Reply
 
Thread Tools Search this Thread Display Modes
 
Old 05-08-2023, 02:26 PM   #1
Veteran Member
 
City: Dana Point
Vessel Name: Painless
Vessel Model: Skipjack 262
Join Date: Dec 2017
Posts: 41
L.l.c.?

I have two questions that maybe our legal members could expound on:

1. I see some boats listed for sale as "Held in an L.L.C." besides the avoidance of State Sales Tax and the separation of the boat from your other assets, What are the advantages and disadvantages of having your boat in an L.L.C.?

2. If You go to the effort to obtain a "Captain's License " and something goes wrong, or someone gets injured aboard Your boat or by your boat, are You held to a higher standard as a Captain than just a regular boat owner as far as liability?

Thanks for any input on these two questions.
Painless is offline   Reply With Quote
Old 05-08-2023, 02:47 PM   #2
Guru
 
tiltrider1's Avatar
 
City: Seattle
Vessel Name: AZZURRA
Vessel Model: Ocean Alexander 54
Join Date: Aug 2017
Posts: 3,724
1) LLC’s only advantage is avoiding sales tax. You might receive some liability protection in some strange ways but if you are operating the boat tHe LLC will not give you any protection. The negative to a buying an LLC boat is that you get any past liabilities that are associated with the LLC. Such as a past accident where the claim has not yet materialized.

2). A captain’s license will not hold you to a higher standard. Operating for hire does in some ways increase the standard.

Thes are very general questions and as such you will receive very general answers. I wold seek professional advice before uising any advice here for making a decision.
tiltrider1 is online now   Reply With Quote
Old 05-08-2023, 02:57 PM   #3
Valued Technical Contributor
 
DavidM's Avatar
 
City: Litchfield, Ct
Join Date: Aug 2012
Posts: 6,563
I suspect our attorney members won’t want to answer these questions, but since I am just a dumb, retired engineer, I will give it a shot.

Yes, an LLC can avoid taxes. You transfer the LLC to anew owner when you sell. The boat is just an asset of the LLC, so since its ownership doesn’t change, no taxes are due. The only disadvantages I can see is the paper work to set it up and it might put off some potential buyers- it would me.

A captain’s license can cause additional liability. I have read on this forum that you can be held to a higher standard if you have a captain’s license in case of a accident-you are presumed to be more qualified.

Unless you plan to charter your boat with you as the captain or operate other boats for hire, I wouldn’t do it.

David
DavidM is offline   Reply With Quote
Old 05-08-2023, 03:28 PM   #4
TF Site Team
 
Bacchus's Avatar
 
City: Seneca Lake NY
Vessel Name: Bacchus
Vessel Model: MS 34 HT Trawler
Join Date: Nov 2014
Posts: 7,275
I'm of equal qualification as David but will offer my $0.02.... worth what you paid for the advice.
I would be asking your insurance agent about insuring a boat held in an LLC as well as the Capt license question.

Only insurance difference I could think of is the inability to bundle boat with vehicle & home insurance for the small discount. The other might be who is covered by the LLC insurance policy... is it only LLC officers, employees? What about family, friends, etc. If you have a personal home/ auto umbrella policy it likely won't cover the LLC boat.

I have heard both sides of the Capt argument... many repeat the "held to a higher std" but have also heard and read that's a myth and that responsibility in case of an accident will be apportioned based on the circumstances and what each party did or didn't do that contributed to the accident. Also important is what evasive actions were taken as ultimately both parties are responsible to avoid an accident even if other party is doing something incorrect.
I would think any good lawyer could argue that having knowledge and training should not transfer responsibility for others ignorance or inappropriate actions.

I have not heard of any credible situation where a Capt was held "more" responsible than other party and would have been better off without the training & certification.

