Owning a boat can be a dream come true, but managing its ownership effectively is key to ensuring you enjoy it to the fullest. Forming a Limited Liability Company (LLC) to hold your boat is more than just a legal formality—it can offer you significant advantages. In this post, we’ll explore three compelling reasons why placing your boat in an LLC might be a smart move: asset protection, tax benefits, and estate planning.
Asset Protection
One of the primary benefits of holding your boat in an LLC is asset protection. By doing so, you create a distinct legal entity separate from yourself. If an accident occurs or a legal claim arises, the LLC, not you personally, would be liable. This separation can help shield your personal assets from potential lawsuits related to the boat, offering you peace of mind knowing your home, savings, and other personal property are protected.
Tax Benefits
An LLC can also be beneficial when it comes to sales tax. In Washington and other jurisdictions, buying or selling a boat can involve substantial sales tax. By having your boat owned by an LLC, you might be able to limit or defer these taxes. In some cases, the LLC’s structure can allow for more favorable tax treatment when transferring ownership, potentially saving you money in the long run.
Estate Planning
Finally, an LLC can be a strategic tool for estate planning, particularly when it comes to gifting. If you plan to pass your boat on to family members, doing so through an LLC can simplify the process. Transferring ownership of the LLC, rather than the boat itself, can make it easier to manage estate taxes and ensure a smoother transition of assets according to your wishes.
At Beresford Booth, we regularly counsel individuals through transactions involving their boats. If you’re considering an LLC for your boat, we remain available to provide guidance on what will work best for you.
To learn more about Owning Your Boat in an LLC, please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-410