The Liability of Owning an Airplane

By Michael Bell Wednesday, May 19, 2010

Every day, thousands of people travel by airplane, but only a few of them own their own plane. Ever wonder how many airplanes U.S. Airways owns? Or Delta? Continental? American Airlines? The answer is zero. No airline owns its own planes. Airlines are structured as multiple entity operations with a central operating company that leases each airplane from its own separate entity.

Why? Although airplanes are one of the safest ways to travel, accidents do happen. If you own an airplane, you should consider using this same technique to maximize your liability protection. By owning an airplane in a Delaware LLC, you shield your personal assets from creditors in case of an accident and/or lawsuit. Let's take a look at how it works.

Bill, the owner of an airplane, calls up Harvard Business Services and asks, “How do I protect my other assets from liability that may arise from my plane? Is a Delaware LLC one of the best asset protection entities?”

Yes, it is, Bill, and here’s how we can help:

  • We can form a Delaware LLC for you, which will own the plane and provide you with asset protection.
  • We can form separate LLCs for your other major assets, to keep them out of your name alone.
  • If you are sued for an accident, we can supply you with Certificates of Good Standing proving the validity of your multi-entity structure. With the strongest asset protection by law, a Delaware LLC will help provide another layer of protection that will make lawyers reconsider suing you personally.
  • If you own a home, having a Delaware LLC could help provide protection from someone coming after your home and causing you to lose it. Also, be sure to check your state’s Homestead Laws, as these laws vary from state to state.
  • If you own any other real estate, such as a farm or beach house, be sure to put these in separate Delaware LLCs as well. This will place a metaphorical brick wall around each individual asset you own, and it will help you with your estate planning as well.
  • There may also be tax advantages to using multiple entities, depending on your individual tax bracket and situation. For tax information, you should consult with your accountant or tax professional.

Many of the major airline companies worldwide are incorporated here in Delaware to protect their assets. Why Delaware? Because Delaware’s legal infrastructure will stand behind you if you’re sued.

We offer detailed information on how Harvard Business Services, Inc. can provide asset protection for airplane owners.

We also understand the special needs of an aircraft owner, and HBS offers a unique FAA Mail Forwarding Service.

To start protecting your assets, call Harvard Business Services, Inc at 302-645-7400 to get your aircraft and other major assets into separate Delaware LLCs today. 

*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.

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