DVC and Estate Planning

[Jimbo]

This is kind of a morbid question, I guess, but how is a DVC membership handled when you die? Our son's GF lost her mother recently, and apparently her estate was prety messed up, and is going through probate. So he pressuring us to be prepared.

I'm not sure what I'm even asking, to be honest with you. I'm sure that our contracts are part of our estate, but I know that no one other than me understands DVC. If DW and I were to die suddenly, what would happen? How would our heirs even know what to do, who to call, etc.?

 

[Blahnde]

I am not an expert, but what I do know is that your DVC contract can be handed down to your heirs. The best way to do that may be a matter of opinion. I also know that if you do not have a will, the courts in your state/county will decide what to do with all of your belongings, including your DVC contract(s). Therefore it is better to have a legal "plan;" this could be a will, a trust, etc. Without a legal "plan" for your estate, the courts decide and I just can't think that is the best thing for anybody!

I would talk to a CFP (certified financial planner) and/or an estate lawyer. Yes, I know that is not free, but this is ALL your stuff and I cannot think of a better way to spend money than making sure your family (and not the government!) gets your stuff! But then I'm a tax preparer, and I spend a great deal of my time trying to prevent the government from getting my client's money!

Blahnde

 

[Jimbo]

We do have a will, splitting our assets between our two kids. Mostly, that will be pretty simple, I think. But while they know we own a Disney timeshare (we've taken them on plenty of trips), that's about all they know.

So maybe my question is more along the line of the mechanics. What steps would they take if the worst happened? Who would they contact?

 

[covereddish]

Well, I am not an expert either, however, my husband's sister was killed in a car accident, and I did learn a few things from that incident.

I have a folder labeled "important documents" (I know that sounds dumb, but I figured, if someone were looking through my bills, that label would jump out at them)

Anyways, I have a piece of paper with info like that: bank name and account number, savings account number, life policy number and name, auto insurance agent and number, etc.

Now that you mention it, I need to add the DVC Guest Services number to that, and our member number.

That's what I would do. The DVC reps can guide them from there!

 

[wendyinoc]

I'm not a lawyer but will finish probate next month. I have been in probate so long my lawyer died and I had to get a new one(i'm not kidding). I would say court will decide who is next of kin or if you have a family trust/will you decide. I suggest you decide and talk to someone who is familiar with your state's laws. Probate is just ugly.I like the idea of a folder. Also a folder or bin for please destroy upon death. Somethings you should not see.

 

[Duckieluckey]

We have two 250 point contracts. Our intention is to leave each child a contract. The contracts are titled to my wife and me as “joint tenants with right of survivorship.” Our intention is to have the contracts re-titled adding a child to each. The cost is about $400. In this way the DVC contract does not pass through the estate.

 

[Judy WI]

Our intention is to have the contracts re-titled adding a child to each. The cost is about $400. In this way the DVC contract does not pass through the estate.

Placing your children on the title opens up a whole different can of worms. If they run into money trouble, divorce, death the contracts will be included as their assets. A better thing might be a trust estate. We found dealing with probate is a nightmare but one grandparent had everything is a trust and it was very simple. Of course it depends on your state laws.

 

[SuzanneSLO]

Because DVC is a real estate interest, it is possible that if your heirs are probating your will in your home state, your heirs will also need to hire a lawyer in Florida (for WDW or VB) or S Carolina (for HH) to probate that property and allow it to be legally transferred to your heirs. DVC's member Administration will suggest you contact the local bar associaiton to find a lawyer.

If your DVC interest is held in a trust, you should be able to avoid the FL/SC probate process, but still may need a local lawyer to draft the necessary documents to change the trustee.

Best of luck -- Suzanne

 

[dis-happy]

Everyone should have a revocable living trust and put their major assets, including all real estate, into it. Then you don't have to worry about probate and you won't have to be paying attorneys in every state where you own real estate to do the probate.

 

[JimMIA]

I'm not a lawyer but will finish probate next month. I have been in probate so long my lawyer died and I had to get a new one(i'm not kidding).

