Advice on putting grown kids on contract

[jkomoros]

We just received our final contracts via email late yesterday. The timing just happens to coincide with Easter, and both of our grown "kids" are home this weekend (26 & 22). My understanding is that if their names are on the contracts, they can also receive discounts like DDP, AP, etc. Any advice on whether it's worth it to add their signatures to the contract as owners?

 

[spiceycat]

It is expensive plus if they problems financially then guess what you will lose DVC.

almost did this for my brother - a few years later he declared bankruptcy - so go with an associate.

they won't get the discounts - but will get to make reservations and when there since their ID will say DVC member they might get some discounts.

 

[dianeschlicht]

As Pat said, it is best to put them on as associates. They will still be able to make reservations etc, but you wont have the added issue of one of them should either fall into economic hard times and declare bankrupcy, or if one of them marries and goes through a divorce. In both of those cases, you COULD lose the DVC if they are listed as owners rather than associates.

 

[jkomoros]

Good points. I hadn't thought of divorce down the line. (Neither are married now, so divorce wasn't on my radar of considerations.) Does an associate mean that they can make reservations? Any other perk?

 

[dianeschlicht]

Good points. I hadn't thought of divorce down the line. (Neither are married now, so divorce wasn't on my radar of considerations.) Does an associate mean that they can make reservations? Any other perk?

They can make reservations, but they don't get the AP discount unless their legal address is the same as yours.

 

[JaxFLBear]

Good points. I hadn't thought of divorce down the line. (Neither are married now, so divorce wasn't on my radar of considerations.) Does an associate mean that they can make reservations? Any other perk?

· An "Associate" is a person named by the Purchaser or Purchasers who is only authorized to make reservations using the Member's Home Resort Vacation Points. Associates do not receive Member Cards and are not entitled to the benefits and privileges that are available to a Member. In addition, Associates may not access financial information related to Annual Dues and/or loan pertaining to the Membership.

 

[Rambler5678]

Can a Associate do tranfers as well as reservations?

If the member didnt pay their annual dues, would the associate be responsible for them?

What does DVC do with a contract when a member does not dont pay their annual dues?

Thanks

 

[CarolMN]

Can a Associate do tranfers as well as reservations?

Not 100% sure, but I believe so. AFAIK, an Associate can do any function involved with making reservationa or managing the points such as banking, borrowing or transferring.

If the member didnt pay their annual dues, would the associate be responsible for them?

No.

What does DVC do with a contract when a member does not dont pay their annual dues?

Thanks

The first step is to "freeze" the account. In other words, no reservations can be made and I think any existing reservations are canceled as well (not 100% on this last, though). At some point if dues are not paid, Disney will take the legal steps necessary to void the contract and take back the points.

 

[macosx]

As Pat said, it is best to put them on as associates. They will still be able to make reservations etc, but you wont have the added issue of one of them should either fall into economic hard times and declare bankrupcy, or if one of them marries and goes through a divorce. In both of those cases, you COULD lose the DVC if they are listed as owners rather than associates.

Here's an idea, but it will probably complicate things further. Use DVC as collateral for a IOU loan. You can forgive part of that loan each year as a gift. Certain annual gifts are supposed to be declared and may be subject to taxation in case a large number of points are involved. If bad times should happen, you'd have some standing to repo your timeshare. From a contract standpoint, I don't think they can liquidate the timeshare that you own part of, especially if it's clear you own a majority. Maybe some documentation to that effect may be useful (or it may be sufficient to have 3 people on the contract, you, spouse, other and each would effectively own 1/3). Even in divorce, I don't think they can do much with timeshare when others are involved, unless they receive some cooperation. At worst, they could demand 1/3 points per year (paying 1/3 maintanance) that a 1/3 partner may be entitled to. If you used the points, I'm not sure how the courts would figure out what you would need to pay if any. You would argue that it's worth nothing if not used. Plus if you're paying all the maintanance, that makes the argument further. Things can get messy, but it might not be that bad an idea. The expected savings (90% chance of saving $200/year) are worth much more than the expected trouble (less than 2% chance of losing $10,000) in my view.

