Putting Boat into LLC or Trust

[Hiracer]

My vessel is U.S. Coast Guard documented.

I don't like the idea that somebody can get my name and address via my boat's name. That's why I don't use my boat's name on these forums. There are too many nut jobs in this world.

To gain some privacy, I'm thinking of setting up a sole owner limited liability company and transferring the boat to it. Maybe get a private mail box.

Or maybe I'll set up a trust. Long term, a trust is cheaper.

Other than cost, what are the downsides?

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

TIA for any insight.

Mods, feel free to move the thread if I'll started it in the wrong category.

[Charlie]

My boat is in an S-Corp and I don't have any problems. I have gone to Canada only. I will try Mexico later this year.

[BadFish]

Have you had bad experiences in the past with these so-called "nut jobs" bothering you? Are there people after you or something? Or is this a preemptive strike to ensure the security of your privacy in the future?

Little confused here about what the issue is here, sorry. Fill me in John.

Cheers

Bill

[Hiracer]

Bill,

I personally have never had problems. But I've witnessed others post personal information on forums and even attempt to recon in person. That was a wake call, for me.

I'm being proactive/preemptive.

I've been participating on forums since the early 1990s and, like I said, I've never had a problem. But lately I'm seeing more ugliness. With the economy tanking, I've decided to be more careful. Call me paranoid. That's OK because maybe I am. I just don't see any downside to being careful.

[Hiracer]

Bill,

Try this on for size.

I recall a few years ago Congress changed the rules on credit reporting bureaus because disgruntled tax protesters were filing involuntary bankruptcies on behalf of federal district court judges. (Many people don't know that creditors can sometimes file bankruptcy on behalf of the debtor.) The judges would get their bankruptcy proceedings dismissed quick enough, but then found out that the reporting bureaus were contining to report the fact of the involunatary bankruptcy petition for 10 years, as was permitted by federal law. This, of course, destroyed the credit ratings for the affected judges, much to their dismay.

So Congress carved out an exception on the reporting periods to help out those judges.

Nut jobs can be very creative. And destructive.

[Chief Engineer]

I have never heard of a so-called nut job doing anything like that in the marine field.

I have heard of many though that tried to run out on bills.

My favourite was of a member of a wealthy well known family writing a check for $50,000 for engine work.....when the check bounced, it was found that he had stopped payment on it before he wrote it.....It took the yard a year before they located the boat.....and I don't know how much the eventually settled for it.

[James S]

I hope this does not jinks my positive experiences thus far....but I too, have not actually had or heard of these nut jobs creating any specific problems.

As far as anonymity on these forums goes....It has a serious effect on how much weight I put on posts...

I post a picture of ME.... pictures of MY are of MY boat.

I have a short write up of where I live and where my boat lives...that’s just my way.

[senormechanico]

I've not had any problems either, although I don't put up my HAM sign.

I've got enough web visibility as it is.

Steve B.

[johneri1]

No trouble here either, but you never know. As the saying goes, just because you're paranoid doesn't mean they ain't following you. . . .

[andrejsv]

I am very interested in the answers to the original post (which were not discussed since I think the thread got derailed a bit), iregardless of the reasons as to why one would to put a boat on an LLC or trust (I have different reasons). In partcular.. does an LLC or trust lead to problems in foreign countries?


Snip for original post:
"To gain some privacy, I'm thinking of setting up a sole owner limited liability company and transferring the boat to it. Maybe get a private mail box.

Or maybe I'll set up a trust. Long term, a trust is cheaper.

Other than cost, what are the downsides?

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

[David_Old_Jersey]

Originally Posted by andrejsv

Or maybe I'll set up a trust. Long term, a trust is cheaper.

Other than cost, what are the downsides?

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

No first hand experiance of Yachts owned directly by Trusts. But theoretically I can think of no reason why a Trust could not own a Yacht. Whether a Ships Registry would allow this is a seperate issue.

But from a purely practical perspective I would not do so for 3 reasons:-

1) Not all legal systems recognise the concept of a Trust. and even if they do - not all the governmental type folk understand them.

2)In boat terms would be unusual (I won't say unique, but probably very rare) and IME not confusing Govt employees with too much stuff to "think" through works well.

3) It would kinda scream "Tax Evader". Whether fairly or not IMO life is less complicated not wearing that T-Shirt.

Of course, each to their own, yadda yadda yadda, don't blame me - a bloke in the pub told me to write this etc etc

[Hiracer]

Originally Posted by andrejsv

I am very interested in the answers to the original post (which were not discussed since I think the thread got derailed a bit), iregardless of the reasons as to why one would to put a boat on an LLC or trust (I have different reasons). In partcular.. does an LLC or trust lead to problems in foreign countries?

I received quite a few informative responses to the same question I posted in the SSCA forum. You might want to check there.

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.

Not sure what your objectives are.

[Hiracer]

Originally Posted by David_Old_Jersey

3) It would kinda scream "Tax Evader".

Not true, unless the trust is off-shore. Estate planning 101 uses trusts to avoid probate--a pretty common tool. For example, all three of my houses have been owned by trusts, not me. I can't explain why I forgot to put the boat in trust when I got it. Stupid attack, I guess.

[Dreaming Yachtsman]

My wife and I set up a living trust to avoid inheritance tax on our estate the year before the minimum limit was raised well above our net worth. Naturally when we bought our boat we put it in the name of the trust, including on USCG documents. In nearly 6 years cruising Canada, Mexico, and Central America, not once were we questioned about ownership. Thus I am curious about the basis for Hiracer's statement:
"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."

[Hiracer]

Originally Posted by Dreaming Yachtsman

My wife and I set up a living trust to avoid inheritance tax on our estate the year before the minimum limit was raised well above our net worth. Naturally when we bought our boat we put it in the name of the trust, including on USCG documents. In nearly 6 years cruising Canada, Mexico, and Central America, not once were we questioned about ownership. Thus I am curious about the basis for Hiracer's statement:
"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."

John,

On the SSCA forum I was informed that in some parts of the world if the owner of the yacht is not the de facto operator, the local officials will claim that the boat is a commercial operation and special fees or restrictions may apply. Further, you will have an uphill climb to convince them otherwise because of their profit motive. Obviously, this is not an issue everywhere.

I have no first hand experience, which is precisely why I posted the question.

It would have been better if I had said above that you 'may' have problems, depending on where you sail. In my original statement I was thinking in the context of a world cruise, but I obviously didn't clarify that.