DVC value during divorce

[brookmey]

My sister is currently going through a contentious divorce in Michigan after 24 years and they both have lawyers. They have 2 DVC contracts, 150 points at SSR and 150 at AKV. She wants both since husband hasn’t been to Disney World in 10 years and has no interest in going. During those 10 years, she and/or her kids used the points or she let our brother use them.

Husband wants $60,000 for both contracts. He said he called Disney and was told each contract was worth $30,000. He has no proof, just his word. They didn’t even pay that much when they bought the contracts, so my sister had a good laugh at that. She called Disney and was told to check resale sites for approximate value. She did that and has screen shots of what contracts like hers are going for, which she included in her counter-proposal. Husband is contesting her screen shots as proof and now wants to each take a contract. They’ve been going back and forth on pretty much everything, so they’ve going to trial in September.

The contracts are really important to her. Going to Disney with her kids was one of the few bright spots in her marriage, so she plans to fight for them. Her husband knows this, so she thinks he’s using them to hurt her. She has no problem buying him out, but not at $60,000 for both. Her lawyer knows nothing about DVC, but she thinks showing the judge the resale values will be enough to give him a valuation amount to settle on.

For those who have experience with divorce and DVC, is a resale site good enough or accurate enough for a judge? Or any advice I can pass along to her? Thank you in advance.

 

[VGCgroupie]

Not an expert in any of these things but here are a few points I would make.

Have her focus on the fact that DVC is a timeshare, avoid using the terminology DVC or Disney.
Timeshares come with a financial burden each year and you are committed to the end of the contract date.
Resale should be considered not direct from Disney.

Lastly there is ZERO chance I would pay that much $ via divorce that is WAY overpriced. I would fight to sell the contracts on the resale market and neither person gets them before Id give 60K for those 2 contracts.

 

[crvetter]

So what I would do in this situation is get a "broker opinion" on what the contract would be worth and treat this no differently than any other real estate divided up in a divorce. The only caveat is that for more tradeable deeded assets (homes, condos, etc) you can get an appraisal that would be better, ultimately.

Once you have the broker opinion, I would say that is the fair price to be included in the divorce as the value, and likely what the court would accept. They likely won't accept the new purchase price (which is what her soon to be ex likely was arguing for) because the value in the proceeding isn't what it would cost but what it would sell for.

She can always argue that he can accept the "broker opinion" or they sell the assets at which point he will likely get less sense the market softened (not getting asking) and having to pay the broker commission (8-10%) on his portion. So spin it as his best interest to accept the true price.

This site is good for estimating the value, and I'd say it will be on the higher end of the possible sale prices. So your sister would be more than fair proposing this as the value. It looks to be about $16,500 for AKV and $15,000 for SSR.

https://www.dvcresalemarket.com/selling/what-is-my-dvc-contract-worth/

Also, if any of these have direct benefits attached, make sure (if she keeps the contracts) that she lets DVC know it is through a divorce decree. Generally the benefits should transfer to her when the deed name change process, though no guarantee there. This is inconsequential (no value to the court) so I wouldn't even mention it as reason for wanting to keep the contracts, or anything.

Though I'm not a lawyer but some of this is from my own personal experience, but the state was IL so things would be different state by state. As advised above explain to the lawyer it is nothing more than a deeded leasehold timeshare and show the broker opinion. There is no way the her lawyer shouldn't understand that (if not I'd consider a different lawyer to handle the case).

 

[kanerf]

You can look on DVC Resale Market and other sites to see what similar contracts are selling for. It won't be the price the husband is quoting.

 

[Brian Noble]

a contentious divorce in Michigan

I am not a lawyer, but am currently in the midst of a divorce in Michigan. The good news is that state law treats things very equitably, and the courts are used to determining the valuations for things that aren't dollar-denominated and accounting for them properly. Timeshares are viewed as assets, even if they are essentially worthless. These are not, so they will either have to be valued somehow, or they will have to be sold and the proceeds divided.

