I am purchasing a sailboat with a friend. We are two doctors who are both presumably on solid financial footing. Should we own the boat in an LLC to protect against potential personal liability? It will be insured and we both have significant personal umbrella policies but we are concerned about the unknown and opening up our personal assets to liability. The other concern is the exposure one partner may have for the actions of the other.
Great question. I'd say that although the personal umbrella policies mitigation the screaming need for the LLC, it's never a poor choice to tack on additional layers of protection. As I'm sure you already know, quarantining the sail boat in its own LLC "bucket" would go a long way towards protecting your personal assets (e.g., residence, medical practice, if you're owners) if a cause of action ever arose relating to the boat.
You'd also be well-served to form an agreement with your friend that discusses your rights, roles, etc. with regard to boat ownership. Are expenses paid equally? Who gets ownership if one of you passes away? What happens if one of you becomes disabled and can no longer use & enjoy the boat? An LLC combined with some level of succession planning would seem to make sense here. Feel free to reach out with additional questions, and best of luck!
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