Boat Ownership
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Introduction
May 11, 2023 - Ownership in boating terms can be defined as the right to possess, use and dispose of a particular boat. It is typically secured or recorded through some type of governmental registration process. A title or registration certificate is subsequently issued as prima facie evidence of such entitlement. There are several forms, types, or methods of ownership available which can facilitate both sole and multiple shares of equity. These can range from contractual arrangements to legally formed entities. Although the availability and structure of ownership methods are a function of state level regulations and policies, they can vary among jurisdictions.
Sole Ownership
The options for individual sole owners are fairly straight forward when it comes to methods of ownership. These may include shell entities such as a limited liability company or corporation. Trust arrangements are another possibility. Legal entities are the most viable when it comes to liability protection whereas trust arrangements are more oriented toward taxation and financial planning. Such methods are available for sole individuals in most, but not all jurisdictions.
Multiple Owners
Matters of tenancy come into play when boat ownership is shared by multiple parties. Although shell entities are still an option, there is usually a need to define the allocation of equity, management, and usage positions without going to such lengths. This is where tenancy options can become viable choices. These may include tenants in common, joint tenants, and tenants by the entirety.
Enterprise Ownership
There are also various methods of ownership available to business enterprises and associations. These may include partnerships, joint ventures, limited liability companies, and corporations. Although mostly governed according to state by state regulations, some arrangements are more contractual in nature. Boaters involved with such organizations may wish to seek professional assistance as issues of management, representation and authority may come into question.
Certificates of Ownership
Bona fide state titles or USCG certificates of documentation are the most common methods of evidencing boat ownership. In states that do not issue boat titles, a registration certificate may serve as proof of ownership. However, these are not actual titles and warrant further verifications. All title certificates should in fact be verified for authenticity with the issuing agency when involved in transactions.
Ownership Encumbrances
Boat ownership is often limited or encumbered by loan security interests and liens. This means that non-owners may have a vested equity stake in the boat even though not entitled to usage or possession. Although these are typically flagged on ownership certificates, this is not always the case. An ownership, title and lien investigation should be accordingly implemented in any kind of boat transaction.
Conclusion
Methods of boat ownership can have an enormous impact on issues of liability, taxation and estate planning. Such options are numerous and often very complicated. Boaters are accordingly advised to seek professional assistance in exploring and establishing the most viable method of ownership. The same applies to those involved in any kind of boating related transaction that is subject to a complex ownership structure.
Credits and References
May 11, 2023 - Page initiated by Team BoatWiki.
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