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Old 02-03-2017, 07:35   #1
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Titling boat in a trust

Hi all-
Ready to buy my next sailboat. Has anyone purchase a boat using a personal property trust? Interested in any problems that came up with this kind of ownership entity. The boat is Coast Guard documented, so the govt. is watching.

My goal is to have liability protection and some level of anonymity as to ownership.

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Old 02-03-2017, 09:05   #2
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Re: Titling boat in a trust

If the goal is anonymity then go for it. A PPT will easily allow you to title in whatever name you choose. But they are worthless for liability shielding.

Even moving to an irrevocable trust is only of limited value. Since most maritime liability would be personal and in rem. in other words a claimant can sue you, and the boat seperatly in the same action, then collect from whichever is easiest to collect from.

Note that this changes with full time paid crew onboard to some degree. But if you are in this arena you need to speak with an attorney specifically on your facts.
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Old 06-03-2017, 08:02   #3
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Re: Titling boat in a trust

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If the goal is anonymity then go for it. A PPT will easily allow you to title in whatever name you choose. But they are worthless for liability shielding.

Even moving to an irrevocable trust is only of limited value. Since most maritime liability would be personal and in rem. in other words a claimant can sue you, and the boat seperatly in the same action, then collect from whichever is easiest to collect from.

Note that this changes with full time paid crew onboard to some degree. But if you are in this arena you need to speak with an attorney specifically on your facts.
Thanks and noted, but my general view is "if they can't find you, they can't hit you."

I don't intend to shirk a legal responsibility and I am insured, but I also don't see any reason to make it easy for an attorney to know who to name in a suit.

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Old 06-03-2017, 08:17   #4
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Re: Titling boat in a trust

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Originally Posted by DreaminFred View Post
Thanks and noted, but my general view is "if they can't find you, they can't hit you."

I don't intend to shirk a legal responsibility and I am insured, but I also don't see any reason to make it easy for an attorney to know who to name in a suit.

F
An attorney doesn't have to know. They sue the boat and the ownership on the USCG document (the trust) and, if successful, create liabilities for each.

A lien can be attached against the boat and it will show at the USCG. You could not sell without satisfying it.

Depending on the nature of the suit, the boat could possibly be arrested and auctioned to satisfy judgement.

This assumes a boat related lawsuit. For a personal lawsuit you would most likely have to declare assets. You could possibly not admit ownership at that point but it seems like a pretty big risk.

As been stated, probably best to consult a maritime attorney.
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Old 06-03-2017, 08:26   #5
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Re: Titling boat in a trust

I am left wondering what it is that you plan to do with your boat that requires hiding the ownership.


Most of us title or document our boats in our own names or living trusts. It seems to work for most folks.


However, if this is something you really feel the need to do, you should be talking to a real lawyer, not asking regular folks on a boating forum.
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Old 06-03-2017, 11:25   #6
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Re: Titling boat in a trust

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An attorney doesn't have to know. They sue the boat and the ownership on the USCG document (the trust) and, if successful, create liabilities for each.

A lien can be attached against the boat and it will show at the USCG. You could not sell without satisfying it.

Depending on the nature of the suit, the boat could possibly be arrested and auctioned to satisfy judgement.

This assumes a boat related lawsuit. For a personal lawsuit you would most likely have to declare assets. You could possibly not admit ownership at that point but it seems like a pretty big risk.

As been stated, probably best to consult a maritime attorney.
Not only can an attorney seize the boat, but getting to the underlying ownership isn't exactly rocket science. The USCG documentation process requires listing allo of the principles of a vessel by name and addresss when it's documented. For vessels held by a trust you have to disclose all the trustee said and all the beneficiaries.