Wouldn't the same argument hold true for those boaters having taken multiple / advanced USCG or USPS courses or holding advanced grades designations vs an uneducated, inexperienced operator?
I have not heard of a CDL licensed driver being held to any higher std when involved in a vehicular accident. They are held to a stricter blood alcohol limit whether driving for pay or in their own vehicle, but that seems a different case. I do know a licensed Capt has time limits for alcohol consumption but honestly don't know if that applies to recreational boating or only "for hire" activities.
__________________
Don
2008 MS 34 HT Trawler
"Bacchus"
Bacchus is offline   Reply With Quote
Old 05-08-2023, 03:56 PM   #5
Guru
 
City: Grand Rapids, MI
Vessel Name: Escape
Vessel Model: 1973 Concorde 41 DC
Join Date: Sep 2020
Posts: 563
Can't speak on #1. But on #2 your license only comes into play when operating under authority of the license, in other words, for hire. On your own pleasure craft or as a guest on some one else's, the license is irrelevant. In a civil suite, the other guys lawyer might bring it up, but your lawyer should be able to shoot it down based on the above. Keep in mind that in almost all marine accident cases both operators are held liable. Sometimes equally. Being licensed does not change that, but it has led some to believe they were being held to higher standard. It's not like car crashes where almost always only one driver is charged, even though there may have been violations on both sides.
jgwinks is offline   Reply With Quote
Old 05-08-2023, 04:08 PM   #6
Guru
 
City: Grand Rapids, MI
Vessel Name: Escape
Vessel Model: 1973 Concorde 41 DC
Join Date: Sep 2020
Posts: 563
Quote:
Originally Posted by Bacchus View Post
I'm of equal qualification as David but will offer my $0.02.... worth what you paid for the advice.
I would be asking your insurance agent about insuring a boat held in an LLC as well as the Capt license question.

Only insurance difference I could think of is the inability to bundle boat with vehicle & home insurance for the small discount. The other might be who is covered by the LLC insurance policy... is it only LLC officers, employees? What about family, friends, etc. If you have a personal home/ auto umbrella policy it likely won't cover the LLC boat.

I have heard both sides of the Capt argument... many repeat the "held to a higher std" but have also heard and read that's a myth and that responsibility in case of an accident will be apportioned based on the circumstances and what each party did or didn't do that contributed to the accident. Also important is what evasive actions were taken as ultimately both parties are responsible to avoid an accident even if other party is doing something incorrect.
I would think any good lawyer could argue that having knowledge and training should not transfer responsibility for others ignorance or inappropriate actions.

I have not heard of any credible situation where a Capt was held "more" responsible than other party and would have been better off without the training & certification.

Wouldn't the same argument hold true for those boaters having taken multiple / advanced USCG or USPS courses or holding advanced grades designations vs an uneducated, inexperienced operator?
I have not heard of a CDL licensed driver being held to any higher std when involved in a vehicular accident. They are held to a stricter blood alcohol limit whether driving for pay or in their own vehicle, but that seems a different case. I do know a licensed Capt has time limits for alcohol consumption but honestly don't know if that applies to recreational boating or only "for hire" activities.

Correct. I added "as a guest on some one else's" in my previous post as some one on here said that was the case. Ridiculous. That would be like a licensed driver riding as passenger on a bus being held responsible for the bus driver hitting someone. Ain't gonna happen. You have no duty or ability to act to prevent the collision and would be in big doo-doo if you tried.

The alcohol time limit is 8 hours before getting underway as I recall. That's commercial operation only, but is a good idea for pleasure boat too. Just like driving your car, there's no time limit prior, you just can't be under the influence when underway.
jgwinks is offline   Reply With Quote
Old 05-08-2023, 04:50 PM   #7
Guru
 
City: West coast
Join Date: Aug 2021
Posts: 1,073
Quote:
Originally Posted by DavidM View Post
I suspect our attorney members wonít want to answer these questions, but since I am just a dumb, retired engineer, I will give it a shot.

Yes, an LLC can avoid taxes. You transfer the LLC to anew owner when you sell. The boat is just an asset of the LLC, so since its ownership doesnít change, no taxes are due. The only disadvantages I can see is the paper work to set it up and it might put off some potential buyers- it would me.

