boat ownership question for legal types

[Justin_NSA]

Kind of a grim topic but I'm stuck. The admiral and I have been working on moving all assets into a revocable living trust. This allows the designated trustee to avoid having to go thru probate upon our death. We have renamed the titles on the house, cars, accounts etc into our trust's name. The problem is the boat. It is a large asset that we want to add as well. I've spoken to the Coast Guard regarding documentation and they don't care which name we register it to. The county said the same thing regarding property taxes.
In Kansas we don't require titles for boats, only the bill of sale. So the question is how do you document legal ownership so that you can transfer that ownership to a trust fund? Which office would be the authority on this to ask?

 

[dlochner]

Does the boat have USCG Documentation?

 

[Justin_NSA]

Yes. That was why I asked them. It's due in February and I wanted to know if the registered names had to be changed at the same time I send the check. They said it was my choice. They didn't care when it came to USCG documentation

 

[Peggie Hall HeadMistress]

It's not a grim topic at all, it's a very smart move. I put the documented boats I owned into my own revocable trust along with everything else I own except my car. The only difference before you die is, you'll sign all documents "(name), Trustee." And btw, Georgia--which is where I lived then--doesn't title boats either. The bill of sale and any USCG documentation was all the proof of ownership I needed when I sold 'em.. Since it's unlikely that you'll both go together, be sure that everything jointly owned is titled or otherwise designated "joint with full right to survivor."

If you haven't already, I strongly recommend that you consult a lawyer to make sure the terms of your trusts and wills have "every i dotted and every t crossed." You don't want to leave your kids with anything to squabble about when the time comes...which no matter how well they get along now, they WILL if there is.

 

[Justin_NSA]

Thanks Peggie! We have been working with a lawyer to get this all drawn up. He just doesn't know about handling boat ownership. Maybe it's possible as you say to just use the USCG documentation and bill of sale in the trust instructions.
Ownership at death is a strange thing. When my father died and we tried to sell the car for my mother, we still had to go thru probate. Even though the title read him or her. Fortunately the buyer was patient. This was Texas about 3 years ago.

 

[Richard19068]

Kind of a grim topic but I'm stuck. The admiral and I have been working on moving all assets into a revocable living trust. This allows the designated trustee to avoid having to go thru probate upon our death. We have renamed the titles on the house, cars, accounts etc into our trust's name. The problem is the boat. It is a large asset that we want to add as well. I've spoken to the Coast Guard regarding documentation and they don't care which name we register it to. The county said the same thing regarding property taxes.
In Kansas we don't require titles for boats, only the bill of sale. So the question is how do you document legal ownership so that you can transfer that ownership to a trust fund? Which office would be the authority on this to ask?

State laws regarding trust administration and title will vary so your best checking with an attorney in Kansas. If there is no state registration of ownership you might be able to just sell the boat for $1 from you and your wife to you and your wife as trustees of the living trust, have that bill of sale notarized and then do the USCG documentation of the boat in the name of the trust. I'd first check with the state or county on any sales or use taxes that might apply to the transfer though.

 

[Brian D]

Agree, use a Notary Public.

 

[JRacer]

State laws regarding trust administration and title will vary so your best checking with an attorney in Kansas. If there is no state registration of ownership you might be able to just sell the boat for $1 from you and your wife to you and your wife as trustees of the living trust, have that bill of sale notarized and then do the USCG documentation of the boat in the name of the trust. I'd first check with the state or county on any sales or use taxes that might apply to the transfer though.

That was what I was thinking too. Sell to the Trust for $1 and other consideration, witnessed and notarized. Attorney can do that in their office for you while doing the other docs. I don't think it's a problem the way it is but this would tidy it up and eliminate a question down the road.

 

[Justin_NSA]

If I sell it to the trust, would I have to change the names on the Reno county registration and USCG documentation to the trust name?

 

[reworb]

I'm an attorney, talk to an attorney in the State where you live or the attorney who set up the Trust. Have him/her do the transfer document or at least review them.

