Boat Ownership Methods Overview
What you should know about establishing ownership of a boat.
Ownership of a boat can take different forms, each with significant legal, taxation and regulatory implications. There are accordingly a broad range of options to choose from depending on preferences, circumstances and jurisdictional dictates. The manifestation of such methods are, however, not always consistent when it comes to boat registration and titling. This overview will explore the various ways in which boat ownership methods are designated or recorded on the state and federal levels.
Ownership Regulations
Boat ownership may consist of a sole individual, legally
sanctioned entity or multiple combinations thereof. With multiple owners, it
becomes a matter of whether the overall equity is undivided or parceled into
defined shares. There are also conditions under which a representative may
assume technical ownership with regard to estates, trust arrangements
and guardianships.
Jurisdictional Regulations -
Allowable methods of boat ownership are typically prescribed by the state level
regulations in which an owner is domiciled. Although somewhat consistent,
these may vary among different jurisdictions. The Coast Guard will defer to
such rules in determining whether certain methods qualify for vessel
documentation purposes.
Citizenship Requirements - There
are no citizenship restrictions when it comes to state registration and
titling. However, an owner or owners of a USCG documented vessel must meet
clearly defined U.S. citizenship standards. These are addressed in the vessel
documentation sections of our website.
Age Limitations - Although
minors are generally allowed to own personal property such as boats, they
may need parental consent or legal representation in order to engage in
contractual arrangements. State and federal agencies do not, however,
typically require age certifications when it comes to boat registration and
title applications.
Legal Names - State and federal agencies may accept bynames
for registration, titling and documentation purposes. However, it is best to
use a legal name in order to avoid confusion in contractual, judicial
and enforcement situations.
Ownership Recordings
There is a considerable difference in the way ownership
methods are recorded on state level titling as compared to USCG vessel
documentation. State registration agencies are more relaxed in such requirements
whereas those on the federal level are quite stringent. Such precision of is one of
the endearing aspects vessel documentation.
State Registration and Titling
- Ownership methods for state level boat registration and titling are
designated through the application form itself. Most will have check boxes
for choosing various options. However, these are often limited and some may facilitate a
listing for owner names only. This leaves the owner in a position of having
to maintain evidence of any methodical arrangements in some other fashion.
It also prevents interested parties from discerning such information at face
value.
USCG Vessel Documentation - When a vessel becomes USCG
documented, ownership is not designated trough the application form. It
merely gathers the name and address of a managing owner. Ownership
and methods are accordingly established by those instruments provided as
evidence of ownership.
Ownership Methods
Some of the more common ownership methods under which boats
may become registered, titled or documented are briefly explained as
follows. Further contextual requirements can be found throughout the pages of our
website.
Sole Individual - The most straight forward method of
ownership is that of a sole or singular individual. Recordings are typically
rendered in such person's full legal name, usually without further
qualification. Although an individual's name my be qualified as "a single person" or "a married person", this is not
particularly common in the marine industry.
Tenants in Common -
Unless otherwise specified, multiple owners are typically viewed as tenants
in common. Some state applications facilitate such designation where others
simply have an "or" check box as such an indicator. Transfer instruments for
documented vessels should list the owner names as qualified by the
respective percentages of ownership.
Joint Tenants
- Joint tenants is a type of ownership where multiple parties own equal and
undivided
shares of equity in the subject boat. This typically confers rights of
survivorship in most jurisdictions, although it may not always be the case.
State applications may have a checkbox for such designation, although some
simply designate an "and" instead. Transfer instruments on documented
vessels will show the parties names as qualified by "Joint Tenants". The
Coast Guard will not recognize rights of survivorship unless specifically
stated.
Tenants by the
Entirety - This type of ownership treats a married couple as Joint
Tenants, but only when while the marriage is intact. Upon a divorce, it will
revert into a Tenancy In Common. However, not all states recognize this
method of ownership. Many state registration applications will not
accordingly have a check box for such designation. Transfer instruments for
a documented vessels must specify such arrangement.
Community
Property - Community property is not an entity in itself, but rather an
arrangement to share ownership a boat, typically between husband and
wife Such option is not, however, sanctioned by every state. Most state
registrations do not have provisions for declaring such option. Transfer
instruments for establishing vessel documentation must specify this kind of
arrangement.
Corporation -
A corporation, for all practical purposes, is viewed as an individual for
registration and titling purposes. The corporate name is typically qualified
by an "Inc.", "LTD" or some other respective designation. Such designation
is not available on most state applications as the qualification is self
evident. The same applies to vessel documentation transfer instruments
Limited Liability
Company - A Limited Liability Company is viewed as an individual for
registration and titling purposes. However, its name must be qualified as an
"LLC", "LLP" Limited Liability Company or some other respective designation. This
applies for both state registration applications and vessel documentation
transfer instruments.
Partnership - A partnership, whether General or Limited,
is viewed as an individual for registration and titling purposes. However,
its name must be qualified as such with the respective designations. The
same applies to vessel documentation transfer instruments.
Joint
Venture - A joint venture is not always recognized as a legal entity
unless organized as such and sanctioned by the respective state. If so, its
name must be qualified as such with the respective designation. In this name
must be qualified as such with the respective designation. The same applies
to state applications and vessel documentation transfer instruments.
Association - An association is not always recognized as a legal entity
unless organized as such and sanctioned by the respective state. If so, its
name must be qualified as such with the respective designation. In this name
must be qualified as such with the respective designation. The same applies
to state applications and vessel documentation transfer instruments.
Estate -
An estate is not typically viewed as an operational entity in itself. This
is merely a term that encompasses all of a deceased person's property and
assets. These are managed by a court appointed executive or representative.
A boat typically remains in the decedent's name until liquidated and
transferred by the representative. Although some states may allow
registration and tiling under the estate's name, this is not the case for
documented vessels.
Trust - A trust is an arrangement wherein a trustee holds title for
the benefit of another party. It is not typically viewed as an operational
entity in itself. Although some states may allow registration and titling
under the name of a trust, this is not the case for documented vessels.
Guardianship -
A guardianship is an arrangement where the guardian holds title for the
benefit of another party. It is not typically viewed as an operational
entity in itself. Although some states may allow registration and titling
under the name of a guardianship, this is not the case for documented
vessels.
Conclusion
This overview contains material that may affect your legal rights. You should consult with a qualified attorney, accountant or government agency in determining the right method of boat ownership. More detailed information about ownership methods can be found throughout the pages of our website.
References and Referrals
Comments - Suggestions - Corrections