A captainís license can cause additional liability. I have read on this forum that you can be held to a higher standard if you have a captainís license in case of a accident-you are presumed to be more qualified.

Unless you plan to charter your boat with you as the captain or operate other boats for hire, I wouldnít do it.

David
If an LLC puts you off you can just buy the boat directly so itís an option not a requirement.

The other advantage of an LLC not mentioned is it can provide privacy to the owner when you set it up with an agent listed not the owner.
bowball is offline   Reply With Quote
Old 05-08-2023, 07:23 PM   #8
Guru
 
psneeld's Avatar
 
City: Ft Pierce
Vessel Name: Sold
Vessel Model: Was an Albin/PSN 40
Join Date: Oct 2011
Posts: 26,881
I have followed "is a USCG licensed individual held to a higher standard?" and the only answer I can offer is..... it depends.

The USCG holds an administrative control over captain's licenses. It doesn't have to be a legal issue for them to act.

If you are present for an egregious maritime act and could have intervened...they may come after you on an administrative level.

Proving "neglect" in many cases where you are not the operator or operation of your vessel isn't in question....then they will be hard pressed to do much.

But in all the yes they can, no they can't articles/discussions I have read....I have to lean is yes they can but it is rare and a longshot on their part unless you confess.

On the simple level.... no...you are generally not held to a higher standard against standards that are necessary when executing your license.

As far as CDLs...that's different as you give up a regular driver's license from what I have been told and issued a CDL. I don't know for sure but every time that discussion comes up it seems like CDL ARE held to a different standard....sorta following that if you ger a BUI...it can result in the loss of your driver's license.
psneeld is offline   Reply With Quote
Old 05-08-2023, 07:35 PM   #9
Guru
 
psneeld's Avatar
 
City: Ft Pierce
Vessel Name: Sold
Vessel Model: Was an Albin/PSN 40
Join Date: Oct 2011
Posts: 26,881
Quote:
Originally Posted by jgwinks View Post
Correct. I added "as a guest on some one else's" in my previous post as some one on here said that was the case. Ridiculous. That would be like a licensed driver riding as passenger on a bus being held responsible for the bus driver hitting someone. Ain't gonna happen. You have no duty or ability to act to prevent the collision and would be in big doo-doo if you tried.

The alcohol time limit is 8 hours before getting underway as I recall. That's commercial operation only, but is a good idea for pleasure boat too. Just like driving your car, there's no time limit prior, you just can't be under the influence when underway.
For OUPV I believe the rule is 0.04 BAC...not even a time limit.
psneeld is offline   Reply With Quote
Old 05-09-2023, 12:04 AM   #10
Guru
 
socalrider's Avatar
 
City: San Diego
Vessel Name: SEA WOLF
Vessel Model: 1979 CHB 41 Trawler
Join Date: Feb 2020
Posts: 874
Another advantage I've heard about with an LLC is that your slip/moorage can stay with the boat upon transfer. This often happens anyway, but the marina has to approve the new owner. If the moorage contract is with the LLC, in theory a new owner of the LLC won't need to re-apply for the slip.

That said, I remember reading in my contract with the San Diego Mooring Company some language meant to circumvent that protection so YMMV.
socalrider is offline   Reply With Quote
Old 05-09-2023, 08:03 AM   #11
Guru
 
twistedtree's Avatar
 
City: Walkabout Creek
Join Date: Jan 2013
Posts: 9,111
It's so sad that our society thinks that being stupid or incompetent will get you in less trouble, therefore it's better to be stupid and incompetent.


My own feeling is:


1) The training and knowledge required to get a license will go a long way to keep you out of trouble in the first place.


2) If you do get in trouble, a well trained mariner is more likely to take the right mitigating actions. Knowing and doing the right things is your best defense.


