When you purchase a private jet, one of the first decisions you’ll make — and one that has long-term consequences — is how to hold title to the aircraft. The jet ownership structure you choose affects your liability exposure, your tax position, your privacy, your estate planning, and how the aircraft is registered with the FAA.

Most buyers don’t think deeply about this question until they’re close to closing. That’s too late. The structure should be determined before the purchase agreement is signed, because changing it afterward is possible but creates unnecessary complication and cost.

Here’s a clear breakdown of the three primary options: individual title, LLC, and trust.

Individual Title

Holding an aircraft in your own name is the simplest structure. The FAA registration is in your name. The title is in your name. There are no entity formation costs, no annual maintenance requirements, and no additional administrative overhead.

For some buyers — particularly those using the aircraft exclusively for personal travel with no business purpose — individual title can be appropriate. But the simplicity comes with a meaningful tradeoff: personal liability exposure.

When an aircraft is titled in your name and something goes wrong — an accident, a liability claim from a passenger or a third party — your personal assets are directly in the line of fire. There’s no legal separation between you and the aircraft.

For most buyers, particularly those with significant personal wealth or business interests to protect, that exposure is unacceptable. The liability protection offered by an entity structure is usually worth the additional complexity.

The LLC

The limited liability company is by far the most common jet ownership structure, and for good reason. It provides liability protection, operational flexibility, and tax efficiency in a structure that’s relatively straightforward to establish and maintain.

Liability protection. When the aircraft is owned by an LLC, the liability associated with its operation is generally contained within the entity. Your personal assets are separated from claims arising from the aircraft, provided the LLC is properly maintained and not treated as an alter ego of the owner.

Tax flexibility. A single-member LLC is treated as a disregarded entity for tax purposes by default — meaning the income and expenses flow through to the owner’s personal return, with no separate entity-level tax. A multi-member LLC is taxed as a partnership by default. Either structure can also elect to be taxed as an S-Corp or C-Corp depending on the owner’s broader tax situation.

Business use deductions. If the aircraft is used for business purposes, the LLC structure makes it easier to document and substantiate those deductions — which can be significant, particularly in the early years of ownership when depreciation is most aggressive.

State of domicile. Where you form the LLC matters. Many aircraft owners form their LLCs in states with favorable laws and low fees — Delaware and Wyoming are common choices. The state of domicile affects the legal framework governing the entity, annual maintenance costs, and in some cases, sales and use tax exposure. This is an area where aviation-specific legal counsel is worth the investment.

One important note: an LLC provides liability protection only if it’s treated as a real, separate entity. That means a separate bank account, proper documentation of decisions, and no commingling of personal and business funds. An LLC that exists on paper but operates as an extension of the owner’s personal finances offers little protection when it’s actually tested.

The Trust

Aircraft trusts are used in two distinct contexts, and it’s worth understanding the difference.

FAA Registration Trusts. The FAA requires that aircraft registered in the United States be owned by U.S. citizens or resident aliens. Non-U.S. citizens who want to register an aircraft in the U.S. — which is often desirable for operational, financing, or insurance reasons — can do so through an FAA-approved registration trust. In this structure, a U.S. trustee holds title on behalf of the beneficial owner. The trust satisfies the FAA’s citizenship requirement while the non-citizen retains beneficial ownership and operational control.

Estate Planning Trusts. Some owners hold aircraft in trusts as part of a broader estate planning strategy. This can facilitate the transfer of the aircraft to heirs outside of probate, reduce estate tax exposure in certain structures, and provide privacy — since trust ownership isn’t always as easily searchable as individual or LLC ownership in public records.

Estate planning trusts for aircraft are more complex to administer and require coordination between your aviation attorney and your estate planning counsel. They’re not the right tool for every buyer, but for high-net-worth individuals with significant estates and a desire for privacy and smooth succession, they’re worth understanding.

Tax Considerations Across All Three Structures

Regardless of which structure you choose, the tax picture for aircraft ownership is complex and requires specialized advice from an aviation tax professional.

Key issues that apply across structures include:

• Depreciation. Aircraft can be depreciated aggressively in the early years of ownership under bonus depreciation provisions, but the rules around personal versus business use allocations are strict and heavily scrutinized by the IRS.
• Sales and use tax. The purchase of an aircraft triggers sales or use tax obligations in many states. How title is held, where the aircraft is based, and where it was purchased all affect the tax due. Structuring the transaction properly — including where and how closing occurs — can have a material impact on the tax bill.
• SIFL imputation. If the aircraft is owned through a business entity and used for personal travel, the IRS requires that a Standard Industry Fare Level (SIFL) value be imputed as income to the user. This is a frequently misunderstood area of aircraft taxation.

Aviation taxation is a specialized discipline. The attorneys and accountants who handle it well are not the same as general business counsel. Engaging advisors with specific aircraft ownership experience before you close is one of the highest-return steps a buyer can take.

The Bottom Line

For most U.S.-based buyers, an LLC is the right starting point — it provides liability protection, tax flexibility, and operational clarity at a manageable administrative cost. The specifics of your situation — your tax position, your estate planning goals, whether you have co-owners, and whether you have international connections — may point toward a trust structure or a hybrid approach. We can put you in contact with trusted aviation legal and aviation tax professionals to advise you properly.

What’s not advisable is making this decision quickly or without qualified counsel. The jet ownership structure you choose on day one shapes the ownership experience for as long as you hold the aircraft.

Holstein Aviation works with buyers and their advisors throughout the acquisition process, including guidance on ownership structure. Contact us to discuss your situation.