We are working to Re-document the boat we just purchased. It was Documented in the name of a Trust. Try as I might, I can not find the advantages, and would really appreciate some input. The Admiral and I already have a trust, though found it a bit of pain to transfer properties we owned into, or out of the trust. If it is just another way to transfer ownership to our children should something happen to us, seems it would be accomplished via our Will. Is there a simpler solution?
Ransom,
Assume the boat is currently in your name, and you have a FL title and you've paid the sales tax on it.
The trust is a very useful tool and will work well to have the boat be owned by a trust. I'm going to encourage you to do it yourself and get familiar with trusts and you can then use them for other things. Anything that you want to by pass probate a trust is good for. Also, good for items that have liability risk, like things that move (cars, boats, planes), but insurance is still the first line of defense.
Trusts have a LOT of privacy.... no one knows who owns your things and there's not a public record to tie you to ownership (the public only sees the trustee). It's easy to sell things owned by a trust, just with an assignment of beneficial interests. There's a strong argument to have a separate trust for each thing. These are just a few basics but I'd encourage getting some education. The trust is not bullet proof and can be sued (but not often, however better the trust than you). These are revocable trusts, not irrevocable trusts.
You can be the trustee, or a good and trusted friend. There are trusted attorneys that offer this service in FL, but not necessary for a boat or car, usually. If you trust your kid (or whose getting the inheritance) they would make a great trustee (and executor), makes it simple. You'll also want a successor trustee and beneficiary (or two) in case of death.
There's tons of good books on trusts out there, and a few classes.
Yes, it will bypass probate.
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The corp or LLC is another entity, but not a big fan of it. The multi-member LLC and the corp will give you some liability protection, but won't protect you from negligence as captain (the trust won't, either). Also, both the corp and LLC require costs to set up, annual reporting and fees, and are public record. There are places for them, but would argue the trust makes a better entity for boats.
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Yes, to put property in trust do it in the documentation process. They are pretty easy to work with, give them a call and tell them what you want to do. 800-799-8362. Personally, I'm not a fan of having a documented boat for pleasure boating in and around the US, as I see no advantage, but perhaps others will give a reason why they do it. Also, being under homeland security, things change often and could be totally different today vs. when I did my last one a few years ago.
You'll need FL registration on it after you get the documentation. Take your documentation to the FL dept of revenue (where you register your car or boat) and fill out the forms for registering a non-titled vessel, Form: HSMV 87244 (Rev. 11/11)
You are simply transferring the title (documentation) for estate purposes and that is NOT taxable. However, there will be a registration fee and transfer fee ~$150.
There are some items that you will or may need depending on the clerk...
Need for sure:
Documentation
Registration Form
Check
You may need:
Trust Agreement pages, usually the first two and last one, showing the name of the trust, trustee, trustees powers, and acceptance by the trustee (signature). They do not see the beneficiary and it's none of their business and protected by FL statue (Florida Statute 689.071 for more info). You can also have a affidavit of trust, last page of Procedure TL-21, which is Certificate of title applications involving trust agreements.
Bill of Sale, should not be required because it's already sold to the trust
If your trustee is a Corp or LLC, you may be asked for a paper that says you have the right to sign for that entity. (I've had that happen once). Another note: If you use a corp or LLC as a trustee, the USCG has you sign that the trustee (owner) is a citizen of the US, but that was never challenged. There could be an argument to have an individual as the trustee.
There is a time delay in getting the documentation back, usually several months, so you would just do the process after you get it back from the Coast Guard and use your current registration to operate it.
Overall, its not bad.
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Disclaimer: Not an attorney, nor an advisor. Have done a lot of trust work, mostly with real estate and estate planning. Have done several with boats, cars and other dangerous toys. Also, go to continuing education on trusts every other year or so. Have created hundreds of trusts, and act as trustee for others.
