoid fads. Simpler is better. A lot less expensive to sort out.
 
How about just sign a bill of sale and file it away with the rest of the documents. Tell your wife/kids/brother/whoever you want to get it to send it to Oklahoma City along with a registration application should you croak. I’ve seen the FAA accept a Bill of Sale signed by someone that had been dead for about 15 years. Of course if there is a note on the airplane that won’t work.


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If you are an individual you have to sign and date an FAA Bill of Sale and the date has to be "timely". If you are alive and you sign the Bill of Sale and you pass your signature is no longer "timely" as you are no longer a person, rather an estate upon death. If you have your executor pre-sign while you are still alive that is also not "timely" as he cannot sign as an executor of an estate as you are a living person.

The FAA Bill of Sale is only one of three docs that are needed to transfer title legally with an FAA Bill of Sale when an indivdual becomes an estate. Your executor will need to send a valid death certificate. A letter of Testamentary has to be generated by your will (if you die without one they would need a letter of administration) and this cannot be generated until a death certificate has been filed with the local authority (county seat). Once you are recognized as no longer person and the will has been filed and the county (or authority) will grant the Letter of Testmentary so your executor can sign legally on behalf of the estate. This notarized letter tells the FAA the signatore is authorized. If you use escrow, your agent will bring all of the docs (death certificate, Letter of Testamentary, and Bill of Sale) to the FAA and they will release title to the seller (liens satisfied also if needed).

If I was a buyer I would not present a Bill of Sale signed by a person that I know to be deceased. That is fraudulant and could result in title issues if the estate were to be disputed. Similarly, I would not accept a pre-dated Bill of Sale for the same reason. As a buyer or buyer's representative I have to know that the entity signing the Bill of Sale is legal and binding. Just because it has been done doesn't mean it is safe and the title transfer would stand up in a probate action at a later date.

I operate a number of Revocable Trusts for foreign owners of N registered aircraft. Transferring them within the trust and to the new owner is pretty simple and then if the new owner wants to revoke the trust per the agreement it can be transferred to them and out of the trust (three filings). I have done this several times and it is pretty painless. I would imagine a trust transfer due to death would operate in a similar manner, but as Trustee I have to have an authorized signer of the trust transfer similar to the FAA Bill of Sale above. If the trust names them prior to the death they would be authorized I would imagine.

If the aircraft is part of a corporation or LLC also be aware that due to some Covid laws on privacy the FAA can no longer accept or request doucuments regarding organization and designation of officers of entities. This makes it harder to prove that a signer is in fact an officer of any entity and can sign a Bill of Sale. Each situation here is a bit different and I rely on escrow agents to guide me through the paperwork each closing will require knowing the FAA can't request some documents. YMMV.

I won't buy a J3 or G650 without using an escrow agent to walk my paperwork into the FAA and walk out with the aircraft transferred and closed. I have bought and sold several aircraft that are part of estates. The paperwork has to be right and the plane has to transfer. Probate and estates can get nasty and I want no doubts on the paperwork to cover both sides of any transaction. Escrow is cheap insurance if you buy or sell with or for an estate.


PJJ
 
Who is to determine if the signature is "timely" if it is dated a few days prior to the date of death? It's doubtful the FAA is going to do an ink analysis on the signature.
 
Prior to the FAA having an expiration date on registrations it was common practice to have a signed bill of sale for a project and not file it or the registration application until the project was done. Most states only start looking for their sales tax when title transfers so that deferred paying sales tax. Not saying it was right, just how it was commonly done.


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That was always my plan -- until I got to thinking.
There is a difference between inheriting a cub and buying a cub for zero dollars when it come time to sell .
IRS wise anyways.
 
Who is to determine if the signature is "timely" if it is dated a few days prior to the date of death? It's doubtful the FAA is going to do an ink analysis on the signature.

The FAA is not your problem it is a probate judge. If someone who is a beneficiary finds out that an asset of the estate was sold after the death of the owner of an asset (in this case an aircraft) they have every right to protest in court regarding the sale and make sure the asset is part of the estate. As an aircraft buyer when dealing with an estate you have no idea what the probate of the estate may look like.

If you are the executor of the estate (selling an aircraft) and you file a fraudulent document you also could be held responsible. I would not expose an executor to having to file a fraudulent document. That is not a reasonable request given the above situation with probate drama always a possibility.

The aircraft can transfer through the estate once the death certificate is generated and the local authority gives the letter of testementary to the executor of the estate. It really isn't that hard and doesnt take very long. It is my opinion that doing it legally and without committing a fraudulent act is worth the couple of weeks it takes to do it correctly and legally. The risk isn't worth the gain of a couple of weeks. This is true if the aircraft is willed to someone or is to be sold upon the owner's death.

PJJ
 
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