How to Properly Transfer a Luxury Yacht into an LLC—And Why It Should Be Integrated with Estate Planning

By Christopher M. Brainard, Esq. – Expert in Maritime Law, Estate Planning, and Yacht Transactions & Litigation

Whether you're a yacht owner or a broker advising a client, one question arises more often than you’d expect:

“Should this yacht really be in someone’s personal name?”

If the vessel is currently titled to an individual—whether through the U.S. Coast Guard or the California DMV—they may be exposed to unnecessary risk. A smarter and more protective structure often involves transferring ownership into a Limited Liability Company (LLC)—and if done properly, the LLC itself should be held within a Living Trust for integrated estate planning.

This isn’t just a paper shuffle—it’s a legal and strategic upgrade that can impact asset protection, taxes, future sales, and inheritance planning.

⚓ Why Transfer the Yacht Into an LLC?

Holding title in your personal name can put you in the legal crosshairs in the event of an accident, lien, or lawsuit. Transferring ownership to an LLC offers:

  • Asset protection: Shields your personal assets from claims tied to the yacht

  • Estate planning integration: When the LLC is held by a revocable living trust, it ensures seamless inheritance without probate

  • Transactional flexibility: Enables you to sell the yacht by transferring the LLC membership, which avoids title and tax headaches

  • Tax neutrality: In most cases, transferring your vessel into an LLC wholly owned by your living trust does not trigger sales or use tax, because the beneficial ownership hasn’t changed

  • Privacy: An LLC structure offers discretion regarding ownership of valuable marine assets

⚖️ Estate Planning Considerations: Why It Matters

Transferring the yacht into an LLC that is then owned by your revocable living trust is not just a technical formality—it is a sophisticated estate planning strategy. But here's the catch:
This must be done correctly to ensure:

  • No accidental gift or transfer tax is triggered

  • The LLC is properly funded and documented in your estate plan

  • Successor trustees can manage or sell the yacht without court involvement

  • The transaction does not disrupt your insurance or your vessel documentation status

Too often, yacht owners attempt to structure these transfers without understanding the intersection between maritime law, corporate law, and estate planning—and that’s where serious (and expensive) mistakes are made.

This is why it's essential to work with someone who knows all three.

🛥️ How to Transfer the Vessel (Properly)

If the yacht is U.S. Coast Guard documented:

  1. Draft a Bill of Sale from the individual to their LLC

  2. File ownership transfer paperwork with the National Vessel Documentation Center (NVDC)

  3. Update documentation to reflect LLC ownership

  4. Ensure the LLC is then correctly titled and assigned to the owner’s revocable trust

If registered through the California DMV:

  1. Complete REG 262 (Bill of Sale) and REG 256 (Statement of Facts)

  2. Declare exemption from use tax based on transfer to wholly owned entity

  3. Update title and ownership records to reflect the LLC

  4. Amend trust schedules or provide assignment if the LLC is to be trust-held

💼 Why This Should Be Handled by an Attorney Skilled in All Facets

This type of legal work isn’t just about filling out forms—it's about protecting everything you’ve worked for.
As both a maritime law expert and an estate planning attorney, I understand how to:

  • Structure yacht ownership for liability protection and operational ease

  • Integrate that ownership into your revocable living trust

  • Prevent unintended tax consequences or probate complications

  • Advise yacht brokers and sellers on LLC membership transfers as a sale vehicle

Whether you're restructuring a vessel you already own or preparing for sale, let’s make sure it’s done right—from the hull to the holding company.

📞 Contact Us Today

If you or your client has a yacht titled in their personal name, now is the time to protect it properly.
Get peace of mind—backed by decades of experience in both maritime and estate law.

Christopher M. Brainard, Esq.
Expert in Maritime Law, Estate Planning, and Yacht Brokerage Transactions/Litigation
Law Offices of Christopher M. Brainard
📍 651 N. Sepulveda Blvd., Suite 2010, Bel Air, CA 90049
📞 (310) 266 – 4115
🌐 www.LawBrainard.com

This article is provided for informational and educational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship between you and Christopher Brainard, Esq. An attorney-client relationship can only be formed through a written and signed agreement. If you need legal advice about your specific situation, contact us for a consultation. [Christopher Brainard, 651 N. Sepulveda Blvd., #2010, Bel Air, CA 90049. Tel: (310) 266 - 4115. Email: christopherbrainard@gmail.com].

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