Husband/Wife liability issue

[hpeer]

Here are the facts the question follows.
Wife paid for our boat out of her own cash. She owns it. Husband is not on the title.
Husband Captains the boat as well as does maintenance and makes all marine related decisions.
Married 27 years, official residence PA.
Full time live aboard cruising.
Husband has USCG 6 pack license.
Wife has some additional assets in bank accounts and investment accounts.
So does husband.
Bank accounts are in both names. Investment accounts are not joint.
We carry typical liability and other insurance, nothing special.

Question.
Does the Wife have any additional liability because she is the titled owner?
Would she derive any protective benefit (reduced liability) from selling the boat to the husband?
Are there other considerations?
Many thanks.

[boatman61]

Why sell to husband.. just change title of ownership.. unless going through divorce.

[Island Time O25]

Why not establish a corp in a corp. fee friendly state and have the corp be the owner? You can even sell the boat to the corp and take back a mortgage which would have priority over most future claims. Talk to you accountant to get a feel of all the costs and expenses involved. But it may be cheaper in the long run than over buying liability insurance to protect your other assets.

[SV DestinyAscen]

You can structure ownership all you want, but unless your ownership entity is a legitimate business that was capitalized sufficiently, there isn't a court that won't allow piercing the veil and going after the actual owners.

[zeehag]

research your (each of your)best benefits upon untimely death of the other in a foreign nation or at sea and proceed accordingly.
best do it now than later, or after the fact , when it is too late. ye never know how much time is remaining
and carry liability insurance reflecting that
\

[Celestialsailor]

Originally Posted by boatman61

Why sell to husband.. just change title of ownership.. unless going through divorce.

That might be some of the information we are not receiving.

[Stumble]

You really need to speak with an attorney. This is a very state by state answer, and so generalities are likely worthless in your case.

That being said... the reason to shift assets from one spouse to the other are generally to shield against professional liability of the working spouse. The textbook case is a surgeon with a spouse that doesn't work. By moving everything to the spouse's name, in the event the doctor kills someone negligently there simply isn't anything there to collect against in the event of a lawsuit. But this is only really important if one has a high risk profession and the other is low risk, or not working.

The downside is that if the two spouses are equally likely to be sued then shifting assets just means that everything is exposed if they are sued Andy nothing if the other person is. Or if the high risk spouse is holding the assets everything is exposed if they are sued.

Frankly the situations where I feel it is important to worry about this are pretty rare,but they do occur.


Moving things into a corporation can help, sort of. But it needs to be a bonafide business. You need to actually be trying to make money at it. So if you are advertising and taking clients out for charters as often as possible, and have a store front, and the like then sure go for it, you would be stupid not to. But if you aren't running it as a real business then it doesn't accomplish much.

[thinwater]

Originally Posted by hpeer

Here are the facts the question follows.
Wife paid for our boat out of her own cash. She owns it. Husband is not on the title.
Husband Captains the boat as well as does maintenance and makes all marine related decisions.
Married 27 years, official residence PA.
Full time live aboard cruising.
Husband has USCG 6 pack license.
Wife has some additional assets in bank accounts and investment accounts.
So does husband.
Bank accounts are in both names. Investment accounts are not joint.
We carry typical liability and other insurance, nothing special.

Question.
Does the Wife have any additional liability because she is the titled owner?
Would she derive any protective benefit (reduced liability) from selling the boat to the husband?
Are there other considerations?
Many thanks.

They are married. At the end of the day, I doubt it makes a lick of difference. So long as you are married there is one pot, In PA when divorced it is divided without regard to whose name is on the paper. Zero sum.

What SV Destiny said.

[Kenomac]

if you're worried about potential liability, just increase your liability insurance coverage to several million dollars, or to more than the value of your fixed and liquid assets.

[grantmc]

There are often interesting questions and requests for help through this forum. But I feel that sometimes hoping to gain an answer, and so make decisions based on the disparate views of faceless people scattered all over the world isn't the best option. And your post hpeer is one such request.

Wouldn't it best to spend a little money and get some legal advice.

[hpeer]

Ah, legal advice. I've hootenanny that before, often poor and inaccurate. Unfortunate but true. The marintime nature may also throw in a wrinkle many lawyers would not be aware of.

No divorce is contemplated, this is just a situation where y Wife, the Owner of the boat, feels responsible but not capable of effecting control. Just kind of the way she is.

We have discussed this some more, she has read another thread or two, gotten advice from someone who has a clue and considered the very good comments here. I think, in summary, her worst fears have been calmed and we will likely buy a bit more liability.

Thanks to all for the thoughtful answers.

[Stumble]

Originally Posted by hpeer

Ah, legal advice. I've hootenanny that before, often poor and inaccurate. Unfortunate but true. The marintime nature may also throw in a wrinkle many lawyers would not be aware of.

No divorce is contemplated, this is just a situation where y Wife, the Owner of the boat, feels responsible but not capable of effecting control. Just kind of the way she is.

We have discussed this some more, she has read another thread or two, gotten advice from someone who has a clue and considered the very good comments here. I think, in summary, her worst fears have been calmed and we will likely buy a bit more liability.

Thanks to all for the thoughtful answers.

FWIW my answer generally to these types of fears is to just buy a bigger umbrella policy. Once you have $1m a $10m policy isn't normally that much more, and if you ever do $10m in damages then you are so screwed nothing will save you because the attorneys will spend whatever's it takes to undo whatever you have done.

The other option is to shift assets into an irevocable trust, but that is generally the most expensive option.

[hpeer]

Yes, most likely what we will do, more insurance. It was helpful for her to hear voices that were not mine. And for me also. Doesn't hurt to ask.

[Doug Brown]

In some foreign countries (South America comes from experience) if the husband were to die in that country, the wife, even though the owner, is generally not considered to be the owner in their cultural.

The woman we knew had an incredibly hard, costly and long time legal battle before she was able to sail the boat out of the country.

I would suggest that the woman also get a USCG license as this will help to prove that she is competent and a legal International professional mariner.