Frequently Asked Questions

What is an Aircraft Trust?

An aircraft trust is a relationship where a trustee owns an aircraft on behalf of an entity or individual. The trust is established as an extension of the true owner, also called the trustor or trust beneficiary.

Why would I want to put an aircraft in a trust?

Aircraft owners may establish a trust for a variety of purposes, including FAA compliance, company structure, simplification purposes, or convenience.

A common reason for establishing a trust is that a foreign citizen, limited partnership, or other party can use a trust to get a valid FAA registration for its aircraft that it would not otherwise qualify for due to strict FAA regulations.

A trust is the most simple and cost efficient way to necessitate the needs of foreign parties and investors to own and/or operate aircraft being used or leased within the U.S. FAA records would reflect Aviation Trust Company as the titled and registered owner, rather than the actual owner or beneficiary. This makes determining the true owner of an aircraft by a third party more difficult.

Are there any disadvantages to a trust?

The true disadvantage depends on the aircraft’s true owner and the comfort level they have with the trust agreement.

Aviation Trust Company would be placed between the true owner and their asset. The aircraft will be registered to Aviation Trust Company and all correspondence from the FAA about the aircraft will be sent to Aviation Trust Company and forwarded to the true owner.

Aviation Trust Company works hard to be very responsive to the needs of the true owner, making the relationship beneficial for all parites.

Do I still own the aircraft?

Aviation Trust Company will be the titled and registered owner of the aircraft on behalf of the beneficiary. You would own the beneficial interest in the trust and have the right to dissolve the trust or transfer the title to any party designated by the beneficiary, including itself, at any time and for any reason.

Can I still use the aircraft as I please?

In short, the answer is yes. Through an operating or lease agreement with Aviation Trust Company, control of the aircraft will be returned to you or any operator designated by you. You or your designated operator will be obligated to insure and maintain the aircraft in accordance to FAA requirements.

Can I still borrow against the aircraft?

Yes.  A trust will not negatively affect your ability to get financing for an aircraft. In some cases, it may actually enhance your ability to gain financing.

How does this affect taxation?

This type of trust is a tax-neutral entity, and should have no influence on your taxes. Any income of the trust will flow directly to you (owner of the beneficiary), as though the trust were non-existent. All taxes that would otherwise have to be paid will still be owed and cannot be avoided through the establishment of a trust.

Why not just use an LLC?

An LLC is an option for those that are not comfortable with forming a trust, however, for many people, it is the simplest and most cost-efficient way to obtain proper FAA registration.

Thousands of aircraft are registered with the FAA through a trust because they are a very flexible and readily accepted vehicle.

A trust is simple to establish and can be completed in a couple of days; it can be dissolved just as quickly and easily.