Putting Boat into LLC or Trust

[s/v Beth]

Because my boat is with a charter company when I am not there, it is in a LLC. Cost were 30 dollars and about that much every year. The state had me walk though a few questions and generated the company (and forms) for me. Haven't seen a downside yet.

[Cheechako]

Might be a good idea to protect yourself from an environmental lawsuit if a Cigarette boat cuts you in half in the Keys.... he may have more lawyer money than you to prove his "innocence"!

[wolfenzee]

I want to put my boat in a trust so no one can put a lean on it. I don't want to loose my home, or the ability to register and/or re-flag it some where else because the over-priced US medical system and unexpected problem (or some other such thing) ran up a bill so high I could never pay it on my limited fixed income.....thus destroying any possibility of my life long dream which is about to happen.
I just recently went overboard (in 50Fwater) even though I was stable and could have been tended to at the local hospital, because admissions was closed the air lifted me to Seattle ($20,000 helicopter ride) and because regular beds were full put me in ICU for a couple of days(don't have the bill for that yet). After everything is said and done am looking at a bill of around $50,000 for everything, my annual income is $12,000

[Therapy]

Originally Posted by s/v Beth

Because my boat is with a charter company when I am not there, it is in a LLC. Cost were 30 dollars and about that much every year. The state had me walk though a few questions and generated the company (and forms) for me. Haven't seen a downside yet.

That is it? 30 bucks? What about having to file quarterly returns? And the big one every April? What about state? What about unemployment insurance payments? How do you do all that without an accountant?

[Lajos]

I'm currently looking at a catamaran registered in Canada, spoke with the brooker who is listing it, then hunted down the owned with just the boat name, I now have his full address, occupation, etc. If I make an offer on the boat and I can't seem to make the deal happen with the brooker I would definitely get in touch directly with the owner so that we could talk it over....
I'm not a crazy or a stalker but I understand your point about privacy, it's just to easy these days to look anyone up....

[hellosailor]

Trusts can be broken. Liens can be served on corporations.

If you want to be "judgement proof" then you lease a boat instead of owning it. Now it belongs to a leasing company, which you don't own any portion of, and you just have to figure out how to pay the monthly. Which you can structure as a 95% lease payment up front plus a dollar a month or other ridiculous but legal terms.

Spend an hour getting intimate with a tax attorney or accountant, because most of the magic elixirs you will find on the web and in books? Won't work once someone comes after the asset.

[Paul Elliott]

Originally Posted by wolfenzee

I want to put my boat in a trust so no one can put a lean on it. I don't want to loose my home, or the ability to register and/or re-flag it some where else because [...]

Having your boat in a trust, or for that matter a corporation or LLC, might protect your house and other assets from judgements against the trust / LLC/ etc, but they won't prevent someone from making a claim (and winning a judgement) against the assets of the trust (etc) for boat-related accidents and expenses. Also, if an LLC is your asset, then it can be attached in a judgement against you.

A trust can be arranged so that the assets of that trust are reasonably secure from debts and judgements you personally incur, but you must be the beneficiary of that trust, and I don't believe you can be the grantor of a trust where you are the beneficiary. If someone else owns the boat they could possibly put it in trust for your benefit, and it would have some protection.

You really need to discuss this with a lawyer with experience in this field. I could be mistaken, and I may have some details wrong, but I don't think this is going to work the way you want it to. I don't think any of these legal structures will protect your boat against mechanic's liens related to work done on the boat.

[David_Old_Jersey]

If you already have the debts / bills then a court will simply ignore any arrangements you put in place now.

Probably better off to sell the boat, and then spend the cash received (on living expenses, mostly in dribbles of cash) from now until folks come for you in court......even if a freind allows you to use "their" new boat......and the dribbles of cash were not actually all about living expenses. After the cases are over (and you go bankrupt?!), then you can save up hard - and buy your boat back. Need a good freind though!

[hellosailor]

"I don't think any of these legal structures will protect your boat against mechanic's liens related to work done on the boat."
I think US law and most international law follo older admiralty conventions, where the boat is treated "in rem" (against the thing itself, not the owner) and the boat itself is actually "arrested" if need be. YMMV wiith the venue.

[jeremiason]

Originally Posted by Hiracer

Bottom line, yes, you will have problems in foreign countries. Here in the USA, no issues. In fact, I've already searched and found several USCG documented yachts owned by trusts.

Given that USCG documentation is public information (name and address), I've concluded the most eloquent solution to privacy concerns is a private mail box. Maybe a revocable trust also, terminating if I sail off into the sunset.