So unless you did something specific and stupid, you will carry less culpability, not more.
__________________
MVTanglewood.com
twistedtree is offline   Reply With Quote
Old 05-09-2023, 09:38 AM   #12
Guru
 
City: Tampa, FL
Join Date: Nov 2013
Posts: 664
You see a lot of people who insist that having a license means you will be held to a higher standard, even when you are not operating under the authority of that license. I have done a lot of searching on this question. I have never -- NEVER! -- found even one, single case of this happening to anyone. I have heard people claim that their brother's cousin knows a guy who was held to a higher standard. But never any first-hand, real world, documented cases of it happening.


So, for anyone who is sure that a captain can be held to a higher standard of care, when operating entirely in a recreational capacity, I ask for a reference. A case number. A CG document. Any hard, verifiable evidence that it has EVER actually happened. I have asked for this many times. No one has ever provided any such evidence.


I know what MY conclusions are. I leave you to draw your own conclusions.
denverd0n is offline   Reply With Quote
Old 05-09-2023, 10:26 AM   #13
Guru
 
psneeld's Avatar
 
City: Ft Pierce
Vessel Name: Sold
Vessel Model: Was an Albin/PSN 40
Join Date: Oct 2011
Posts: 26,881
This article parallels my understanding exactly of the "license standard" question. It is 12 years old but I haven't heard or read differently and both the USCG has cracked down harder and civil lawsuits more abundant since then in my experience.

It basically says "it depends"....

https://www.thelog.com/ask-the-attor...lity-standard/
psneeld is offline   Reply With Quote
Old 05-09-2023, 01:43 PM   #14
Guru
 
City: NC
Join Date: Jan 2014
Posts: 1,192
Quote:
Originally Posted by denverd0n View Post
...
So, for anyone who is sure that a captain can be held to a higher standard of care, when operating entirely in a recreational capacity, I ask for a reference. A case number. A CG document. Any hard, verifiable evidence that it has EVER actually happened. I have asked for this many times. No one has ever provided any such evidence.
...
There was a poster on this forum, or Cruiser Forum, who was in court and the judge brought up the issue of a higher standard for someone holding a license. That is the only reference to an actual court case I have ever read.

I think it is more than fair to say that the chance of a higher standard being applied to a captain operating recreationally is pretty low. Flip side is that the chance of having an incident should be greatly minimized by using the knowledge that one has to get the license.

I don't ever see getting captain's credentials just due to the paperwork and cost since I will not be operating commercially. If it saved on insurance that is very likely to change my opinion.

Later,
Dan
dannc is online now   Reply With Quote
Old 05-09-2023, 03:43 PM   #15
Guru
 
O C Diver's Avatar
 
City: Fort Myers, FL... Summers in the Great Lakes
Vessel Name: Slow Hand
Vessel Model: Cherubini Independence 45
Join Date: Dec 2010
Posts: 12,045
I held a merchant mariner's master's license (captain's license) for 35 years and get a significant discount on insurance. Before you race out to get your 6 pack license, understand that the insurance company is going to ask you for a copy of your first license (when you got it) and the commercial capacity that you used it. Having the license with out time and commercial use is probably as valuable as the online state boating safety course and certificate.

Ted
__________________
Blog: mvslowhand.com
I'm tired of fast moves, I've got a slow groove, on my mind.....
I want to spend some time, Not come and go in a heated rush.....
"Slow Hand" by The Pointer Sisters
O C Diver is online now   Reply With Quote
Old 05-09-2023, 10:35 PM   #16
Senior Member
 
LN-RTP's Avatar
 
City: Fort Lauderdale
Vessel Name: Odin
Vessel Model: Albin 28TE
Join Date: Oct 2016
Posts: 258
I had my last 3 boats within an LLC, not just to limit liability, but also because
the boats were in charter as in a legit business. (looks better in case of an IRS audit)
I also have a recreational boat owned by the LLC, no downside and maybe easier to sell
later. (No sales tax)
As for licensed captain being held to a higher standard: Heard it many times, but never
seen it, probably an old wife's tale.
__________________
www.odincharters.com
LN-RTP is offline   Reply With Quote
Old 05-10-2023, 01:12 PM   #17
Guru
 
