Partnership question

Hello,
I'm looking for some general advice on my aircraft partnership situation. I own 50% of a Mooney while I complete my RV (please don't judge me, it goes fast). My partner has recently asked if his son can also get on the insurance and fly it. His son is 28 years old and has a high performance rating. I want to be a good partner and keep things amicable, but I'm not crazy about the idea. I feel like I'm taking on a 3rd partner but with no financial benefit. If my dad had a Mooney when I was 28, I'd be in it every weekend. So I'm concerned with the additional wear & tear on the craft. I would obviously get priority use when conflicts arise. This may be solved by having him kick-in a little $$ above the standard hourly rate that my partner and I charge ourselves for overhaul/annual slush money.
In addition to this, having another pilot into our partnership brings with it additional concern for legal liability. This young man will be flying with friends (non-family members) and if an accident occurs, his father and I can be held liable.
Thirdly, a mistake on his part (like a gear-up landing) will be a claim on my policy under my name. That can have a long lasting stigma on my premiums (right?).

Am I being paranoid? or a difficult partner? I need some feedback. What would you do?

Thanks!

So liability is easy, that's what insurance is for; you can't do a partnership without enough insurance so wrecking it means nobody cares. If you're doing it any other way, you're only causing yourself heart ache.


You should ask your current and potential partners to pay for 2/3rds of the operating costs. And you may want to consider a per-tach-hour fee for overhaul fund? Unless you don't care.

As for share... honestly, unless you want cash in hand, don't bother. But I don't ever do 50/50 partnerships. I try to do 2/3 - 1/3. One person owns 2/3 and does 1/3 of the maintenance and vise versa. This way, when push comes to shove, somebody wins on upgrade and maintenance decisions.

-Bruce

My take: If there are 3 people flying it regularly, then fixed expenses (including aircraft purchase) need to be split equally, and all 3 should be equal partners and registered owners.

If he wants to get his kid on the insurance and get him checked out in the plane so he can simply ferry the plane at your request, or something like that, then that's a different story.

Charging the kid more than his pro-rata share of expenses on a flight hour basis might get into "rental" territory real quick, and your insurance could run away scott free from any claim that might arise.

krw5927 said:

My take: If there are 3 people flying it regularly, then fixed expenses (including aircraft purchase) need to be split equally, and all 3 should be equal partners and registered owners.

If he wants to get his kid on the insurance and get him checked out in the plane so he can simply ferry the plane at your request, or something like that, then that's a different story.

Charging the kid more than his pro-rata share of expenses on a flight hour basis might get into "rental" territory real quick, and your insurance could run away scott free from any claim that might arise.

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Thr problem with the check out and "ferry only" restriction is that it can incrementally become usage at full partner level. How do you control it once the door is open?

mturnerb said:

The problem with the check out and "ferry only" restriction is that it can incrementally become usage at full partner level. How do you control it once the door is open?

Click to expand...

If it becomes a problem, simply talk to other partner about it with the expectation that he'll take care of the issue. If he fails, force the sale of your share or the aircraft as necessary per the partnership agreement.

Really, if that does become a problem, and the other partner doesn't take care of the issue, that partner was always going to do what he wanted anyway and let the kid fly the plane.

Let me get this straight, you're married and your spouse is asking you if it's ok for her boy friend to use the pool if he pays his share of the cost of a pool cleaner.... Do I have it about correct?

I wouldn't worry about your record with the insurance company if a partner had an accident. They aren't stupid.
Since a big cost of ownership is just for availability, you need to find put if the 28 year old is going to fly a little or a lot. If it's a lot, he should be a full partner, and buy 1/6 share from you, another 1/6 from his Dad.
You should charge each other (all 3) an hourly charge and/or a fixed monthly charge that is a fair representation of all costs, including hangar, engine reserve, maintenance, as well as gas and oil. If anyone leaves the partnership they can sell not only 1/3 the airplane but also 1/3 of the cash in the reserve fund.