Can a boat be owned by husband and wife as Joint Tenants?

[Richard10002]

I was reading something about the digitisation of the Land Registry the other day, and I am recalling that, in the absence of an action to the contrary, property bought by several people is owned as tenants in common in equal shares. I am recalling that it requires some kind of deed to make the ownership a joint tenancy.

I wonder if the same could apply to boats....

 

[jfm]

Our posts have been leapfrogging each other... I need to be sure whether registration of the joint ownership of the 64 shares on the part 1 register is crucial or not, because as mentioned the boat is not on that register, it's on the SSR, and as you know that does not say anything about ownership. I think the bill of sale makes it clear that we jointly own the whole of the boat but I'm still not sure that it says anything about whether that ownership is as Joint Tenants or Tenants in Common.

FWIW, draft deed is here: https://www.dropbox.com/s/65is50czdc8t4gi/Declaration of ownership as Joint Tenants.odt?dl=0

No, part 1 is absolutely not crucial, though is useful in putting the matter mostly beyond doubt. The ssr does not say nothing about ownership; on the contrary it is prima facie strong evidence of ownership. As regards your last sentence, the BoS is indeed strong evidence that you acquired joint ownership but then you lose your way legally because joint tenants and tic are land concepts only. All that matters with a boat is whether you own it jointly or not, and it seems you do. You don't then have to prove further that you own it as "joint tenants" because it is a chattel
I can't read the deed because I'm travelling and on iPad only and it needs an app or something. But from the title of the doc is suspect it isn't drafted correctly. It needs to declare you own it jointly rather than as joint tenants.

 

[RupertW]

No, part 1 is absolutely not crucial, though is useful in putting the matter mostly beyond doubt. The ssr does not say nothing about ownership; on the contrary it is prima facie strong evidence of ownership.seems

I'm not convinced. I saw a boat I wanted to buy in Croatia a few years ago but was planning to change the name if I bought it. SSR is such that I was able to register it with the new name (and vinyl lettering) and have that in my hand ready for my first sail before we even concluded the price we were offering and the remedial work needed first. Croatian paperwork being what it was, it was about 3 months before everything went through and the boat we were living on became ours.

There is no requirement for a bill of sale or any evidence whatsoever, not even that the hull number matches the currently registered name of the boat. So I could go up to any boat I spot in a marina and have an SSR for it under my name by return of post.

 

[benjenbav]

100% onboard with jfm's comments in the various posts above, but it might help to illustrate what jfm is saying with regard to legal and beneficial ownership.

Basically any asset can have different legal and beneficial ownership structures. 'Legal' is the bit that counts for a third party, typically a buyer. 'Beneficial' is more relevant to the current owners.

So, jfm wants to buy a £1mio item which I say belongs to me. Notwithstanding the fact that I have the keys and a nice smile, jfm checks it out and finds its legal title is actually vested in me and my late uncle. I produce uncle Jimmy's grant of probate appointing me his sole executor: deal on - this is proof of the legal title.

Now, a complication arises, or does it? Turns out uncle Jimmy's will actually left everything he owned to me and my sister in equal shares. The will creates a trust where I have the legal title to everything in the estate (as sole executor) but the beneficial ownership of this particular item (not the whole estate) is 75% mine (Jimmy and I owned it in equal shares) and 25% my sister's, held (as to Jimmy's former share) in a trust of which I am the trustee.

Does this matter to jfm? No. He gets good title from me, acting for myself in relation to my original 50% beneficial share of which I am also the sole legal owner and also in my capacity as executor/trustee (and therefore legal owner) of the other 50% beneficial share.

jfm isn't at all concerned whether I account to my sister for her share and she can't intermeddle in the arrangements between jfm and me. Sis can threaten anything she likes, ranging from an injunction to telling my wife about the time I...(well let's not go into that ) and is - of course - concerned that I pay her her share. If I don't pay her share of the proceeds of the sale to her she will have all sorts of remedies against me, principally arising from a breach of the trust.

With some big-ticket items there are official records of legal ownership. Land (including buildings) is the prime example: the Land Registration Act 2002 provides that, where land is registered, the definitive legal title is what appears on the face of the register.