I would say court will decide who is next of kin or if you have a family trust/will you decide.

I suggest you decide and talk to someone who is familiar with your state's laws. Probate is just ugly.

I think this is as close to a perfect answer as you are going to get, and the gist of it is bolded above. The real question of estate planning is this: WHO do you want to decide what happens with your assets?

Wendy's answer is the best one -- YOU decide. But you have to make those choices in advance.

There are a million ways to set up estates, and the best one for a particular family depends on their family composition, the nature and amount of their assets, and dozens of other variables.

Everyone should have a will, but a will doesn't solve all your problems -- especially if you have substantial assets. Wills are blunt instruments, and they often allow zero flexibility. Wills are better than nothing at all, but they still have to be probated -- which is a long and costly journey.

Variations on joint ownership solve the probate problem, but they can cause a dizzying maze of assets for heirs to decipher. We used a family trust, but in funding the trust, I had to transfer assets from their former joint ownerships into the ownership of the trust. My father - bless his heart - had assets in 31 different joint-ownerships! Every time his financial picture changed, he would try to "even things up" by opening a new joint ownership account. Thank goodness we got that mess straightened out before he passed away!

Trusts can be good, if properly set up and FUNDED (a trust which is created but not funded is just inferior toilet paper). But they are not for everyone, and may not be your best choice. Whatever you do, do NOT go to Office Depot or your friendly broker and get a blank Declaration of Trust form and fill it out yourself. Establishing a trust properly is a lengthy, detailed, and costly endeavor. Establishing a trust badly is worse than doing nothing in many cases.

The only way to get a sensible answer to your family's specific estate-planning needs is to contact a lawyer in your state who specializes in trusts and estates. Good estate lawyers are not cheap, but they are a bargain in the long run.

 

[Saratoga Souris]

My Father died last year so my mother is in the process of Re-writing the Title on her DVC. My father's name is being removed (she had to provide a Death Certificate) and she is adding all 3 childrens names, making us "Joint Tenants with Right of Survivorship". Our DVC guide helped with everything. The total cost was around $325.
This way.... no probate!!

 

[JimMIA]

My Father died last year so my mother is in the process of Re-writing the Title on her DVC. My father's name is being removed (she had to provide a Death Certificate) and she is adding all 3 childrens names, making us "Joint Tenants with Right of Survivorship". Our DVC guide helped with everything. The total cost was around $325.
This way.... no probate!!

For an American, that would be a solution to the probate problem (and only the probate problem) for this one particular asset. And since the property is located in Florida, Florida and U.S. laws would apply to the real estate transfer and any associated tax issues. I don't know anything about Canadian law, or American law as it applies to property owned by citizens of other countries, so you'd have to speak to a Canadian attorney to see if there are implications for your family there.

However, regardless of where you live, avoiding probate with a DVC account is only solving one potential problem with one asset. That's not the same as an effective estate plan -- all it's doing is transferring ownership of one asset in a manner which avoids probate. An effective estate plan would not only consider orderly transfer of all of the assets, but continuity, taxes, management, and a host of other issues.

There are also some landmines in joint ownership. One is that each joint owner is responsible for 100% of the obligations of the asset. In addition, all joint owners have to agree on anything that is done with the asset. I'm not talking about the use of your DVC account, but if you wanted to sell it, all four of you would have to agree to every aspect of the deal.

 

[RLCarmichael]

I have my adult sons on the title. That way they have the full benefits of membership even when they finish school and move out. Their future familys will then also be able to get APs because they will be living at the same address as the member. When they move out, they will be able to use points at the annual fee cost which is a heck of a deal for them!

There is the understanding that they are MY points, bought and paid for by me. I actually have a limited power of attorney for buying and selling DVC from both of them.

When I kick off, my "share" of the membership becomes theirs along with the responsibility for the annual costs. What I'd like to go eventually is have equal number of points in contracts so that they could divide them later on.

 

[mnasf]

When we bought our our DVC membership, we had it titled in the name of our trust. We had to pay $200 in legal fees at the time we bought our membership, but if something happens to either one of us, we do not have to worry about re-titling anything.