MYTraveler's Avatar
 
City: West Coast
Join Date: Apr 2014
Posts: 1,726
Quote:
Originally Posted by tiltrider1 View Post
1) LLCís only advantage is avoiding sales tax. You might receive some liability protection in some strange ways but if you are operating the boat tHe LLC will not give you any protection.
If you are not operating the boat when an injury occurs, you will likely not have personal liability unless it is shown that you acted negligently in some way. For example, if you let an unqualified person take the helm that is sufficient negligence to create personal liability. Similarly, if the injury is not the fault of the driver, but instead results from equipment failure, you may have liability for failing to adequately maintain the boat. At the end of the day, you can count on plaintiff's lawyers to sue everyone, use discovery to figure out the best claims against each, then count on all of the insurers to contribute toward a global settlement, if only to avoid the expense and nuisance of litigation.
MYTraveler is offline   Reply With Quote
Old 05-19-2023, 12:57 PM   #18
Guru
 
Bigsfish's Avatar
 
City: Miami River
Vessel Name: Gotcha
Vessel Model: Grand Banks. Heritage. 54
Join Date: Aug 2016
Posts: 2,973
My attorney who is also a friend told me not to get a captains license because it may cause me to be held to a higher standard in a trial with a jury.

I also have had all my boats owned by a corporation (Also my homes). The new buyer can buy the corporation or just the asset.
Bigsfish is offline   Reply With Quote
Old 05-19-2023, 03:34 PM   #19
Guru
 
rgano's Avatar
 
City: Southport, FL near Panama City
Vessel Name: FROLIC
Vessel Model: Mainship 30 Pilot II since 2015. GB-42 1986-2015. Former Unlimited Tonnage Master
Join Date: Oct 2007
Posts: 4,703
Quote:
Originally Posted by Bigsfish View Post
My attorney who is also a friend told me not to get a captains license because it may cause me to be held to a higher standard in a trial with a jury.

I also have had all my boats owned by a corporation (Also my homes). The new buyer can buy the corporation or just the asset.
Said like you'd expect a lawyer to speak, but did he have any admiralty court experience? Experience not a license is the best bet for avoiding boat-related court appearances. My thinking is that Joe Average boater who has no military/commercial experience under a license and is looking to reduce his insurance premiums by obtaining a low-level license is not going to see much of a discount. I already had almost 20 years at sea as a naval officer when I first applied for trawler insurance and naturally got a discount for my experience - naval officers do not normally get USCG licenses. Two years later, I went to the USCG and obtained, after extensive testing, my unlimited tonnage master upon oceans license to use in my retirement, and the premium did not really change that much. This leads to my concluding that just maybe any premium discount Joe Average is going to get will have more to do with experience than with any nickel and dime level license. Get a license if you need it to work, not as a bragging right.
__________________
Rich Gano
FROLIC (2005 MainShip 30 Pilot II)
Panama City area
rgano is offline   Reply With Quote
Old 05-19-2023, 03:40 PM   #20
Senior Member
 
LN-RTP's Avatar
 
City: Fort Lauderdale
Vessel Name: Odin
Vessel Model: Albin 28TE
Join Date: Oct 2016
Posts: 258
Quote:
than with any nickel and dime level license.
What is a nickel and dime level license?
__________________
www.odincharters.com
LN-RTP is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


» Trawler Port Captains
Port Captains are TF volunteers who can serve as local guides or assist with local arrangements and information. Search below to locate Port Captains near your destination. To learn more about this program read here: TF Port Captain Program





All times are GMT -5. The time now is 11:47 AM.


Powered by vBulletin® Version 3.8.8 Beta 4
Copyright ©2000 - 2023, vBulletin Solutions, Inc.
Search Engine Optimization by vBSEO 3.6.0
Copyright 2006 - 2012