I was a Captain of a Power Boat that was owned by a Trust the owner set up to protect his assests, so it can be done.

On the flip side, if your boat is in a Trust, LLC or some other legal enity, most countries will want you to prove you have legal possession of the vessel when first entering their county.


This is much easier if the Documentation has you name on it instead of the name of a LLC, Trust, etc...

I was buddy boating with anohter couple thru Central America. They had placed their boat as a LLC. The problem arose when they tried to check into Costa Rica. The Costa Ricans required the wife, who was the President of the LLC to prove who she said she was in relation to the Company.

Of course she didn't have the legal documents on board proving she was the President of the Company. She spent two days emailing and faxing, before she was able to come up with the legal papers that satisfied Costa Rica Customs.

They had no paperwork problems with Mexico, El Salvador or Nicagragua, who accepted the documentation as is.

We have been using St. Brendan's Isle Mail Services for the last three years. The USCG has no problem with PO Boxes or PMB.

[stillbuilding]

I have my yacht owned by a Hong Hong LLC and registered in Langkawi. No problems - just have everything documented. Could just as easily have used my BVI company which would limit the probing but i did not need that and would maybe be counterproductive for this project.

[svBeBe]

Originally Posted by Hiracer

Other than cost, what are the downsides?

If I sail in foreign countries, will this arrangement lead to problems?

I am not sure after reading this thread that you received a clear answer to the above. I do not have firsthand information, but I know the experience a close friend had with his LLC/Documentation. He was in the same ports at the same time for at least half of our circumnavigation.

Before he started his circumnavigation, our friend created an LLC which owned his boat because he was told it was a good idea on an Internet forum (name withheld).

He has been required to produce a corporate resolution on more than one occasion which granted him the power to make a specific decision regarding something for the boat. Some of the cases that I am personally aware of: new insurance, hauling out, and contract for transporting the vessel aboard a ship. In one case he had to get his signature on the corporate resolution notarized at the US Embassy in that country. My friend had a problem because he lost his corporate stamp, but generally in the 40+ countries we have visited so far, not too much more in the way of really big problems.

My friend told me that he wished that he had never listened to the advice given on the LLC because it had been more trouble than it was worth.

You can register your vessel in a number of tax-free countries such as Cook Islands or St. Vincent & the Grenadines. There is more than one advantage to having your boat registered outside the US. You will enjoy a lower cost of insurance and the ability to buy off-shore insurance. A few insurance companies like Groupama/France will insure US Documented vessels if the vessel is flagged in the USVI. However, the insurance is invalidated once the vessel in US coastal waters. I do not think you listed your destinations.

Hope this helps.

Bill

[David_Old_Jersey]

Originally Posted by svBeBe

Before he started his circumnavigation, our friend created an LLC which owned his boat because he was told it was a good idea on an Internet forum (name withheld).

Same as many other things in life - doing something badly often worse than not doing at all.....and that usually comes from ignorance and wishful thinking.

In the case of a company / LLC actually fairly easy to get your paperwork in order to cover all eventualities - the "trick" is to do it in advance. Of course everything costs (in effort and time as well as cash).

Short answer is: you only go that route if you know the benefits to you (for most there simply ain't any) and therefore have a reason to do the extra work involved than a simple reg in own name in own country.

[goboatingnow]

The fundemental problem with LLCs or company's is you really don't get definite answers until the Sh1te starts hitting the fan. Then you learn what you have done is correct, legal and useful. ( usually only 1 is right )

The trouble is most advice simply isn't definitive enough. ( even expert advice )

It is also generally repugnant to courts that see specific constructions to avoid debt repayment or attempting to put assets beyond the reach of the courts. This can cause untold problems in certain cases. Especially if its clear the function of the shelter was to specifically avoid such debts. Your email here doesn't help by the way.

Is consider carefully before proceeding. There are numerous legal constructions that people have wrapped up things in , believing it will somehow protect them. Usually that notion is quickly disabused when the brown stuff goes flying.

Dave

[denverd0n]

Originally Posted by jeremiason

I was a Captain of a Power Boat that was owned by a Trust the owner set up to protect his assests, so it can be done.

A trust can be setup, sure. Did anyone ever seriously pursue the owner, his boat, his assets? Just setting up the trust is the easy part. Do it just a little bit wrong, though, and it doesn't actually protect anything, if someone decides to put some real effort into coming after you.

Frankly, anyone who makes the decision to setup a trust, LLC, whatever, (or not to) based on what they read on an internet forum is an IDIOT!!! Get professional advice. Find someone who does this for a living, and who has successfully defended their work in court. Get THEIR advice, and only THEN make your decision.