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Old 04-23-2017, 08:04 AM   #21
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I need to be educated. Why use a trust and not have a full corporation own the boat?
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Old 04-23-2017, 11:05 AM   #22
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Our Living Trust is part of our overall financial/estate planning. It is a relatively easy, low-cost process to simplify the transfer of estate assets and avoid probate. It is not established as an ownership vehicle for the boat, but the boat, as an estate asset, is registered in the name of the Trust, just like our house, cars, etc.

I have no experience and minimal knowledge of establishing a corporation for boat ownership...
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Old 04-23-2017, 11:11 AM   #23
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I live in Florida and was told a trust can be sued for the assets in the trust. My boat is in corporate name and can only be sued by the value of the Corp. However I'm not a lawyers but have supported many of them.
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Old 04-23-2017, 11:27 AM   #24
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My lawyer said to have a proper will that included all the correct dispositions, properly title assets too, and then I didn't have to pay her to set up a trust....
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Old 04-23-2017, 11:58 AM   #25
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My understanding is a trust will avoid probate but a will won't. A trust has limited protection for a law suit but a corporation will protect everything owned to the limit of those assets. Therefor many of my assets are owned by a corporation and some of those are in a trust to make disposition easy upon death.
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Old 04-23-2017, 12:04 PM   #26
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I am pretty ignorant about wills and trusts. However one thing I do know is that the trust vs will decision is based largely upon your own state laws.
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Old 04-23-2017, 12:16 PM   #27
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The Trust wording issue was on the Bill of Sale, not the Exchange application. The Bill of Sale must be notarized. According to the USCG, the Trust cannot be the buyer, the Trustees must be the buyer on behalf of the Trust. However, on the Exchange application, only one Trustee can be designated as the Managing Owner. In my case (as in probably many other cases) my wife and I are the only two Trustees. This means that if I designate myself as the Managing Owner, my wife's name is nowhere on the Documentation. Even under the heading of Other Owners, she should not be designated since it is the Trust that owns the boat, not either of us. This means that if she were operating the boat without me on board (well within her capabilities) and had to prove ownership, it might end up very complicated. It means carrying an extra layer of paperwork to prove that she is a Trustee.

I have also been advised by the CG that her name and SSN must be on the Exchange somewhere, but it is not clear where.

I have found that working with different people gets you different answers...
It is my understanding that her name must be shown as other owners. The Trustee's are the constructive owners, one of whom must be the managing owner. Ownership would be shown as John Doe and Jane Doe, Trustees of the Doe Family Trust. Managing owner would be John Doe. Other owner would be Jane Doe.

It all depends on the way the trust is titled and the bill of sale must agree. It can't be John Doe, Trustee, one place and John Doe and Jane Doe another.

Different people will get you different answers and in some cases seemingly different answers but they're to different questions. I'd still advise a Marine Title Company.

The reason all trustee's must be identified and social security numbers provided is that each trustee must be legally someone who could document on their own, so essentially a US citizen.

As to carrying extra documents, most not individual ownerships require it. You must show support for the legal entity owning the boat and then authorization by parties of that legal entity with the rights to authorize of others to then operate the boat. Other owners do not automatically have that right, unless designated by the managing owner.

I've known people who had their boats in LLC's to run into issues with customs officials in other countries who didn't recognize an LLC, to them owners were either individual or corporations. When paperwork doesn't look exactly like what they're use to they can get confused.
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Old 04-23-2017, 12:29 PM   #28
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Trusts may have advantages in terms of estate planning. There are so many different types of trusts and rules vary by every state, so no generalized statements can be made.

Now, Bigfish is correct that a trust only provides limited asset protection but then so does a corporation. They both expose every thing else owned by the trust or corporation and protect everything not owned by the trust or corporation. Some people have multiple trusts for different items owned just as some have multiple corporations and LLC's.

In terms of boat ownership, all different types of entities have their pros and cons. For instance, Corporations must be set up and managed in such a way as to clearly be distinct, file tax returns, charge for use, etc. In home ownership, different entities may or may not retain homestead rights, both for property taxes and in the event of protection in a bankruptcy. Similarly, a lot of times personal property (including boats) may be exempt from property taxes while corporate property/business property is not.

Ownership of assets is best advised by a combination of legal expertise, estate planning expertise, and tax expertise, which may come in the form of one Attorney or may involve multiple individuals.

Once you get beyond individuals owning everything, it get's complicated.
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Old 04-23-2017, 12:44 PM   #29
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I am pretty ignorant about wills and trusts. However one thing I do know is that the trust vs will decision is based largely upon your own state laws.
That, and your assets as well as your desires as to what becomes of what you leave.

For us, it is simple as long as one of us is alive. However, at that point it becomes extremely complicated and we're always wanting to change/update it as life's circumstances change. Sometimes you think, what the heck I'll be dead, let them sort it out, but you realize that's not what you want nor fair to anyone.

It is amazing how some astute businessmen who you would expect to have everything worked out have been known to leave such a mess. For anyone in South Florida, the prime example is Joe Robbie. He built the Miami Dolphins and he built the stadium, Joe Robbie Stadium, all with his own funds. Most of his personal wealth was tied up in those things. His family had been actively involved with them as a well and loved the team. However, the team was worth far more than ever anticipated and estate taxes were due on it's value. The estate did not have anywhere close to the money to pay those estate taxes. So, it all had to be sold to pay the taxes and the family's involvement ended. Very sad consequences.

It happens to others too. Family farms often involved. Someone has hundreds of acres of farmland and pasture all of which they intend to stay in the family. One problem. They die and it's appraised for estate purposes as worth $20 million since it would be prime real estate for a housing and industrial development. End of family farm.

I know of a case of a family that kept prime land in a major metropolitan area as pasture. They raised everything from cows to emu to llama's, mainly to keep it taxed as farm land, which meant minimum property taxes. They said they'd never develop it, even though 1/4 acre lots in that area were selling for $50k and more. So people were shocked when suddenly they started developing it. Well, they did when they were advised as to what the estate taxes would be so figured they might as well go on and break it up, since when they died, their kids would have to.
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Old 04-23-2017, 04:17 PM   #30
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Joe Robbie was sad, we knew the family and it could have been avoided with Life Insurance (one of the few times I would suggest life insurance).

I would suggest you get an attorney that specializes in death, taxes and transfer of ownership (an estate attorney) to develop YOUR plan and then review it every few years as laws frequently change.

One problem you have with corporation is that you have fees each year, a trust avoids those fees but they don't protect you the same. Of course if you have limited assets and a boat not worth a whole lot it may not be worthwhile to protect those assets other than liability insurance.
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Old 04-23-2017, 04:40 PM   #31
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Joe Robbie was sad, we knew the family and it could have been avoided with Life Insurance (one of the few times I would suggest life insurance).

.
Actually not as easy to get the life insurance one might need for such a situation based on limits by insurance companies and in various states.
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Old 04-23-2017, 04:45 PM   #32
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Specialty insurance could have written coverage (it wouldn't have been cheap) Lloyds will cover most anything and Flower Bonds were still available back then.
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