| Generating income is the primary goal of any | | | | lawyer, it is the LLC that is the named party in the |
| helicopter business. Equally important to operators and | | | | action. |
| investors is the desire to avoid personal financial liability | | | | The State of California requires the LLC to pay an |
| for the obligations of the business, particularly when the | | | | annual $800 franchise tax fee, the same as a |
| business deals with helicopter tours and charters. The | | | | corporation or limited partnership. This fee, however, |
| invention of the traditional corporation and more | | | | can be viewed as a yearly "insurance" premium, which |
| modern business entities such as the Limited Liability | | | | provides much more protection than private helicopter |
| Company, have created a risk barrier which | | | | insurance with an equivalent premium amount. The |
| encourages helicopter business ventures yet shields | | | | beneficial result is that the maximum financial exposure |
| the owners' personal assets from seizure. | | | | to the owner(s) of the LLC, including liability from acts |
| As a helicopter operator, you are subject to virtually | | | | of its employees, is limited to the helicopter and other |
| unlimited financial liability and exposure arising out of the | | | | assets held in the LLC, and nothing else. But the LLC |
| operation of your aircraft. Large lawsuit judgments | | | | will not shield your assets from probate and estate |
| against helicopter tour operators are becoming | | | | taxes the way a living trust can. |
| increasingly common. Without the protection of a | | | | The revocable living trust is a legal instrument that |
| Limited Liability Company (LLC), your home, vehicles, | | | | holds title to a person's personal assets and most titled |
| bank accounts, and other personal assets can be | | | | assets, including bank accounts, real estate, stocks, |
| swept away if there is an accident. | | | | LLC membership interests, etc. The living trust contains |
| Reorganizing your helicopter venture into a LLC can | | | | your instructions for the distribution of your assets |
| eliminate this risk to your personal assets. A properly | | | | after you die. Because a person's assets are |
| formed LLC is a separate and distinct business entity | | | | transferred to their revocable living trust during their |
| with its own taxpayer identification number. The LLC | | | | lifetime, probate is avoided entirely. After the person |
| becomes the owner of the individual rotorcraft. In much | | | | who established the living trust (the Trustor) dies, the |
| the same way as shareholders of a corporation are | | | | successor trustee(s), who are usually the grown up |
| protected from liability, a LLC will provide limited liability | | | | children or relatives of the Trustor, simply distribute the |
| to its owner(s) and shield their personal assets. Should | | | | trust assets to the designated beneficiaries in the trust |
| the owner(s) wish to manage the LLC's daily tour or | | | | agreement. Because the living trust eliminates probate |
| charter operations, either in full or in part, they will be | | | | and, under a variety of circumstances other than in |
| legally classified as employees of the LLC. Therefore, | | | | divorce, can greatly reduce estate taxes, it may be |
| the maximum financial exposure to the owner(s) of | | | | possible to pass on a much greater portion of your |
| the LLC, including exposure from acts of its pilot | | | | assets to your heirs. The living trust, unlike an LLC, |
| employees, is limited to the individual property held in | | | | however, is not designed to and in most cases cannot |
| the LLC, and nothing else. | | | | protect personal assets from exposure to lawsuit |
| Once your attorney completes and files the array of | | | | liability. |
| legal documents required for the initial formation of | | | | In conclusion, the LLC and living trust work together to |
| your LLC, and proper helicopter transfer documents, | | | | protect and preserve all your assets. These estate |
| you will no longer be personally liable for any debts or | | | | planning and asset protection instruments can be |
| judgments against the LLC. Utilizing the LLC eliminates | | | | instituted at the same time or independently of one |
| the double taxation and extensive formalities | | | | another, and each instrument can be modified or |
| associated with a traditional corporation. Perhaps the | | | | dissolved at any time by the owner. Given the |
| most obvious changes are that helicopter lease | | | | significant advantages of these legal instruments, they |
| agreements are between the LLC and the users, | | | | are regularly utilized by helicopter tour and charter |
| lease checks and tour payments are made payable to | | | | operators for the benefit of themselves and their heirs. |
| the LLC, and when legal actions are instituted by your | | | | |