So if your vessel is being sued it is trivially easy to get the name of the person who is liable to sue them directly as well.
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Old 06-03-2017, 11:32   #7
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Re: Titling boat in a trust

Would having the boat titled via a trust make customs & borders proceedures moe complicated? And if so what kinds of extra hoops would one then commonly need to jump through when entering/exiting a port (country)?
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Old 06-03-2017, 11:42   #8
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Re: Titling boat in a trust

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Would having the boat titled via a trust make customs & borders proceedures moe complicated? And if so what kinds of extra hoops would one then commonly need to jump through when entering/exiting a port (country)?
I don't know about entering ports, but if you are a "trustee", you speak for and can act for the trust. I just purchased a car and titled it in my trust's name. I should have had a rubber stamp, but other than that, it's just like putting it in a person's name.

Again though, legal advice is best asked of an actual lawyer, not someone on a boating forum..
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Old 06-03-2017, 18:03   #9
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Re: Titling boat in a trust

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Would having the boat titled via a trust make customs & borders proceedures moe complicated? And if so what kinds of extra hoops would one then commonly need to jump through when entering/exiting a port (country)?
Sure. Starting point is that, loosely speaking, many (if not most) countries will have different and separate requirements to let foreign boats into their waters free of taxes for a limited period depending on whether they are there for "work" or "vacation". Try checking into Brazil with a US-flagged boat with title that is not traceable to someone onboard buy plans to stay more than a month and let me know how it goes. I do not blame them, they do not like boats doing illegal charter work.
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Old 06-03-2017, 18:29   #10
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Re: Titling boat in a trust

If you don't want ownership known, do it as a corporation in Delaware or the BVI's / Caymans. If you really want to get complicated, have a corporation start another corporation. Or, just get better insurance.
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Old 07-03-2017, 06:06   #11
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Re: Titling boat in a trust

So, to summarize, you can't escape liability by using a trust, LLC, whatever. You can achieve some degree of anonymity, but even that can be penetrated by someone who is willing to put in enough effort. What's more, if you think the anonymity will help you in some way with liability, it won't.

There are a number of very valid tax reasons for owning a boat through a trust or LLC, but if these don't apply to you then you are probably just wasting time and money by going this route. You need to consult an attorney and/or tax professional, before you even THINK about proceeding with this. Internet tax and legal advice is worth exactly what you pay for it -- NOTHING!

Good luck.
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Old 07-03-2017, 06:37   #12
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Re: Titling boat in a trust

Some states do not require public disclosure of the beneficiaries. Those may be the states to look into when setting up a trust.

Now, as pointed out earlier, when you will need to prove a solid connection between you and the boat this may come back to haunt you. Other than those instances perhaps this would be a partial achievement of your goals. As in real estate, any asset ownership by trust, LLC, corp, etc achieves primarily two goals: 1 - limit the liability to the value of that particular asset (less any existing liens, etc) and 2 - shields the actual owner(s) from personal liability as well as protecting their other assets from claims which arose out of their ownership of that first asset. With a boat #2 would not work as to the personal liability if you are in fact in control of the vessel during the incident, injury, etc.

As far as achieving a perfect or even workable anonymity - very doubtful it can be done without running afoul of the IRS. Kind of a "catch-22" situation - if the IRS cannot easily trace you to your asset it means you are doing something illegal (at least in their eyes). And if they can - it means that most LEAs and PIs can too.
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Old 07-03-2017, 09:41   #13
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Re: Titling boat in a trust

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Originally Posted by Palarran View Post
If you don't want ownership known, do it as a corporation in Delaware or the BVI's / Caymans. If you really want to get complicated, have a corporation start another corporation. Or, just get better insurance.
This raises a very big issue. If you do own a vessel in a trust, really if you own any major asset I need a trust. You need to be very careful about how your insurance is written. It is not uncommon for people with revocable trusts to have a claim that is eventually denied because the insurance was taken out for 'asset A owned by person' when really 'asset A' is owned by the trust. I have seen the cases where people lost millions due to mis-stating this. It generally won't effect rates, but it is critically important to make sure all the paperwork is in order.

It's one reason I recommend to my clients that even personal revocable trusts hire a corporate trustee. If you mess up you loose all your stuff, if I mess up you can sue my professional liability carrier.
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