How to Transfer an Aircraft Into an LLC or Trust

Many aircraft owners hold their aircraft in an LLC or trust for liability protection and estate planning. Here's how the transfer process works, what the FAA requires, and common mistakes to avoid.

How to Transfer an Aircraft Into an LLC or Trust

Holding an aircraft in an LLC or trust rather than in your personal name is common among aircraft owners — for liability protection, estate planning, privacy, and in some cases tax treatment. If you're considering making this change, here's what the FAA process looks like and what to watch out for.

Why Transfer to an LLC or Trust?

Liability protection: An LLC creates a legal separation between aircraft liability and your personal assets. If someone is injured in an aircraft accident and sues, they're suing the LLC — not you personally. The protection is not absolute and depends on properly maintained corporate formalities, but it adds a meaningful layer.

Privacy: Aircraft registered to an LLC or trust list the entity name in the public FAA registry rather than your personal name. For individuals who prefer not to have their name publicly searchable by N-number, this is meaningful.

Estate planning: Holding aircraft in a trust simplifies transfer at death and can avoid probate complications.

Multiple owners: LLCs work well for partnership ownership arrangements — the aircraft is registered to the LLC, and ownership percentages are reflected in the operating agreement rather than on the FAA certificate.

What the Transfer Requires

Transferring an aircraft from personal ownership to an LLC or trust is a title transfer — the same fundamental process as selling the aircraft. It requires:

FAA Form 8050-2 (Bill of Sale): Transfer of title from you as an individual to the entity. You're both the seller (as individual) and effectively the buyer (as LLC/trust controller). The purchase price is typically documented as nominal (e.g., $1) for a transfer to your own entity.

FAA Form 8050-1 (Application for Registration): Registration application in the name of the LLC or trust, signed by an authorized representative.

Supporting entity documentation: The FAA requires documentation showing the entity is validly formed and the signatory has authority. For an LLC, this typically means a copy of the articles of organization and an operating agreement or manager certificate. For a trust, a copy of the trust document or a trustee certificate.

$5 registration fee: Same as any registration application.

Citizenship Requirements

This is the part that trips up many aircraft owners. For an aircraft to be registered in the US, the owner must be a US citizen or meet specific criteria for resident aliens and entities.

For an LLC: If any non-US citizen owns more than 25% of the LLC, the LLC may not qualify as a US citizen for registration purposes. Before transferring to an LLC with foreign partners, verify the citizenship requirements carefully.

For a trust: The trustee must be a US citizen. Using a foreign trustee disqualifies the trust for US registration.

The Transfer Process Through Aeradex

Aeradex handles aircraft title transfers including LLC and trust transfers at aeradex.com. The process:

You upload your current registration and provide the receiving entity's information
Aeradex generates pre-filled Forms 8050-1 and 8050-2
You review and e-sign
Aeradex submits to the FAA CARES system
You receive a temporary operating authorization immediately and your new registration within 4-8 weeks

Pricing: $99 as a standalone transfer, or included free with an Aeradex Pro subscription ($175/year).

Common Mistakes

Not updating insurance: When title transfers to an LLC, your existing personal aviation insurance policy may no longer cover the aircraft. Update your insurance before flying under the new registration.

Operating agreement gaps: If the LLC is for shared ownership, the operating agreement should address scheduling, maintenance cost allocation, insurance requirements, and buyout procedures. Don't neglect the operating agreement in favor of just getting the FAA paperwork done.

Forgetting the hangar lease: If the aircraft is based at an airport under a hangar lease in your personal name, you'll likely need to update the lease to reflect the LLC as the lessee.

State taxes: In some states, a transfer to an LLC — even a transfer to your own LLC — can trigger a sales or use tax event. Check your state's treatment before proceeding.

Transferring to an LLC or trust is a useful ownership strategy for many aircraft owners. The FAA paperwork is manageable; the planning around insurance, operating agreements, and state tax treatment is where most pilots benefit from doing their homework first.