 

[cmd128]

Jimbo, I am no legal eagle but in response to your question about how your family would know who to call, etc. I bought a book, I think I got it thru a catalog, Miles Kimball or one of those. The book has all sorts of topics & you can just add the info you want them to know....just in case. It gave me some peace of mind. My kids are all grown & they didn't know that we had insurance for a nursing home in case we were hurt, etc. It's also good for a spouse. It is very confusing when someone dies & there it is, all in black & white for them to refer to.

 

[senecabeach]

Well, I am not an expert either, however, my husband's sister was killed in a car accident, and I did learn a few things from that incident.

I have a folder labeled "important documents" (I know that sounds dumb, but I figured, if someone were looking through my bills, that label would jump out at them)

Anyways, I have a piece of paper with info like that: bank name and account number, savings account number, life policy number and name, auto insurance agent and number, etc.

Now that you mention it, I need to add the DVC Guest Services number to that, and our member number.

That's what I would do. The DVC reps can guide them from there!

sorry..on review ..too personal

 

[JonJ]

I have a question for anyone who has DVC in a trust (or trusts): how does DVC membership work with trusts (the ability to make reservations, discounts, etc.)? My wife and I each have trusts. I doubt that we would we put it in both of the trusts. If it is in one trust, does just that person have the membership, or can both have the membership? Thank you!

 

[JimMIA]

I have a question for anyone who has DVC in a trust (or trusts): how does DVC membership work with trusts (the ability to make reservations, discounts, etc.)? My wife and I each have trusts. I doubt that we would we put it in both of the trusts. If it is in one trust, does just that person have the membership, or can both have the membership? Thank you!

I think these questions should really ONLY appropriately be addressed to your own estates & trusts attorney, who is thoroughly conversant with the law in your state and who has a detailed understanding of your personal and financial situation. That said, I'll try to give some general responses to your questions.

Our DVC is held in a family trust. However, I would never recommend that someone form a trust for the purpose of owning one asset. Our DVC account is truly an insignificant asset in our trust, which was created to serve our overall needs.

As far as how it works, I don't think a trust ownership of a DVC account works any differently than a trust ownership of any other asset.

DVC specific, we have the trustees of the trust (my two adult daughters and I) listed as owners (which we are) and our spouses as associates. We all have the ability to use the account, but because it is held by the trust, all three of the trustees have to sign off on any ownership decisions. ALL of us (trustees and spouses -- owners and associates) have member cards and enjoy those privileges...which are negligible, to be honest. The last time I flashed my "blue card" was to get free valet parking -- a $10 value.

I don't know whether or not your two trusts could co-own a DVC account. Logically, it seems like they could in the same sense that two people could co-own a DVC account. But whether it would be a sound legal/financial arrangement to do so is another question.

You could obviously form a third trust with both of you as trustees, but again, I wouldn't do that unless it made sense for other reasons. Nobody can give you any advice on that without detailed information about your specific financial situation.

 

[disneynutz]

I also have this, yes and also a will, which changes at times depending how I'm treated,...BUT...haven't allocated my DVC in the will...yet.

Why?? Well...my DH has passed, I have no children or siblings and certainly want to bequeath my DVC to someone confused3 ) who also has a love of Disney and will appreciate having it.

This is a real problem for me since no one, cousins, cousins kids, friends care much to want to even go to WDW, either with me or alone as a family. Though, on occassion they go (hey..its free).
That's really OK because I love my solo trips, in a 1 bdrm, but doesn't help when thinking about what to do with DVC.

So...I have other options:
1. Live till I'm 97, when my DVC expires. (1st choice)
2. Bequeath DVC to maybe the Make a Wish Foundation.
3. Leave it to a DIS friend.

Oh...yea, the other problem...WHO do you want to decide what happens with your assets?
Sorry I'm ranting.

I'll be your friend.

 

[senecabeach]

I'll be your friend.

Thanks disneynutz..really pushing for that 97 mark though !!