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.

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