Advice on planning to pass on DVC to kids

[mushu90]

Situation - we have several kids that are working their way into adulthood and am thinking about long term planning for contracts. I recently passed ROFR on a 25 point contract with the intention to add on smaller contracts (less than 100) over the next few years.

The plan was to try to purchase similar contracts and include one of the children on each title so that, ultimately, each DVC contract would be controlled by an individual child. Our thought was that this would simplify the process of passing them on later in life and allow each child the ability to make a decision to keep or sell without the added stress of booking/borrowing/selling a large contract among siblings.

Just looking to see if anyone else did something similar or had suggestions for buying contracts with this plan in mind.

I would expect we would buy the future contracts directly to keep everything consistent.

Thanks in advance for any feedback.

 

[CarolMN]

The plan was to try to purchase similar contracts and include one of the children on each title so that, ultimately, each DVC contract would be controlled by an individual child. Our thought was that this would simplify the process of passing them on later in life and allow each child the ability to make a decision to keep or sell without the added stress of booking/borrowing/selling a large contract among siblings.

That plan is going to result in multiple memberships and a big pain to book trips if you want to use more than one contract to book a stay.

Consider establishing a living trust and titling all of the contracts into the trust. This requires an attorney and will be more expensive than joint membership, but you can specify via the trust who gets each contract. Trustees (probably you and your spouse) are treated as owners by DVC (for booking and perks). Also, property in trusts does not go through probate aǹd thus is private. Again, you need to consult an attorney to see if this is right for you. Good luck!

 

[Travel60]

In addition to separate contract issue above, be aware that any person on the contract can book reservations, bank, borrow, etc. If you ever have issues with one of your children (it happens), they could use it out from under you. Also, since you will be paying for it, their half is a gift under IRS rules. Probably won't exceed annual gift allowed but consider other gifting you do in the year.

 

[mushu90]

Thanks for the feedback. I had not considered some of those things.

 

[Brian Noble]

In addition to the great advice above, I'm not sure it ever makes sense to plan to pass something like DVC on to one's kids, unless they are already adults themselves and have an established willingness and ability to vacation at Disney parks regularly.

My kids are a good example, at 21 and 23. The younger one is willing to go with us to a theme park, but it is definitely not their first (or even fourth) choice in vacation destinations. The older one is a big fan, but it remains to be seen whether or not they'll be in a position to drop low-to-mid four figures in today's dollars on a Disney vacation every other year, remembering that they'd still have to buy tickets, food, and get themselves there and back.

 

[Her Dotness]

In addition to the great advice above, I'm not sure it ever makes sense to plan to pass something like DVC on to one's kids, unless they are already adults themselves and have an established willingness and ability to vacation at Disney parks regularly.

I heartily agree.

 

[CSLucas]

We have ours split up into multiple 30-pt contracts and will keep going that way. We aren't putting the kids on the deed (they are 4 and 6 and who knows if they will ever even want them), but I do think it's worth keeping the contracts small to make it easier to split up in the future (or to be able to easily sell off extra points as your vacation habits change). As long as you keep the same UY and title them the same way (so not adding the kids just yet) it's the same membership so it doesn't make booking any harder. You'll pay a bit more in closing costs, but that is immaterial over the life of the contract.
Your situation is obviously a little different since your children are already reaching adulthood, but our plan is to either sell everything in the next 10 years if the kids stop liking Disney (neither of us care for it, so the contracts are purely for the kids) or hold on to them in our name until we have grandchildren, at which point we would split them up between the kids but keep paying the dues.

 

[DVCRad]

We have ours split up into multiple 30-pt contracts and will keep going that way. We aren't putting the kids on the deed (they are 4 and 6 and who knows if they will ever even want them), but I do think it's worth keeping the contracts small to make it easier to split up in the future (or to be able to easily sell off extra points as your vacation habits change). As long as you keep the same UY and title them the same way (so not adding the kids just yet) it's the same membership so it doesn't make booking any harder. You'll pay a bit more in closing costs, but that is immaterial over the life of the contract.
Your situation is obviously a little different since your children are already reaching adulthood, but our plan is to either sell everything in the next 10 years if the kids stop liking Disney (neither of us care for it, so the contracts are purely for the kids) or hold on to them in our name until we have grandchildren, at which point we would split them up between the kids but keep paying the dues.

That’s very generous of you! If my kids get a contract while I’m alive, they are paying the dues. But I have teenagers and get sick of their mooching…

We plan on setting up a trust and goi g that route. We just haven’t gotten around to it yet. I don’t know if I trust legal zoom or another online service and I don’t really want to pay $4-5k for a lawyer. That’s the price of a small 25 point add on!