Shared Ownership 1987 Mooney M20J

"B A R R Y" wrote in message
. ..
N2310D wrote:

At this time, I'm in an "association" with four other pilots. I can't
really call it a partnership because, in this case, one of the pilots is
the outright owner of the airplane. The other four have no equity in the
airplane. And it is not under any mortgage.

How do you handle insurance?

That agreement sounds like the owner is renting the aircraft to you,
without officially and legally stating that's he's actually renting.

I would think this might get interesting, in a very bad way, if the
airplane gets bent.

The owner lists all five pilots on the policy. The pilots pay an equal
share of the premium cost. The insurance company is happy with the
arrangement.

N2310D wrote:

The owner lists all five pilots on the policy. The pilots pay an equal
share of the premium cost. The insurance company is happy with the
arrangement.


That makes sense.

It's also less informal than I originally would have thought, because
all of you ARE listed together on paper somewhere.

B A R R Y wrote:
N2310D wrote:

The owner lists all five pilots on the policy. The pilots pay an equal
share of the premium cost. The insurance company is happy with the
arrangement.


That makes sense.

It's also less informal than I originally would have thought, because
all of you ARE listed together on paper somewhere.

You have to be. For a pilot to be covered under the open warranty he
has to be restricted to "causal" access to the aircraft. Rule of thumb
in the industry is that if the pilot has his own set of keys then its
probably not "casual access".

-Robert

Robert M. Gary wrote:
B A R R Y wrote:
N2310D wrote:
The owner lists all five pilots on the policy. The pilots pay an equal
share of the premium cost. The insurance company is happy with the
arrangement.

That makes sense.

It's also less informal than I originally would have thought, because
all of you ARE listed together on paper somewhere.

You have to be. For a pilot to be covered under the open warranty he
has to be restricted to "causal" access to the aircraft. Rule of thumb
in the industry is that if the pilot has his own set of keys then its
probably not "casual access".

That's how I understand it, and that's how my two owner aircraft is set
up. We both coughed up 1/2 the equity, it's registered to both of us,
etc...

However, N2310D's original description sounded a lot like a single owner
renting or bartering blocks of time to cover his ownership costs.

B A R R Y wrote:
Robert M. Gary wrote:
That's how I understand it, and that's how my two owner aircraft is set
up. We both coughed up 1/2 the equity, it's registered to both of us,
etc...

However, N2310D's original description sounded a lot like a single owner
renting or bartering blocks of time to cover his ownership costs.

Yea, you'd want to be real careful with that, both from the FAA and the
insurance side. You don't want it to look like you're renting the plane
out (even if you're only renting to a few pilots).

-Robert

If you have a partnership on an airplane with three
partners... and two partners are flying together and crash
and die, also killing some people on the ground...
The surviving partner is legally liable as the owner of the
airplane... His personal assets are on the line;home,
businesses, everything.

Incorporation and owning shares protects your assets.




"Robert M. Gary" wrote in message
oups.com...
|
| B A R R Y wrote:
| Robert M. Gary wrote:
| That's how I understand it, and that's how my two owner
aircraft is set
| up. We both coughed up 1/2 the equity, it's registered
to both of us,
| etc...
|
| However, N2310D's original description sounded a lot
like a single owner
| renting or bartering blocks of time to cover his
ownership costs.
|
| Yea, you'd want to be real careful with that, both from
the FAA and the
| insurance side. You don't want it to look like you're
renting the plane
| out (even if you're only renting to a few pilots).
|
| -Robert
|

"Jim Macklin" wrote in message
...
[...]
Incorporation and owning shares protects your assets.

Incorporation and owning shares MAY protect your assets. If you are in any
way principally responsible for the maintenance and operation of the
partnership and airplane, the corporate veil may not protect you.

Jim Macklin wrote:
If you have a partnership on an airplane with three
partners... and two partners are flying together and crash
and die, also killing some people on the ground...
The surviving partner is legally liable as the owner of the
airplane... His personal assets are on the line;home,
businesses, everything.

Incorporation and owning shares protects your assets.

*maybe*. A good friend of mine was actually in that situation and the
judge dismissed him from the case because he said his ownership in the
airplane didn't make him liable for the accident.

However, I did incorporate my airplane. I'm not sure I would do it
again. In California its a **LOT** of work. The tax on the corporation
minimum tax (regardless of what state you incorporate in) is $800/yr if
the corp has *ANY* visibility in the state of CA. Waving that requires
about 2" of paperwork (I've done it twice now). Plus you must file a
Secretary of State statement every year declaring officers and pay an
addition $25. Forgetting to do that will result in going to jail.

-Robert

Jim Macklin wrote:

Incorporation and owning shares protects your assets.



Right!

And if you're not personally involved in the accident, a simple LLC can
offer plenty of protection for a reasonable price, both in dollars and
effort. The LLC can go a long way toward protecting personal assets if
one of the other owners has a problem.

I prefer to spend the extra effort to set myself up for happy-happy
endings. In other words, I'm happy if it works out well, and I'm as
happy as possible if it works out poorly. Not possible to get set up
that way? The deal probably isn't a good idea.