DVC in a living trust

[Disney Dad ADL]

First of all, anybody considering a trust should hire an attorney who specializes in Trusts and Estates. It's a very specialized field, and the laws differ somewhat from state to state, so you need someone who knows what they are doing.

Secondly, anyone who has a trust should have a crystal-clear understanding of all of the instructions contained in the trust, and all of the ramifications of those instructions. There is no excuse for a trustee or beneficiary NOT knowing what a trust document says and means. If they are clueless (and a LOT are), how in the world do they know the trust actually does what they want, protects them in the way they want, gives them the financial and tax advantages they seek, etc, etc, etc?

Our timeshares, and other assets, are held in a trust. The timeshares (like all assets of the trust) are titled A, B, & C, trustees of the ABC Family Trust dated xx/xx/xxxx. The legal owner of those timeshares is the trust -- NOT the trustees. The trustees are simply those persons given the authority to make decisions for the trust. They do not individually own any of the trust assets.

Titling another timeshare purchase in the names of A, B, & C would be a totally different ownership and would NOT go in the same account as the trust assets...even though the names of the people involved were the same. Jim the person is NOT the same legal person as Jim the Trustee, and neither own any trust assets.

In the event of a death, any assets owned by the trust would be disposed of as specified in the trust document. That's what trust documents are for, and that is one reason why it is imperative that anyone with a vested interest in a trust should understand things very clearly!

Yes, that's a good explanation.
I think the main issue for me was how DVD handles membership issues in relation to the trust. Take for example the following scenarios:

1. You own 2 contracts with the same UY. 1 is owned under your name, the other is owned by the trust with you as the trustee. Will they be combined under the same membership number? My guess is yes, but I am not 100% certain.

2. You own a DVC contract under your own name, purchased in 2010. You transfer the contract to your trust in May 2015. Do you keep your membership perks? I suspect it should be yes based on what others have said regarding transfers to family members, although I could see DVD screwing it up.

 

[supersnoop]

1. You own 2 contracts with the same UY. 1 is owned under your name, the other is owned by the trust with you as the trustee. Will they be combined under the same membership number? My guess is yes, but I am not 100% certain.

No, they will not be the same membership. Say you own one contract in just your name, and one contract jointly with your spouse. Those will be two separate memberships. If the ownership interest is different in any way whatsoever, it's a separate membership.

2. You own a DVC contract under your own name, purchased in 2010. You transfer the contract to your trust in May 2015. Do you keep your membership perks? I suspect it should be yes based on what others have said regarding transfers to family members, although I could see DVD screwing it up.

I would expect the perks to remain in their grandfathered status in this scenario.

 

[Dean]

Yes, that's a good explanation.
I think the main issue for me was how DVD handles membership issues in relation to the trust. Take for example the following scenarios:

1. You own 2 contracts with the same UY. 1 is owned under your name, the other is owned by the trust with you as the trustee. Will they be combined under the same membership number? My guess is yes, but I am not 100% certain.

2. You own a DVC contract under your own name, purchased in 2010. You transfer the contract to your trust in May 2015. Do you keep your membership perks? I suspect it should be yes based on what others have said regarding transfers to family members, although I could see DVD screwing it up.

My understanding is they will not be combined under one master since the owner is technically different just like if you bought one yourself and one with your spouse they would not be combined. The qualifications would be the same in this situation, you're doing a name change not selling.

 

[JimMIA]

Yes, that's a good explanation.
I think the main issue for me was how DVD handles membership issues in relation to the trust. Take for example the following scenarios:

1. You own 2 contracts with the same UY. 1 is owned under your name, the other is owned by the trust with you as the trustee. Will they be combined under the same membership number? My guess is yes, but I am not 100% certain.

As others have said, NO. There is absolutely no difference between this example and one contract being in your name and another being in my name. Two different owners, two different accounts.

2. You own a DVC contract under your own name, purchased in 2010. You transfer the contract to your trust in May 2015. Do you keep your membership perks? I suspect it should be yes based on what others have said regarding transfers to family members, although I could see DVD screwing it up.

No...but yes. You don't keep what you had because that goes away when your ownership goes away, but you get new stuff that is the same. The trust contract would have the trustees listed as owners, and all owners would get a DVC member card and enjoy whatever perks were temporarily available at any given moment. Perks are easily the most insignificant aspect of ownership, and don't forget that they are transitory.

Titling is not something DVC messes up, usually. DVC titles accounts exactly the same as they are submitted to them by the title company. The problem almost always lies in the brokers (most of the time) and title agents (occasionally) who get sloppy with the wording of things and submit a titling instruction that is not precisely the same as the legal name of the trust, for example. Close is not good enough in asset titling; it's either right or it's wrong. We had these problems with both DVC and Wyndham transactions, but neither were the fault of the timeshare companies -- they were the ones who discovered the mistakes.