 

[CarolMN]

Here's an idea, but it will probably complicate things further. Use DVC as collateral for a IOU loan. You can forgive part of that loan each year as a gift. Certain annual gifts are supposed to be declared and may be subject to taxation in case a large number of points are involved. If bad times should happen, you'd have some standing to repo your timeshare. From a contract standpoint, I don't think they can liquidate the timeshare that you own part of, especially if it's clear you own a majority. Maybe some documentation to that effect may be useful (or it may be sufficient to have 3 people on the contract, you, spouse, other and each would effectively own 1/3). Even in divorce, I don't think they can do much with timeshare when others are involved, unless they receive some cooperation. At worst, they could demand 1/3 points per year (paying 1/3 maintanance) that a 1/3 partner may be entitled to. If you used the points, I'm not sure how the courts would figure out what you would need to pay if any. You would argue that it's worth nothing if not used. Plus if you're paying all the maintanance, that makes the argument further. Things can get messy, but it might not be that bad an idea. The expected savings (90% chance of saving $200/year) are worth much more than the expected trouble (less than 2% chance of losing $10,000) in my view.

Not sure how that plan would/could get past ROFR.

Since OP apparently wants the kids to qualify for the DVC discounts, the kids need to be listed as owners or live at same address as parents.

Other "risks" (besides bankruptcy or divorce) to consider include:

*No sale of the contract can be made unless all owners sign off on it (doesn't matter who originally paid)

*All future add on contracts must be titled exactly the same (or a totally separate contract must be purchased containing the minimum number of points).

*Discounts come and discounts go. No guarantees at all on perks and discounts.

OP needs to decide if the risks warrant the adding the kids so they can get discounts that they may or may not use on a regular basis. For some families it will be worth it and for others it will not.

 

[debbiepump]

My sis did that (put her kids on her DVC), one (of the kids) had a lien placed against her by the IRS-need I say more????

 

[Cruelladeville]

First of all, if you want to get tickets for your adult children, go ahead. They don't have ticket police--just call and tell them how many tickets you need. If they ask if your kids live with you--no one asked me--it's up to you what you say. When you pick up the tickets, you will pay for all of them at one time. The only thing they ever wanted to see was my DVC card.

As for placing adult children on the deed:My DD's good-for-nothing husband lost his job, and I called Disney to have payments and dues taken from my account so they wouldn't lose the contract. I did this for nearly two years, then DD finally kicked the bum out and filed for divorce. DVC contract was listed as a liability, so the judge ordered it sold, and my money was going to be down the tubes. I "bought" the contract by paying what was left. Disney worked with me, told me what to write for ROFR, and told me what I needed a closer to do for me so the contract could be put into my name. It was confusing, but they were helpful as they could be so I didn't lose two years of mortgage payments and dues. I found that if your name is listed on anything, it's an asset/liability, and if you get into trouble, the court will order it sold to satisfy your obligation.

 

[dianeschlicht]

First of all, if you want to get tickets for your adult children, go ahead. They don't have ticket police--just call and tell them how many tickets you need. If they ask if your kids live with you--no one asked me--it's up to you what you say. When you pick up the tickets, you will pay for all of them at one time. The only thing they ever wanted to see was my DVC card.

That's interesting, because my adult children were required to have IDs that showed they resided in the same residence as me in order to keep the discount. We were required to show IDs for everyone who was getting a ticket in their name.

 

[macosx]

My sis did that (put her kids on her DVC), one (of the kids) had a lien placed against her by the IRS-need I say more????

Yes, please. What happened? Assuming you'll keep the contract thru 2042, how does the lien impact the use of DVC? Did the lien impact your sister in any other way aside from DVC contract? Did the IRS go after more than a fractional share? I guess there are different ownership categories for real estate that may apply.

Joint ownership with rights of survivorship versus “tenants by entireties” and other divorce info: http://www.alperlaw.com/joint_ownership.html

Did (or can) the IRS lien force the liquidation/sale of the property? If so, I believe the worst outcome is the forced sale and the IRS confiscating a fraction of the recovered amount. Unless the kid is declaring some form of bankrupcy, paying back whatever obligations from the lien is the presumed goal, so I think liquidation is very rare, and even then, the marketplace for DVC resales is active and you'd get a fair price. Buying back or buying out would cost transaction costs that are relatively modest. Ownership interest is also diluted by number of owners.

Potential problem, yes. Likelyhood of worst case outcome, very rare. It's prudent to avoid the situation, but it's not something to avoid completely. In fact, if the parents are retired, and kids are responsible adults with kids of their own, I don't see why not. Putting minor kids is another discussion.