[WSBAPT] Charitable Donation of "Kit" Airplane

Mon Oct 24 19:57:43 PDT 2016

Wow.

This is really helpful.

Thank you so much, both Tim and Kevin.

The problem is that this estate is clearly in the 706 Return category, with assets in excess of $5.45M, and a death that took place less than a month ago.  So, we are far from being in a situation where we are even close to being judgment proof.

The bug-a-boo in all of this is the fact that, per the CPA's advice, we have sought a valuation of the kit airplane as of the date of death, and the figure $42,000.00 has been supplied by the appraiser.  Now, it appears that we could never expect to net full value for the airplane since the transfer of the airplane involves much more expensive risk than the benefit that gaining dollars from its sale would garner for the Estate.  I cannot imagine that an insurance company would easily (or cheaply) provide insurance on what, in essence, was a DIY project.  It is not as if the Decedent's workplace bore a sign saying BOEING on the wall, nor did he employ the helpful quality control people that a major company would have in its employ, much less any major testing.  (All we have is that the Decedent actually flew it himself, and, in fact, he flew it from the Sacramento area to the State of Washington when he moved up here about 22 years ago.)  That turns the airplane into the preverbal white elephant, if you will.

Now, in the background, we hear major gulping sounds coming from PR client.

Thank you again for your helpful thoughts.

Best Regards,

Doug Bratt

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Timothy L. Austin
Sent: Monday, October 24, 2016 6:10 PM
To: WSBA Probate & Trust Listserv
Cc: Kevin C. Austin
Subject: Re: [WSBAPT] Charitable Donation of "Kit" Airplane

Doug,

I ran this by my brother Kevin who is an aviation attorney, and here are his thoughts:

Aviation Transaction Attorney here:

Instead of the Manufacturer of the Kit,  the assembler of the kit (the decedent) is typically listed in the FAA files and registry, and has liability as "the manufacturer".   Because of this we typically recommend that a client cut up and bury a Kit Aircraft rather than selling it or giving it away.   And they also don't usually have adequate insurance to cover their manufacturing liability after the sale.   That issue may be minimized here - depending on the current status of the estate (if it is judgment proof by now?).

As far as normal liability of a seller for an aircraft sold  - there is less to worry about when you can dissipate the risks over time.   The things the Seller did himself or had done (such as maintenance) you may be still be responsible for in a crash, and you usually have the buyer indemnify, disclaim and covenant not to sue.   Eventually the buyer performs these events themselves and your liability to third parties dissipates.  We encourage our clients to retain some sort of "tail" policy (for a period of time and if available) for any liability that may come back and haunt them after the sale.

We have been involved in gifting of experimental aircraft to museums in the past - with the caveat that they not be returned to service.   The museums are likely to have their own documents and processes for this - but they are not necessarily favorable to the donor.

There are a number of other steps that could be taken to de-commission the aircraft - but all are costly versus the return benefit

Here is some social media regarding this discussion:  https://www.reddit.com/r/aviation/comments/3qzfmn/owner_destroys_rv8_after_losing_medical_to_avoid/

Here is the EAA's<http://www.eaa.org/en/eaa/aviation-communities-and-interests/homebuilt-aircraft-and-homebuilt-aircraft-kits/next-steps-after-plane-is-built/selling-and-buying-articles/part-1-protect-yourself-the-legal-risks-of-selling-the-aircraft-you-built> take on it.

Kevin

Kevin C. Austin | Aero Law Group PC
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Bellevue, WA 98004 | www.law.aero<http://www.law.aero/>

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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Douglas Bratt
Sent: Friday, October 21, 2016 4:12 PM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Charitable Donation of "Kit" Airplane

Hello Listmates:

A current estate has an unusual asset - a private airplane, put together from a kit, in the 1960's.  The airplane kit company is now out of business.

The plane was actually flown by the Decedent a number of years ago (but that is not what caused his death!)  It has not been flown since he traveled from the Sacramento to this state in the airplane, those many years ago.

It is a relic with some sort of value as a possible display item in a flight museum and the Decedent's son wants to go the donation route.

I now wonder if there should not be some sort of a hold harmless agreement to be signed by the recipient, related to any injuries or deaths caused by flying the plane (or attempting to fly the plane), anytime in the future.

Your thoughts??  (and suggested forms, if any of you have done anything similar in the past).

Thank you, and have a great weekend.

Regards,

Doug Bratt

Douglas J. Bratt
Lawyer

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