 

[DVCjj]

HELP PLEASE. Trust FINALLY completed. I've asked a similar question before and got wonderful suggestions/replies but the bolded sentence below is now the main question.

Goal: To keep ONE Membership #
- Own 2 Resales titled to me & DH, same UY, same Membership #.
- Definitely going to buy 2 Direct Poly 50 points, same UY

Obviously, if Directs are titled exactly as the Resales (me & DH) = same Membership #(4 contracts 2 UY's)
If Poly titled to brand new Trust = unwanted NEW Membership #.
If later this year, we change the Titles on the 2 Resales to the Trust, and I insist them to go under the Poly Membership #, will they do it? Why not?

Can someone who has done this PLEASE tell me if it makes more sense to make the TRUST the BENEFICIARY with all contracts titled to me & DH, thereby definitely making all contracts under one Membership #.

I love DVC CM's but honestly always seem to get someone who really doesn't know after waiting a long time on the phone. Not asking doofus attorney.

Thank you so much.

 

[DVCjj]

Sure, no problem. Of course, I'm not a lawyer, and we live in California, so it may be good idea to double check the wording with your lawyer.

We are currently in ROFR for a second DVC contract, and we have put our trust as the "owner" so to speak worded just as I mentioned above (with our real names obviously). It's a different UY than our first contract, so it will be a separate membership number no matter what, but if we pass ROFR, I'll let you know how it turns out with the trust and everything. I am not sure of the logistics if you have one contract in the trust and one with just your names on it. However, if you buy direct, it would solve that problem. You can put both of your 2014 contracts into your trust, then buy your direct Poly contract also in your trust, and everything will be unified.

I sincerely appreciated your help & comments when I was so upset as the Trust was being created. I didn't put the Resales yet into the Trust (and am definitely still buying Poly Direct) because the attorney continued to make errors. It is done as of yesterday. Today, a very well respected credit union where we have accounts posed a different scenario & I would love to get an opinion. See Post above.

Thanking you again.

 

[supersnoop]

Can someone who has done this PLEASE tell me if it makes more sense to make the TRUST the BENEFICIARY with all contracts titled to me & DH, thereby definitely making all contracts under one Membership #.

I can't see how making the trust the beneficiary changes anything. It kind of defeats the whole purpose of the trust.

The idea of the trust is that the trust can change hands and all it's assets are then controlled by the new trustee. If the trust is the beneficiary, then, upon your death, the estate and property must still go through probate in Florida in order to transfer the assets into the trust. That's what you want to do now, right?

 

[Dean]

HELP PLEASE. Trust FINALLY completed. I've asked a similar question before and got wonderful suggestions/replies but the bolded sentence below is now the main question.

Goal: To keep ONE Membership #
- Own 2 Resales titled to me & DH, same UY, same Membership #.
- Definitely going to buy 2 Direct Poly 50 points, same UY

Obviously, if Directs are titled exactly as the Resales (me & DH) = same Membership #(4 contracts 2 UY's)
If Poly titled to brand new Trust = unwanted NEW Membership #.
If later this year, we change the Titles on the 2 Resales to the Trust, and I insist them to go under the Poly Membership #, will they do it? Why not?

Can someone who has done this PLEASE tell me if it makes more sense to make the TRUST the BENEFICIARY with all contracts titled to me & DH, thereby definitely making all contracts under one Membership #.

I love DVC CM's but honestly always seem to get someone who really doesn't know after waiting a long time on the phone. Not asking doofus attorney.

Thank you so much.

Why not just put them all in the trust to start with. While there have been limited examples over the years, I don't think you'll have any chance of them combining them later if they are not combined initially. The only examples I know of were where they didn't combine resales for some reason when they should have and they would not go back and combine them. Not a big deal for different home resorts but it would be big between the two Poly contracts.

 

[DVCjj]

I can't see how making the trust the beneficiary changes anything. It kind of defeats the whole purpose of the trust.

The idea of the trust is that the trust can change hands and all it's assets are then controlled by the new trustee. If the trust is the beneficiary, then, upon your death, the estate and property must still go through probate in Florida in order to transfer the assets into the trust. That's what you want to do now, right?

The credit union Trust Director who I suggested this said it would not involve probate (and I am in IL which has same rules as FL) and would be a smooth transition for the daughters. They would simply bring in 3 pages of the Trust and identification.

 

[JimMIA]

Can someone who has done this PLEASE tell me if it makes more sense to make the TRUST the BENEFICIARY with all contracts titled to me & DH, thereby definitely making all contracts under one Membership #.

