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N-reg in a trust (merged)

In what way is it "dedicated"?

Administrator
Shoreham EGKA, United Kingdom

It is a company that I named and only has my aircraft in it. I am also the beneficial owner of the asset.

EGTK Oxford

I was with SAC, I found them very helpful. I moved 18 months ago to IAS, who again I find very helpful, but more cost effective. One other small point was that my name appears on the trust with IAS, where it did not with SAC.<

SAC I know, AG corp also who is IAS..?

EBST

Why do bizjet owners nearly always go for the expensive solutions?

Perhaps the Delaware company route gives better protection from the death of the trustee?

Administrator
Shoreham EGKA, United Kingdom

My key suggestion is to avoid AG Corp. I am dealing with them now - for the seller they are being a pain in the backside.

Why do bizjet owners nearly always go for the expensive solutions?

Because the financial implications of a trustee problem on a $10mn jet are slightly different from those on a TB20.

EGTK Oxford

I am dealing with them now - for the seller they are being a pain in the backside.

In what way?

The "only" thing the trustee can really do is obstruct the sale of the aircraft.

The trustee (if a sole person) can also die, which invalidates the CofR and grounds the aircraft.

Because the financial implications of a trustee problem on a $10mn jet are slightly different from those on a TB20.

Can you elaborate?

Administrator
Shoreham EGKA, United Kingdom

Can you elaborate?

Let's say there is a a trustee problem which we all accept has a low probability (say 0.1%). Your expected loss on a TB20 is what $200? On a jet of that value it is $10,000. Is it worth spending an extra $500 to remove that risk?

Will elaborate later on the AG stuff.

EGTK Oxford

I have found AvCorp to be extremely expensive, and have advised the new owner of my aircraft to go to SAC. Cheers, Sam.

Your expected loss on a TB20 is what $200? On a jet of that value it is $10,000. Is it worth spending an extra $500 to remove that risk?

Not really, because a 200k TB20 is worth as much to somebody with 200k as a 20M jet is worth to somebody with 20M.

Neither wants to lose it.

The only difference I see is that if the trustee of say SAC dies (as indeed happened a few years ago when Warren Chmura died) you have to hope that the trust passes to another US citizen (or green card holder) ASAP.

Whereas with the standard Delaware company where 75% is held by US lawyers (or any US citizen, but probably a partner in the trust company), if one the lawyers kicks the bucket, they just stick another one in there.

I also think a LOT of 20M jet owners want to hide their identity and a company is the best way to do that. Many corporates do that, for PR reasons. One of my customers is busy shafting their suppliers for every penny, and they are not telling anybody they have just bought a £20M jet. But the FAA doesn't like trust arrangements which conceal the identity of the beneficial owner.

I asked Warren what would happen if he died and he said it would pass to his brother, and this is in fact what happened.

My guess is that if you seriously upset the proprietors of either trust arrangement (not paying bills and then threatening spurious legal action, or being generally obnoxious as some people naturally are, is a popular way to do it, according to postings elsewhere) then they may well drag their feet when the beneficial owner wants to sell the plane.

The trustee will obviously want all his bills, interest and any other dues and overdues paid off in full before he agrees to the transfer, and maybe that is the case with your seller. You hear only one side of the story.

A while ago I spoke to the top man at UK's biggest aviation insurer and he said problems with trusts are extremely rare, but he added one cannot insure against them.

When I was buying the TB20 in 2002, I was a fresh product of the UK PPL training establishment so knew nothing about useful operational stuff (e.g. N-reg), but Air Touring got that zero-VAT Danish lawyer to phone me. He wanted what I thought was a huge sum but in retrospect it would have been the best route. I then spoke to Avcorp who wanted something like £2k. In the end I stayed on G-reg for 3 years, and it was only when an experienced pilot (STOLman on here) told me about the N-reg option that I "saw the light"

Administrator
Shoreham EGKA, United Kingdom

I think Avcorp are very helpful. They aren't the cheapest but I think they are excellent. SAC may be as well - never used them.

Do I think there is a significant issue using a pooled trust? No.

And Peter, I know both sides of the story.

EGTK Oxford
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