By the way, trusts do not stop the heirs squabbling over the assets. The beneficiaries can and often do sue the Trustee especially if the Trustee after both spouses die is one of the siblings. Trusts are often SOLD as vehicle to avoid probate but really their main benefit is an estate tax "tool". In many many cases people spend more on the Trust than would be spent by probate.

 

[Justin_NSA]

Thanks for the advice. The attorney setting up the trust is working all of the transfers. He didn't know what to do with the boat without a titled document. I'll ask about xferring with a bill of sale.
We don't have concern about siblings. We only have one left and she is older than us. At this point, it's mostly about seeing our estate go to the charities we chose. It was not cheap to do the time and effort to sort this out in probate is worth a lot - not to us, but to whomever we identify in the trust.

 

[reworb]

By siblings I meant your children or other heirs

 

[Charles Erwin]

The USCG certificate is your 'title' - just like your state automobile title. Refer your lawyer to me or just go to https://www.uscg.mil/nvdc/nvdcforms.asp . He/she/they/you use USCG forms for change of ownership which are CG-1248 and 1340.

Charles

 

[Steve L22188]

Interesting question. I'm in Kansas and just set up a trust. Never thought to put the boat into the trust. Mine's not USCG documented...and, as the OP noted, there's no title for boats in Kansas. Not sure how I can put ours into the trust. Hmmmm.

And, don't want to hijack the thread...but what's the advantage of documenting the boat with the Coast Guard?
Not sure why I'd want to do that? Why did you document a boat that's sitting in a lake in Kansas (just like mine)?

 

[Charles Erwin]

The legal question is how does someone else sell your boat when you cannot do so because you are disabled, incompetent, or deceased?

If you choose the trust method then convey to a trustee now so the trustee can sell the boat when necessary. If you wait then the conveyance - usually a sale - will have to be done through probate (a death case) or by a conservator (in an incompetency case.)

If you use the trust method - then a bill of sale from you to the trustee will work if the law of your state recognizes good title is conveyed to the trustee by that simple act alone. But -- every state is different on what documents are necessary in order to assure your trustee obtains good title so that the trustee is able to pass good title to someone else when a sale becomes necessary.

If the boat is a documented vessel you just follow federal law - obtaining a new certificate in the name of the trustee. Then when the boat needs to be sold - because of death or disability - the new owner gets good title from the trustee no matter the differences between the laws of the several states.

Charles

 

[Justin_NSA]

Interesting question. I'm in Kansas and just set up a trust. Never thought to put the boat into the trust. Mine's not USCG documented...and, as the OP noted, there's no title for boats in Kansas. Not sure how I can put ours into the trust. Hmmmm.

And, don't want to hijack the thread...but what's the advantage of documenting the boat with the Coast Guard?
Not sure why I'd want to do that? Why did you document a boat that's sitting in a lake in Kansas (just like mine)?

There was no reason to be USCG documented other than it was when we bought it from Lake Perry. We just tranferred it to us. You may know the previous owners, the Sharkeys.

Charles, are you saying xfer the documentation to the trustee or the trust? We may outlive the current trustee.

 

[Steve L22188]

Yep...know the Sharkeys. Cheri Starkey does fabulous work with cushions, sail and helm covers and boat covers. Top quality!

 

[Charles Erwin]

Charles, are you saying xfer the documentation to the trustee or the trust? We may outlive the current trustee.

Go to your lawyer. Steer him to the forms I identified. Settle the remaining trust structure questions - including this one - with your lawyer.

Charles

 

[Justin_NSA]

Yep...know the Sharkeys. Cheri Starkey does fabulous work with cushions, sail and helm covers and boat covers. Top quality!

Yep! Bella Luna came with sails, sail cover, bimini and deck cover all made by them. They partnered with Wolf sails before he (Gary?) passed away.

 

[Justin_NSA]

Go to your lawyer. Steer him to the forms I identified. Settle the remaining trust structure questions - including this one - with your lawyer.

Charles

Thanks. I will ask him. I read your PM last night.