29Fever

iTrader: (1)

I own my 26' Awesome Cat out right, paid cash for it. Here in Florida I've noticed several boat owners of various types of boats, title and register the boat in an LLC name. Is there an advantage or disadvantage in doing this?

Is this done to cover liability issues?

Thank you in advance for your response

Jupiter Sunsation

I'm not a lawyer but I suspect the liability issues can't be dodged by you personally if you are the one driving the boat! So if Awesome Cat LLC owns the boat and you are driving during the incident you are still going to be liable. Now if you loan the boat to a friend and he has an accident then you probably would have less liability. For the yacht crowd the LLC allows the liability to be shifted away from the individual owners.

A guy I used to work for had a 55 ft performance yacht that was registered in the Bahamas. He mistakenly let the insurance lapse and there was a serious accident (passenger fell off the boat, hit his head on the dock). Corporation got sued, lapsed insurance got sued, captain got sued, yacht club got sued and the guy I worked for got sued........funny how all that works, try to rope everyone in to paying! Ins. company got off quick, captain got off quick (no real assets, boat wasn't actually moving/under his control at the time) but they kept after everyone else. Boat was the "big asset" in the mix, it was worth about 300K but one motor was in need of a rebuild so the owner clearly just let it sit until the legal issues got resolved. He was prepared to forfeit the boat and walk away. Never heard the ending

Blueabyss

I am not a tax pro and I am not giving tax advice... But... In general if you you have an expensive item like a boat or airplane in an LLC, and someone wants to buy it, The buyer buys the LLC and does not have to pay sales tax on it. In Florida the LLC annual fee is like 150.00. So lets say a boat is 100000 x 7% tax it would be like 7000 in tax. It would take a long time to reach 7000 at 150 a year. So it makes buying said item more attractive when you dont have to pay sales tax on it. I know people are going to flame this and say this cant be but that's just the way it is. I think it can also effect your liability on it but not sure. The more expensive the item the more you see this. Does not make sense on a 10k boat but it really does on a 250k boat. Wealth people have used this loop hole for years. Where as Joe Blow can not afford a 250k boat so it is irrelevant.

Chris

JRider

iTrader: (1)

I was told by my insurance co that the boat could not be used for business purposes. I think it will boil down to where you want the liability to lay.

Blueabyss

Jupiter I am sure your friend with the 300k boat just waited them out. In general they can only sue the LLC . So he said sure here are the keys to a depreciating asset that needs 80k in engine repairs and you have to maintain it until it is fixed at a cost of 1500 a month minimum and then you have to sell it...If you can.. lol...

Chris

Blueabyss

JR your ins company said that due to them giving you a quote for Non business purposes . They or someone else will write it, at a higher rate, if you plan on doing charters. I dont know anyone in a charter business that DOES NOT have their boat in an LLC. I am not talking about Joe and his 10k boat that he charges people 50-100 a person to take fishing. I am talking about 3500.00 a day charters.

Chris

Interceptor

If you're concerned about liability get a personal protection policy.

PremierPOWER

We have all our boats in a family LLC for liability purposes

sprsptr

Just my opinion - I believe that if the boat is titled to an LLC, it will be a somewhat effective way to isolate your personal assets from exposure in the event of a lawsuit. Somewhat! Also, a personal liability umbrella application always requests that you list your registered vehicles and toys (recreational vehicles, ATVs, jet skis, and boats) so that all can be factored in to the application process, and also meet the upgraded minimums of liability required with an umbrella. A fast boat is a personal liability nightmare to some insurers and often will be prohibitively expensive to include. Even worse, it can disqualify the policy. Personally insuring a fast boat can also be quite costly if you have DUI's, speeding tickets, accidents, or other moving violations, and an LLC hides the personal scrutiny. Just a few reasons why folks title them in an LLC.

29Fever

iTrader: (1)