Joint Ownership of Sailboats for the Unmarried

[RacheloftheBoatTramps]

Hello Ladies. My boyfriend and I have lived and cruised together for the past three years on a couple of small sailboats. We are not married and don't have any intention of getting formally married, but we're beginning to think we might be together for awhile. Previously, my boyfriend has purchased both boats with his money alone, paid for substantial improvements that would increase the value of the boat (windvane, EPIRB, etc.), and kept the money when they were sold. I have split the cost of slip rent, routine maintenance, charts, flags, etc. and scraped my weight in varnish. We are looking for a boat to keep now and we both have a good chunk of money to put into it, though probably not 50/50. We're a bit nervous as to how it would work out if we were to have a messy breakup in the years ahead. Does anyone have any ideas on the best way to set up a co-ownership arrangement so that we could legally divide things up fairly if all goes to hell? Can you title a boat under two peoples names? Do you need to draw up some sort of contract? If we were buying a house, we could set up a tenants in common arrangement, but what do you do if your house ain't a house?

[sevseasail]

I would create and register a partnership (sort of business but you'll have to find out exactly what kind of partnership this will be as the main porpoise is not business ) which, as you mention would have to establish ownership percentage if not 50/50. Then, have the entity buy and run the boat; that way everything (expenses, maintenance and also gain/loss) will be proportional to your ownership percentage and when/if things get dissolved, then the distribution is pretty much straight forward.
I set a business like that a few years ago and my CPA helped me with the documents. You can do it on your own if you know what you're doing, or else look for an accountant or maybe even an attorney to set up the partnership.

I hope that helps.
Willy.

[tomperanteau]

See an attorney and have them draw up a legally binding document. If you don't, then you're bound to miss something and someone will regret it. I see it all too often at my office. A couple neglects to have a proper agreement drafted and they end up fighting over assets.

It may cost you between $300 and $500, but just the attorney's fees to negotiate a disagreement will run many times that, and that is if you don't have to take the issues to trial.

[DRFerron]

Originally Posted by RacheloftheBoatTramps

Can you title a boat under two peoples names?

Yes. My boyfriend and I are both on our boat's title.

[rockDAWG]

To OP:

Can you just sweet talk to him or may be give him a massage while asking him to buy s bigger boat using "his" money and you keep you money in the bank. This will make thing simple and the lawyer can't make any money from the deal.

If it does not work, we have Plans B and C or B plus C which is Plan D.

[RobGallagher]

I would offer this: Let one of you buy the boat. The other can put an amount into an account to cover more of the boat bills. This way one of you would spend more money, the other would eat the depreciation.

If things go south, one of you can walk away and the other keep the boat. Most importantly you won't have the stress of being "locked into a relationship".

I've seen more than a few "happy" couples blow it by complicating things and it seems that you might be a couple who thrives on simplicity. JMHO.

[Chris12345]

With an old boat, all cost is in the maintenance, depreciation is roughly zero. If they would follow your suggestion, and would split up after cruising, one would have borne 100% of the boat(ing) cost, the other one who keeps the boat 0%. Not a good idea.

Just a simple agreement that states in which ratio the original posters own the boat, and that, if one wants out, (s)he will get that ratio of the current value, or else the boat will be sold and the proceeds divided, should do.
Add an addendum to adjust the ratio if one party alone pays for major improvements on the way.

A breakup messy enough to make this arrangement a problem will make any contract a problem.

Originally Posted by RobGallagher

I would offer this: Let one of you buy the boat. The other can put an amount into an account to cover more of the boat bills. This way one of you would spend more money, the other would eat the depreciation.

.....
JMHO.

[tomperanteau]

We do settlement agreement quite often at my office. Unless they take everything into consideration, there could be trouble. You should let an attorney draw an agreement up. Should not take but a few hours and could save thousands in future attorneys' fees and costs.

[Minnewaska]

Originally Posted by RacheloftheBoatTramps

.....We are not married and don't have any intention of getting formally married, but we're beginning to think we might be together for awhile........

Then don't buy assets together. This is simple.

Attorney's would feast on trying to write agreements to accommodate this lack of commitment, then argue over its validity later.

[MikeinLA]

I would agree to keep the lawyers out of it if at all possible. You have already said that you can't go 50-50 on the boat, so let's say it's 70-30. Are you going to split upgrades and equipment costs 70-30 as well? What a pain. And what if you break up and nobody wants to sell the boat, but neither can afford to buy the other out, even if you could compute a fair value. Headaches! I would let him buy the boat, but stress that he must also pay for maintenance and upgrades. Half the slip rent & varnishing could be considered your "rent" for otherwise living for free. Put your cash into AT & T stock with a 6% dividend, and if you break up, I'm sure you'll be better off.

Mike