Christopher S. Mulvaney,

Attorney and Counselor-at-Law

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THIS WEBSITE INCLUDES GENERAL INFORMATION & THE OPINIONS OF CHRISTOPHER S. MULVANEY. IT IS INTENDED TO STIMULATE A BASIS FOR QUESTIONS RELATED TO YOUR PARTICULAR FACTUAL CIRCUMSTANCES — BEFORE YOU ACT.  THIS WEBSITE DOES NOT CONSTITUTE LEGAL ADVICE. IF YOU WANT LEGAL ADVICE, PLEASE MAKE A ZOOM APPOINTMENT TO SPEAK WITH ME.

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Gonzaga University School of Law – Spokane, Washington – Class of 2002 – Cum Laude The Latin phrase “Deo patriae, scientiis, artibus” translates to “For God and country through sciences and arts”.  The initials A.M.D.G. on the seal of Gonzaga Law School stand for Ad Majorem Dei Gloriam, which is Latin for “For the Greater Glory of God” the Motto of the Society of Jesus (Jesuits): a Catholic religious order founded by St. Ignatius of Loyola.

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Inheriting a boat and giving a boat to a beneficiary via a trust both involve important considerations to ensure a smooth transfer of ownership and avoid potential issues. Here’s a breakdown of the key factors involved in each scenario: 

1. Inheriting a Boat:

• Documentation:
• • Gather all relevant paperwork, including bills of sale, titles, registration, and any related documents.
  • Proof of inheritance, such as a will or court order, is typically required, alongside standard registration documents.
• Transfer of Ownership:
• • If the boat is specifically mentioned in a will, the executors of the will have the authority to manage the estate and distribute the boat to the beneficiary.
  • A Grant of Probate, issued by the Probate Registry, is often needed for executors to deal with the estate.
  • If the boat owner died without a will, the estate passes on to Statutory Trusts, and the boat will be divided among surviving relatives according to a strict formula.
  • Some states may have specific procedures for transferring inherited boat titles, and it’s essential to comply with state-specific laws.
  • In some cases, if the estate is small enough and all debts are paid, a simplified transfer process may be available without full probate.
• Registration and Licensing:
• • The boat will need to be re-registered in the beneficiary’s name. This process varies by state and may involve completing a boat registration application form and submitting proof of ownership.
• Insurance:
  • The beneficiary needs to update the boat insurance policy to reflect the change of ownership.
• Maintenance and Costs:
• • The beneficiary becomes responsible for all maintenance, upkeep, berthing fees, and insurance premiums associated with the boat.
• Taxes:
• • Federal inheritance tax generally doesn’t apply to inherited assets, but any subsequent earnings from the inherited assets (like interest or dividends) are taxable.
  • State inheritance taxes vary, and it’s essential to check the specific regulations in your state.
  • Inherited property, including boats, is typically subject to a “stepped-up basis” for capital gains tax purposes. This means that if the beneficiary sells the boat later, the taxable gain will be calculated based on the boat’s fair market value at the time of inheritance, rather than the original purchase price.
• Potential Complications:
• • If the boat’s title history is unclear or incomplete, it may pose challenges in transferring ownership.
  • Disagreements among heirs can lead to delays and disputes regarding the distribution of the boat. 

2. Giving a Boat to a Beneficiary via a Trust:

• Estate Planning:
• • Placing a boat in a trust is an effective estate planning strategy to streamline the transfer process and avoid probate.
  • A living trust allows you to retain control over the boat during your lifetime while designating beneficiaries who will inherit it upon your passing.
• Trust Documentation:
• • A trust agreement should clearly outline how the boat will be managed, who will be responsible for upkeep and maintenance, and how costs will be shared among beneficiaries.
  • Specific instructions regarding the boat’s use, potential buyouts, or the division of proceeds among beneficiaries can be included in the trust documents.
• Transfer of Ownership to the Trust:
• • Appropriate documentation is required to transfer the boat’s title and registration to the trust.
  • The trust will be reflected as the owner on the boat’s documentation.
• Trust Management:
• • A trustee will be responsible for managing the trust and its assets, including the boat.
  • The trust needs to be properly funded to cover the ongoing costs of boat ownership, such as maintenance and insurance.
• Compliance with Maritime Laws and Regulations:
• • It’s essential to comply with all relevant maritime laws and regulations regarding vessels owned by trusts.
• Potential Challenges:
• • Setting up and maintaining a trust can be complicated and costly, and legal fees may be involved.
  • Ongoing reporting requirements and potential annual legal fees for the trust need to be considered.
  • Certain jurisdictions may have specific rules for registering vessels owned by trusts.
  • Insurance premiums might increase when the boat is transferred to a trust.
  • In the event of an accident or damages, lawyers might try to pursue claims against the trust beyond the liability insurance coverage. 

In both scenarios, consulting with an estate planning attorney or a legal professional specializing in maritime law is highly recommended to ensure proper documentation, compliance with regulations, and a smooth transfer of ownership. They can help you navigate the complexities of boat ownership and estate planning. 

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Washington State residents can meet with me in Zoom/DocuSign from anywhere in the world, and I can notarize their electronic signatures because I am a remote online notary.  Just email me an image of your photo ID.