Add owner to avoid probate?

[iLOVEartLARK]

Hi, my dad was just moved into a nursing home, and isn't able to handle his affairs anymore. I am his POA. He owns a contract with my mother, I am an associate. He was very adamant while we had our financial talks that he wants us to avoid probate as much as possible. I am trying to figure out if I can avoid probate on the DVC contract if I add myself as an owner onto his and my mom's DVC contract. I believe that when both of my parents are gone, that the contract will just be in my name, and then I can add future generations so that they can avoid probate. Does anyone have any experience with this?

 

[Sandisw]

We added our adult children to our Aug UY contracts in 2019. We did it so it is joint tenancy with right of survivorship. That means as each of us passes, the others remain owners. We will eventually do this with our Dec UY points unless the kids decide that the 475 they are own together is enough.

 

[Uh_Oa]

I work at a bank and this is done a lot with bank accounts to avoid probate. When one owner passes the asset remains in the name of the remaining owners. It's always a good idea to have a plan ahead of time rather then run around afterwards trying to figure it all out. I'm not familiar with Florida real estate law so getting an attorney or possibly a title company in FL involved would be helpful.

 

[DL1WDW2]

I am sorry you have to worry about financial during this time but you really should not delay. Call DVC Member Services for more advice. I recently found this booklet online to recommend also.

 

[DL1WDW2]

 

[DL1WDW2]

I posted this on another site so I hope it is alright to duplicate.
The Digital Diary is a completely new not so clearly defined worry.
Every state is considering how to legislate our afterlife currently .
All I know is it opens a whole new avenue for security risks and stolen identities… I do not want to worry about me after me too!

 

[DL1WDW2]

I also joked that DVC needs a 6 @66 booklet guide to include the legal aspects of ownership .
Seriously more important than all that other stuff!

 

[iLOVEartLARK]

We added our adult children to our Aug UY contracts in 2019. We did it so it is joint tenancy with right of survivorship. That means as each of us passes, the others remain owners. We will eventually do this with our Dec UY points unless the kids decide that the 475 they are own together is enough.

That's exactly what I was thinking! How did you do it? How much did it cost, and can you recommend a title company/lawyer?

 

[erionm]

That's exactly what I was thinking! How did you do it? How much did it cost, and can you recommend a title company/lawyer?

LT Transfers can do the paper work and their fees start at $175. If you call DVC, they will recommend a closing agent that will charge over $400.

 

[CarolMN]

Many POA documents contain a statement that the authorized person may not make gifts to himself or anyone he/she is obligated to support. You may have to have both of your parents sign the paperwork to add you to the deed. If you have siblings, there may be other complications/challenges later on.

You might also investigate establishing a revocable living trust for them. These can be very helpful to those who own property in more than one state.

I'm going through something very similar right now. It's hard to see your parents slowly decline. Good luck to you.

 

[iLOVEartLARK]

Many POA documents contain a statement that the authorized person may not make gifts to himself or anyone he/she is obligated to support. You may have to have both of your parents sign the paperwork to add you to the deed. If you have siblings, there may be other complications/challenges later on.

You might also investigate establishing a revocable living trust for them. These can be very helpful to those who own property in more than one state.

I'm going through something very similar right now. It's hard to see your parents slowly decline. Good luck to you.

Thank you for your attention to detail! I didn't know that about POA statement, I will have to check my document. If that is the case, I would probably have to have my mom add me and my brother (who might decline, he is over Disney) at a later date. My dad has advanced Parkinson's, but has been a huge Disney World fan since it opened in 1971! I appreciate the advice!

 

[Sandisw]

That's exactly what I was thinking! How did you do it? How much did it cost, and can you recommend a title company/lawyer?

We used First American, and it was a costly...$475. LT Transfers is less and I have read good things about them. I know what you are going through as we are dealing it with my dad and Parkinson's/Dementia, as well as my mom starting to have health issues.

Good luck!

 

[peabody58]

Revocable Living Trust with all the bells and whistles should keep you out of Probate jail. Here in Georgia, you still go through probate, but if you have a Trust, it's merely an administrative check-off.