I don't understand your question. Make the trust the beneficiary of what?

There is no beneficiary to a real estate holding. If you title contracts in both your names, you are removing them from the trust. A trust governs the management and disposition only of assets OWNED by the trust.

A very common mistake is to create a trust and then not title any assets to the trust. You end up with an empty trust that does absolutely zero.

As supersnoop said above, if you titled DVC contracts in both your names and you both died simultaneously, the DVC holdings would go into probate (which happens to be one of the major things one tries to avoid with a trust).

 

[supersnoop]

The credit union Trust Director who I suggested this said it would not involve probate (and I am in IL which has same rules as FL) and would be a smooth transition for the daughters. They would simply bring in 3 pages of the Trust and identification.

Either he was wrong, or we don't understand what you're asking.

 

[JimMIA]

HELP PLEASE. Trust FINALLY completed.

No, the trust is NOT completed. The establishment of the trust is not complete until every asset you want governed by the trust is titled to the trust. Until assets are titled in the name of the trust, the trust is nothing but a piece of paper.

Goal: To keep ONE Membership #

- Own 2 Resales titled to me & DH, same UY, same Membership #.
- Definitely going to buy 2 Direct Poly 50 points, same UY

Obviously, if Directs are titled exactly as the Resales (me & DH) = same Membership #(4 contracts 2 UY's)
If Poly titled to brand new Trust = unwanted NEW Membership #.
If later this year, we change the Titles on the 2 Resales to the Trust, and I insist them to go under the Poly Membership #, will they do it? Why not?

I agree with Dean -- I think you are just asking for problems.

And, I think the problems are avoidable if you stop, take a deep breath, and take the time to do things right. I know very well how frustrating this can be, but don't let impatience make it much worse.

If you want the trust to govern the management and disposition of your DVC holdings, don't buy anything until you retitle your existing holdings to the trust. You would do that through DVC Member Administration and there would be some fee (hopefully nominal) involved.

Then, and only then, make whatever additional purchases you want to make, titling them to the trust exactly the same as your original contracts have been retitled. When you do that, you will end up with all four contracts in the same trust account.

 

[JimMIA]

Either he was wrong, or we don't understand what you're asking.

Or both!

 

[JimMIA]

The credit union Trust Director who I suggested this said it would not involve probate (and I am in IL which has same rules as FL) and would be a smooth transition for the daughters. They would simply bring in 3 pages of the Trust and identification.

This sounds to me like he is talking about making your daughters (NOT the trust) the successor trustees (NOT the beneficiaries) of the trust.

In that case, assuming they were adults, they would replace the original trustees whenever the specified circumstances (death, incapacitation, etc) occurred to the original trustees. If the daughters were not adults, persons specified in the trust would stand in their place as trustees until they reached majority.

To assume ownership of the trust, they would produce the appropriate parts of the Declaration of Trust (you might not want anyone to see all parts of the Declaration for various reasons) to whoever they were dealing with. They would also likely have to produce a letter from doofus attorney confirming that the trust was still active.

 

[DVCjj]

No, the trust is NOT completed. The establishment of the trust is not complete until every asset you want governed by the trust is titled to the trust. Until assets are titled in the name of the trust, the trust is nothing but a piece of paper.

I agree with Dean -- I think you are just asking for problems.

And, I think the problems are avoidable if you stop, take a deep breath, and take the time to do things right. I know very well how frustrating this can be, but don't let impatience make it much worse.

If you want the trust to govern the management and disposition of your DVC holdings, don't buy anything until you retitle your existing holdings to the trust. You would do that through DVC Member Administration and there would be some fee (hopefully nominal) involved.

Then, and only then, make whatever additional purchases you want to make, titling them to the trust exactly the same as your original contracts have been retitled. When you do that, you will end up with all four contracts in the same trust account.

I very much appreciate your advice. Aside from the problems with many attorney errors, I do feel pressured because Poly is going up in price very soon and that's why I was going to deal with the Direct(s) first. I know it will take a while to retitle through either the DVC suggested Title company (1st American) or Timeshare Title ($465 for 2 contracts to change title).

I've decided I need to definitely take a step back and though I sincerely appreciated the time and effort it took for you all to give suggestions, I think I need to end my posting about it. I'm just getting too frustrated and feeling very dumb. End of story. Thanks again.

 

[Disney Dad ADL]

I sincerely appreciated your help & comments when I was so upset as the Trust was being created. I didn't put the Resales yet into the Trust (and am definitely still buying Poly Direct) because the attorney continued to make errors. It is done as of yesterday. Today, a very well respected credit union where we have accounts posed a different scenario & I would love to get an opinion. See Post above.

