Asset protection

Whether your vessel/plane is for business or leisure, safeguarding such a valuable investment is essential.

This guide outlines key information on aircraft asset protection and the best options available to you.

What is an Asset Protection?

Asset protection refers to methods used to shield valuable assets from lawsuits, divorce settlements, or other legal challenges.

It can also help in reducing tax liability.

Why Aircraft/Yacht Owners Need Asset Protection

Considering the significant investment your airplane represents, the last thing you want is to lose it in a legal dispute or due to a creditor’s claim.

Asset protection helps secure your plane from these risks.

Moreover, it ensures that, after your death, your beneficiaries can inherit the aircraft without the delays and costs of probate.

Without proper planning, your assett might end up in the wrong hands, or be sold to cover your debts.

Potential Risks for Yacht/Aircraft Owners and How Protection Can Help

Failing to safeguard your aircraft is like leaving a valuable possession vulnerable. Without the right precautions, you may encounter risks such as:

Liability Issues: If you allow others to use your plane and an accident happens, you could be held personally responsible if the aircraft is registered in your name.

Theft or Damage: Planes and yachts are expensive assets that require comprehensive insurance. Without it, the financial loss from damage or theft could be significant.

Neglected Maintenance: Aircraft require regular upkeep. Neglecting maintenance can lead to breakdowns, accidents, and even legal trouble if you’re deemed negligent.

Tax Complexities: Depending on how and where your aircraft is used or stored, tax liabilities can quickly become complicated and expensive.

Strategies to Protect Your Aircraft/Yacht Investment

Now that you’re aware of the risks, here are some strategies to secure your aircraft:

Aircraft/Yacht Insurance: Just as you insure a car, having the right coverage for your plane protects you from claims after an accident. Make sure to assess your assets, usage, and liability needs when choosing a policy.

LLC Ownership: Registering the vessel under a limited liability company (LLC) separates your personal assets from potential legal claims, ensuring only the LLC faces liability.

Trusts for Non-Citizens: For foreign nationals, registering the aircraft through a trust allows you to maintain control while complying with U.S. regulations.

Enhanced Security: Storing your aircraft in a secure hangar with 24/7 surveillance or installing GPS tracking systems can deter theft and provide peace of mind.

Financial Safeguards and Planning

Beyond basic asset protection, consider these financial strategies:

Depreciation Deductions: By claiming depreciation on your aircraft, you can reduce your taxable income and recover some of the costs over time.

Flexible Financing: Various financing options, including loans from commercial banks or leasing agreements, allow you to manage your aircraft investment without undue risk.

Tax Management: Work with an experienced tax advisor who understands aircraft ownership to avoid unexpected tax burdens on the purchase, use, or sale of your plane.