 

[ldo]

As DVC is a timeshare with a deed, I'd guess it's analogous to a house. So, I'd consider gift tax implications. Same for bank accounts.
"When you add someone to your deed, the IRS considers this transfer a gift from you, which is subject to the gift tax. If you add your daughter to the deed of your house, the value of the house is split 50/50, gifting your daughter half the home's value." [Multiple online sources]

 

[iLOVEartLARK]

As DVC is a timeshare with a deed, I'd guess it's analogous to a house. So, I'd consider gift tax implications. Same for bank accounts.
"When you add someone to your deed, the IRS considers this transfer a gift from you, which is subject to the gift tax. If you add your daughter to the deed of your house, the value of the house is split 50/50, gifting your daughter half the home's value." [Multiple online sources]

This is how I understand the gift tax law... You are allowed to gift a person $15,000 per year (or as a couple, $30k) without paying gift tax, so my 1/4 share of 150 DVC points probably wouldn't put my parents over this limit. Anything you gift to an individual above $15k goes against your lifetime gift tax, which caps at around 11.58 million dollars, above which you have to pay gift tax. The gifter pays the tax, not the gifted.

 

[Rex1993]

This is how I understand the gift tax law... You are allowed to gift a person $15,000 per year (or as a couple, $30k) without paying gift tax, so my 1/4 share of 150 DVC points probably wouldn't put my parents over this limit. Anything you gift to an individual above $15k goes against your lifetime gift tax, which caps at around 11.58 million dollars, above which you have to pay gift tax. The gifter pays the tax, not the gifted.

You are correct. The only thing I would add is that the annual exclusion is currently 15K per person per recipient. So if both sides are married, i.e. parents gifting to adult child and that child's spouse, it's 60K. The other thing to keep in mind that over these limits requires a gift tax return (form 709) as well as any gift splitting.

 

[Lorana]

Our of curiosity, how is the value of “gifting” DVC ownership calculated? The cost of the points when I bought it? The cost now? This is not on my radar now, but my youngest turns 18 in 3 years, and once both boys are through college and/or moved out, we were considering adding them to our membership (so that our contracts will go to them when we pass to use or sell as they wish, but also so they can use it and have access to direct perks like AP discounts).

 

[RoseGold]

Our of curiosity, how is the value of “gifting” DVC ownership calculated? The cost of the points when I bought it? The cost now? This is not on my radar now, but my youngest turns 18 in 3 years, and once both boys are through college and/or moved out, we were considering adding them to our membership (so that our contracts will go to them when we pass to use or sell as they wish, but also so they can use it and have access to direct perks like AP discounts).

This is actually a pretty complicated tax question. Its complicated even more if you just "add" them and don't transfer to them. It's not like you can just "add" your kid onto your 1M house and act like the gift occurs when you want it to. DVC is real estate.

I would never jointly own anything with a person I'm not married to, outside the structure of something like an LLC or trust. If I were buying blue card, I would absolutely go the LLC/trust route. The ease of those routes will vary depending on your home state and your estate plan.

As for OP, I'd be talking to a lawyer. This is even more complicated with all the complicated issues of the POA and the state assistance, which does have a lookback, if he ends up on Medicare. This is not where I would be taking internet legal advice.

 

[Uh_Oa]

This is actually a pretty complicated tax question. Its complicated even more if you just "add" them and don't transfer to them. It's not like you can just "add" your kid onto your 1M house and act like the gift occurs when you want it to. DVC is real estate.

I would never jointly own anything with a person I'm not married to, outside the structure of something like an LLC or trust. If I were buying blue card, I would absolutely go the LLC/trust route. The ease of those routes will vary depending on your home state and your estate plan.

As for OP, I'd be talking to a lawyer now and start putting assets like this in trust, assuming that makes sense in estate planning. This is even more complicated with all the complicated issues of the POA and the state assistance, which does have a lookback, if he ends up on Medicare. This is not where I would be taking internet legal advice.

I agree with RoseGold. You should be talking to an attorney that knows estate planning. 20 years working at a bank I've seen the good, bad, and ugly. It can be complicated, having it all planned ahead of time will save you time and grief in the future.

 

[iLOVEartLARK]

Thank you all so much for taking an interest in this topic!

I asked the transfer company based in Florida about it and they replied, "Most POA documents give you the authority to transact real estate transactions. The best way for us to know is for our attorney to review it. I have attached a different type of deed preparation form for you to fill out, please send that, a copy of the deed and the POA to us and we can figure out how to properly address adding your names. We will set it up with Right of Survivorship which means when one of the joint owners passes, their portion goes to the remaining owners automatically. You do not have to make any changes to the deed for that until names are being changed on the ownership in the future and then it would be addressed with an affidavit of death along with a death certificate to show why that person is no longer able to sign and is no longer living."