If, in the example above, the asset that jfm was buying was land, he would look at the register and pay capital money to the person named as the registered proprietor and get good title. If the registered proprietor was me and uncle Jimmy (deceased) then, if we owned it beneficially in equal shares, there would be a restriction on the register to state that one of the registered proprietors acting on his own cannot give a good receipt for money. To prove title I would - as above - need to prove that I was Jimmy's executor.

In the unlikely, but possible, event that circumstances were different from those described above and Jimmy and I had been joint tenants (joint owners) in equity (beneficially) there would not be such a restriction, and jfm would get good title by paying money to me alone. However, he would rightly insist on seeing the grant of probate (to prove I was the executor and, indeed, that Jimmy had left the stage) or on my re-registering the asset in my sole name, which I could do without consulting anyone else or seeking their acquiescence.

 

[Mobyduck]

.....but then you lose your way legally because joint tenants and tic are land concepts only.

Agreed, and our posts are leapfrogging again because if you look at post #19 above you'll see I had already reached the same conclusion. I have scuppered the draft deed which I linked in post 11.

100% onboard with jfm's comments in the various posts above, but it might help to illustrate what jfm is saying with regard to legal and beneficial ownership.

Great post! Enjoyed reading it.

I now have the RYA legal department's response to 3 questions I asked them (that was quick):-
1. In general, it does not make any difference to the joint ownership status whether a boat is registered on Part 1 or on the SSR
2. The wording on our Bill of Sale (new link) does make us joint legal owners
3. A declaration (by deed) is not strictly necessary but it provides further evidence of the intention/desire to hold the boat as joint owners (and, I would add, it makes it crystal clear that we are joint beneficial owners)
So, to answer my original question, how does one make it possible to sell a boat when a joint owner dies, without waiting for probate to be granted. Back to benjenbav:

In the unlikely, but possible, event that circumstances were different from those described above and Jimmy and I had been joint tenants (joint owners) in equity (beneficially) there would not be such a restriction, and jfm would get good title by paying money to me alone. However, he would rightly insist on seeing the grant of probate (to prove I was the executor and, indeed, that Jimmy had left the stage) or on my re-registering the asset in my sole name, which I could do without consulting anyone else or seeking their acquiescence.

But if you and Jimmy had been joint legal and joint beneficial owners, and an official copy of Jimmy's death certificate is available to prove that Jimmy has shuffled off this mortal coil, probate would be irrelevant. It would prove nothing to anyone because the executor (whether you or anyone else) would never have any right to deal with the boat in any way whatsoever in that capacity. The whole point of the right of survivorship is stated clearly by the RYA: 'An important consequence of joint ownership is the right of survivorship. This means that if one of the joint owners dies, his legal title in the boat passes automatically to the surviving joint owner(s).'

Here's my revised idea of how to sell a jointly owned boat without waiting for probate:
1. Make sure the Bill of Sale creates joint legal ownership
2. Make a declaration (by deed) stating that the parties have joint beneficial ownership
3. Obtain an official copy of the death certificate
4. Obtain a certified copy of the deceased joint owner's will to prove that they had not dealt with their share of the boat in the will (ie: left it to anyone and thereby severed the joint ownership and created co-ownership instead - see the RYA guidance)
4. Re-register the boat. If it is on the SSR probably no documentation will be needed. If it is on Part 1 the documentation will be needed.
5. Offer the boat for sale by the survivor as sole owner and draft the Bill of Sale accordingly. Produce all the above documentation if it is requested.
I don't see how an well-advised buyer could insist on seeing the grant of probate. Probate is evidence that the executors have the right to deal with the estate. They never get that right if a boat is jointly owned.

 

[benjenbav]

But if you and Jimmy had been joint legal and joint beneficial owners, and an official copy of Jimmy's death certificate is available to prove that Jimmy has shuffled off this mortal coil, probate would be irrelevant.

Aha! True, but I've already got the grant of probate for sorting out the rest of the estate so I could either prove Jimmy was dead with that or the death certificate.

 

[Mobyduck]

Aha! True, but I've already got the grant of probate for sorting out the rest of the estate so I could either prove Jimmy was dead with that or the death certificate.