Thanking you again.

Sure, I know this is all quite confusing. It's too bad you don't have a good lawyer who could guide you through all of this, it would make your experience a lot better.

It sounds like you got a lot of good advice from the other posters.

They are correct that the DVC Membership cannot have a beneficiary, so a trust couldn't be listed as a beneficiary of the DVC Membership. The DVC Membership is essentially a piece of real estate. There is a deed for DVC that is similar to the deed of your house, which only has current owners listed on it. Just like your house can't have a beneficiary, DVC also cannot have a beneficiary. There are instances where you would put the trust as a beneficiary, so it's probably why the credit union got a bit confused. For example, our lawyer has recommended that we put the trust down as a beneficiary for our retirement accounts because you can't place your 401k into a trust. If we were to pass away, the trust would receive all the money in it. Life insurance could also have a trust as a beneficiary.

I don't have any firsthand experience with multiple contracts and trusts when it comes to DVC unfortunately, so everything regarding DVC membership issues is just speculation, but it sounds like other posters have more experience with it that me. The safest thing to do is what they are suggesting. Switch your resale contracts to the trust first, then buy the Poly contracts under your trust. It sounds like the impending price increase for the Poly is a concern for you. On the other hand, if you are buying 100 points (it's going from $168 to $171 pp), it will only cost you an extra $300 dollars. If keeping everything under one membership number is important to you, then it may be worth paying the extra $300.

Good luck, I hope everything turns out well.

 

[jtkboston]

Our contracts are titled in the name of my husbands trust and my trust. So if one of us dies DVC rolls over into the other trust.

Ah, may I ask some questions to confirm some details? Your situation sounds similar to what I'm thinking for my family's contracts.

• Your contracts have joint owners, and the owners are the two trusts?
• I'll guess that your husband is trustee of his, and you of yours?
• Therefore you both get membership cards and the perks that go with it...and neither of you is an associate member?
• The trust ownership of DVC is in part intended to avoid out-of-state probate?
• How did you set up the title so that "DVC rolls over into the other trust"? Is that something about the trust beneficiaries for the first one to die, or something about the title of the DVC ownership contract? My (naive?) expectation of joint-ownership by two trusts is that in case one of you dies, their trust #1 would continue to hold joint ownership with the other trust #2, however the trustee of trust #1 would change as per its declaration?

 

[BWV Dreamin]

Ah, may I ask some questions to confirm some details? Your situation sounds similar to what I'm thinking for my family's contracts.

• Your contracts have joint owners, and the owners are the two trusts?
• I'll guess that your husband is trustee of his, and you of yours?
• Therefore you both get membership cards and the perks that go with it...and neither of you is an associate member?
• The trust ownership of DVC is in part intended to avoid out-of-state probate?
• How did you set up the title so that "DVC rolls over into the other trust"? Is that something about the trust beneficiaries for the first one to die, or something about the title of the DVC ownership contract? My (naive?) expectation of joint-ownership by two trusts is that in case one of you dies, their trust #1 would continue to hold joint ownership with the other trust #2, however the trustee of trust #1 would change as per its declaration?

"Yes" is the answer to all of your questions. The trusts are set up so that if either myself or DH dies, the assets from either trust roll over into the others. All assets musts be titled in both trusts name. It's not a " joint" ownership, but rather a " tenants by entirety" I think. If I then die, all assets roll down into my 3 sons trusts and they can then opt to keep them or sell them. The biggest advantage is that it avoids probate, which can get very expensive for out of state property.

 

[jtkboston]

"Yes" is the answer to all of your questions. The trusts are set up so that if either myself or DH dies, the assets from either trust roll over into the others. All assets musts be titled in both trusts name. It's not a " joint" ownership, but rather a " tenants by entirety" I think. If I then die, all assets roll down into my 3 sons trusts and they can then opt to keep them or sell them. The biggest advantage is that it avoids probate, which can get very expensive for out of state property.

OK, so this is a different sort of trust than what I have set up, whereby property can be moved into or out of the trust during the grantor's lifetime, and upon death the trust keeps what it had and the successor trustee can administer it. I think your strategy requires the trust be set up to transfer assets on the grantor's death rather than retaining them.

 

[BWV Dreamin]

We maybe talking about the same thing. Since all assets are titled in both trusts there is no rolling over until our children inherit these assists as successors. A trust was established for each child and if they choose to keep any assets will transfer into their trusts, tax and probate free. As long as one of us ( DH or myself)is alive, either of our assets held jointly in both trusts name,will transfer into the other's trust as the successor. Hope I'm not confusing you ( and hope I'm using the proper terminology).