When a private aircraft is registered with the FAA, the registered owner’s name and address become part of a public record. For many buyers, that’s not a concern. For others — high-net-worth individuals, public figures, corporate owners seeking confidentiality, and non-U.S. citizens who want FAA registration — an aircraft owner trust offers a solution that addresses both privacy and legal structure in a single vehicle.

Understanding how an aircraft owner trust works, when it’s useful, and what it actually accomplishes (and doesn’t accomplish) helps buyers make the right ownership structure decision from the start.

What Is an Aircraft Owner Trust?

An aircraft owner trust is a legal arrangement in which a trustee — typically a specialized trust company or financial institution — holds legal title to an aircraft on behalf of a beneficial owner. The trust itself is the registered owner of record with the FAA. The beneficial owner controls and uses the aircraft, but their name does not appear in the FAA aircraft registry.

The trust operates under a trust agreement that defines the relationship between the trustee and the beneficial owner, including the terms under which the trustee holds title, the authority of the beneficial owner over the aircraft, and the conditions under which the trust can be dissolved or the aircraft transferred.

From an operational standpoint, nothing changes. The aircraft is flown, insured, and maintained exactly as it would be under any other ownership structure. The difference is entirely in how title is held and who appears in the public record.

Why Buyers Use Registration Trusts

There are two primary reasons buyers turn to aircraft owner trusts: privacy and FAA registration eligibility.

Privacy. The FAA Aircraft Registry is publicly searchable. Anyone can look up an N-number and see the registered owner’s name and address. For private individuals, executives at publicly traded companies, celebrities, athletes, and others who prefer that their aircraft ownership not be a matter of public record, a trust structure puts the trustee’s name on the registration rather than their own. The trust itself doesn’t reveal the beneficial owner’s identity.

It’s worth being precise about what this privacy does and does not provide. An aircraft trust does not make ownership invisible to government agencies, law enforcement, the IRS, or parties with legal cause to investigate. Tax filings, insurance documents, and legal proceedings may all require disclosure of the beneficial owner’s identity. The privacy benefit is specifically from the public FAA registry — it limits casual lookups and media exposure, not government inquiry.

FAA Registration Eligibility for Non-U.S. Citizens. FAA registration requires that the registered owner meet specific citizenship requirements under 49 U.S.C. § 40102. Non-U.S. citizens who are permanent residents, foreign nationals, or entities with foreign ownership components that exceed allowable thresholds cannot directly register an aircraft with the FAA.

A U.S.-citizen trustee or trust company can hold FAA title on behalf of a non-citizen beneficial owner, allowing the aircraft to carry an N-number and operate under FAA oversight. This is a commonly used structure for international buyers who want U.S. registration — often preferred for reasons of global recognition, crew familiarity, insurance market access, and resale value — but who don’t qualify as direct registrants.

How an Aircraft Trust Is Structured

The mechanics are relatively straightforward. A trust company that is an FAA-eligible U.S. citizen establishes a trust, with the aircraft as the trust property. The trust agreement defines the beneficial owner’s rights — typically including the right to use the aircraft, direct its operation, approve maintenance and modifications, and instruct the trustee to sell or transfer the aircraft at any time.

The trustee holds title in name only. They are not involved in day-to-day operations, do not have substantive control over the aircraft, and are compensated through an annual trust administration fee — typically several hundred to a few thousand dollars per year depending on the trust company and the complexity of the arrangement.

The aircraft is registered with the FAA in the name of the trust (often something like “XYZ Trust Company, as trustee”), and the N-number is issued to that registered owner. The trust agreement is filed with the FAA as part of the registration.

Aircraft Trusts vs. LLCs: Understanding the Difference

Buyers often compare aircraft trusts to LLC ownership, and both are commonly used in private aviation. They serve different purposes.

An LLC is primarily a liability protection and business structure vehicle. It creates a legal entity that owns the aircraft and separates the aircraft’s liabilities from the personal assets of the owner-members. The LLC’s name appears in the FAA registry, which does provide some privacy (the entity name rather than the individual’s name is public), but it doesn’t provide the same level of privacy as a trust, and the LLC’s registered agent information and state filings may be publicly accessible depending on the state of formation.

A registration trust is primarily a title-holding vehicle for privacy or FAA eligibility purposes. It doesn’t provide the same liability protection that an LLC structure does.

Many buyers use both: an LLC as the beneficial owner of an aircraft held in trust by a trust company. This structure layers the liability protection of the LLC with the FAA-registry privacy of the trust. It is a common and well-established approach for buyers who want both.

The right structure depends on the buyer’s specific circumstances — citizenship, privacy requirements, liability exposure, operational model, and how the aircraft will be used. This is an area where an aviation attorney’s guidance is worth the investment.

Costs and Administration

Aircraft registration trusts are not expensive to establish or maintain relative to the cost of the aircraft itself. Initial setup fees at established trust companies typically run a few hundred to a couple thousand dollars. Annual administration fees are similarly modest — often in the $500 to $2,000 range depending on the trust company and the scope of services.

Trust administration is generally low-maintenance from the beneficial owner’s perspective. The trust company handles FAA registration renewal and title-related paperwork. The beneficial owner manages everything else — operations, insurance, maintenance, crew — as they would under any other ownership structure.

Dissolution is equally straightforward. When the aircraft is sold or the trust is no longer needed, the trustee executes the transfer documents at the beneficial owner’s direction, and the trust is wound down.

Is a Trust the Right Structure for You?

An aircraft registration trust is the right structure for buyers who have a specific need it addresses: FAA registration eligibility as a non-U.S. citizen, or a meaningful privacy interest in keeping their ownership out of the public record.

For buyers who don’t have those needs, an LLC is often the more practical and cost-effective structure. For buyers who have both privacy and liability concerns, a trust-over-LLC arrangement is worth discussing with an aviation attorney before closing.

The ownership structure decision is one of the least glamorous parts of an aircraft acquisition and one of the most consequential. Getting it right at the outset saves meaningful time and cost compared to restructuring after the fact.

Questions about how to structure an aircraft acquisition? Holstein Aviation can connect you with the right legal and advisory resources to make sure your ownership structure fits your situation from day one. Contact us to get started.