I'll let you into a little secret. The shocking increase in the cost of probate "fees" (in reality a new tax), and the already eye-watering legal fees which are often charged for obtaining probate (£10,000 in the case of a relative for whom I was the executor) is making me wonder whether it's possible to create joint ownership of all assets and do away with probate entirely for the first death in a marriage where there are no complicating factors. The issue concerning the boat sale that was delayed because it took a long time to obtain probate is what got me thinking. If real property and bank accounts can be owned jointly so that the right of survivorship applies, why can't all assets be held in that way? Including boats.

 

[benjenbav]

I'll let you into a little secret. The shocking increase in the cost of probate "fees" (in reality a new tax), and the already eye-watering legal fees which are often charged for obtaining probate (£10,000 in the case of a relative for whom I was the executor) is making me wonder whether it's possible to create joint ownership of all assets and do away with probate entirely for the first death in a marriage where there are no complicating factors. The issue concerning the boat sale that was delayed because it took a long time to obtain probate is what got me thinking. If real property and bank accounts can be owned jointly so that the right of survivorship applies, why can't all assets be held in that way? Including boats.

It's the risk of the tail wagging the dog, I guess. There are lots of occasions where survivorship doesn't work very well. It definitely has its place, but things come along like wanting to leave the bulk of your estate to the next generation, or getting divorced, or many of the other things that complicate our everyday lives.

 

[Mobyduck]

Re: Joint ownership of a boat

It's the risk of the tail wagging the dog, I guess. There are lots of occasions where survivorship doesn't work very well. It definitely has its place, but things come along like wanting to leave the bulk of your estate to the next generation, or getting divorced, or many of the other things that complicate our everyday lives.

Agreed, but in our case it would work. And for a boat held jointly by husband and wife, where neither party would want to continue owning the boat if the other dies, it would work well. I mean, who wants to pay marina fees + insurance + cleaning for a boat which sits around waiting for probate to be granted?

 

[oldgit]

Pro Bono ?

OG, would like to point out that the readers of this post may ( may or not) have probably benefited (or not) from enuff legal advice to purchase a modest flybridge vessel.(In a tax efficient way of course.)
Free of charge.... I think ?

 

[Richard10002]

Re: Pro Bono ?

When I made my last but one will in 2007, (in contemplation of marriage), I was advised that, as I was leaving everything to my wife, the inheritance tax threshold was effectively doubled to what would be £650,000 today.

Thus the issue in the OP may only need to be considered if:

1) the estate is being left to more than just the wife.

2) the estate is worth more than £650,000, (I am assuming it is definitely worth more than £325,000).

3) the boat needs to be sold in order to pay inheritance tax.

I seem to recall that, if there is not enough cash/liquid assets to pay the inheritance tax bill, there is a way of deferring it until there is. It's over a year since I had to consider this, so I've forgotten the detail.

 

[Mobyduck]

Re: Pro Bono ? Yes! (Thanks)

The objective is to speed up the sale of the boat to save the cost of keeping it while waiting for probate. See my original post - there was a buyer from Day 1 (in fact there was competition for the boat because the price was keen) but the sale could not be completed for many months while probate was obtained and the estate had to pay marina fees, insurance and regular cleaning costs during that time.
Inheritance tax is a bit of a red herring really. I wish I had never mentioned it. I'm certainly not going to get involved in discussions about it because it raises my blood pressure too much.

 

[Richard10002]

Re: Pro Bono ? Yes! (Thanks)

The objective is to speed up the sale of the boat to save the cost of keeping it while waiting for probate. See my original post - there was a buyer from Day 1 (in fact there was competition for the boat because the price was keen) but the sale could not be completed for many months while probate was obtained and the estate had to pay marina fees, insurance and regular cleaning costs during that time.
Inheritance tax is a bit of a red herring really. I wish I had never mentioned it. I'm certainly not going to get involved in discussions about it because it raises my blood pressure too much.

Aha! All is now clear

The odds are that your other half wont want to keep the boat once you have shuffled off, so it would be best for her to be able to sell it quickly and stop the outgoings. Waiting for probate would prevent this.