There is room for arguing over the value if they are grandfathered points that can be used to book all future resorts. That's because they are "worth more" than points you buy resale today, which cannot be used the same way. But there is also an argument that the value is just the value on the secondary market, because that's what you'd get if you sell them. Either way, I would use one of the DVC market reports that gives prices for closed resales, and I would not rely on listing prices.

But, my real advice to your sister is this: Don't argue over it---or, for that matter, much of anything. Let the court/mediator figure it out, because they will do so fairly overall. At the end of the day, she'll have about half of the couple's total marital assets, and the only question is in what form those take. The more arguing there is, the more time her lawyer is going to bill, and that just takes money out of her hands.

Along the way, my advice would be to be willing to be flexible about the details. Whatever they are valued at, he's going to get half---whether in the form of one of the unsold contracts, half of the proceeds of sale, or an equivalent asset/cash for half of that valuation. It probably does not matter how that happens. If he gets one of the contracts, your sister will have extra assets with which to buy a replacement. If she doesn't end up with such an asset, that probably means she'd be in the hole if she kept both contracts anyway.

In fact, if he thinks he's getting over on your sister by taking a contract, let him reap what he sows. He'll then be stuck with something he'll have to sell to get any value out of, because he doesn't ever want to go. She can just buy an (almost) equivalent replacement. Yes, there is sentimental value, but only because she has decided there is. Replacement points are still DVC points, and they spend (almost) the same way. So if he insists on $30K each, agree but only on the condition that he takes one of them. If he isn't willing to do that, it means he agrees they aren't worth $30K.

One of my spiritual advisors has repeatedly given me very sage advice about this whole process: I don't have to show up to the fight, even if I am invited to do so.

 

[Lumpy1106]

I would give him one, you take the other - which one does she want? Let him do the heavy lifting if he thinks one is more valuable than the other, or just agree to swap. He's wrong about the valuation - just check any resale site. @Brian Noble is right, she is wasting her own money if she fights about it - so don't.

 

[lilsonicfan]

Really wise advice from Brian Noble there. She can always re-buy either SSR or AKV very easily, let him take one and be saddled with yearly dues he may not even realize he'll be on the hook for. Let him have the satisfaction of thinking he pulled a fast one!

 

[tx911]

I would give him one, you take the other - which one does she want? Let him do the heavy lifting if he thinks one is more valuable than the other, or just agree to swap. He's wrong about the valuation - just check any resale site. @Brian Noble is right, she is wasting her own money if she fights about it - so don't.

This is what I would do. Let him have one and be saddled with dues he doesn't want, then she can pick up another resale contract for herself if she wants.

 

[Tatebeck]

Those would sell for around $100 per point (SSR maybe even less) So that would be around 15K value each. If she paid him out for his half it would be around 7.5k each or 15k total and I wouldn't budge and give them a penny more than that especially if he hasn't been in 10 years. Worst case I would try to take the AKV contract and let him deal with the SSR contract lol and then buy another contract with 15k from the divorce. There is nothing else you can use to value them other than the resale market value because if they can't reach an agreement they would have to sell them both on the resale market and split the proceeds that way

 

[brookmey]

You can look on DVC Resale Market and other sites to see what similar contracts are selling for. It won't be the price the husband is quoting.

Thank you. That is what she used and her husband is way off. Lol

 

[brookmey]

Not an expert in any of these things but here are a few points I would make.

Have her focus on the fact that DVC is a timeshare, avoid using the terminology DVC or Disney.
Timeshares come with a financial burden each year and you are committed to the end of the contract date.
Resale should be considered not direct from Disney.

Lastly there is ZERO chance I would pay that much $ via divorce that is WAY overpriced. I would fight to sell the contracts on the resale market and neither person gets them before Id give 60K for those 2 contracts.

Thank you

 

[brookmey]

Those would sell for around $100 per point (SSR maybe even less) So that would be around 15K value each. If she paid him out for his half it would be around 7.5k each or 15k total and I wouldn't budge and give them a penny more than that especially if he hasn't been in 10 years. Worst case I would try to take the AKV contract and let him deal with the SSR contract lol and then buy another contract with 15k from the divorce. There is nothing else you can use to value them other than the resale market value because if they can't reach an agreement they would have to sell them both on the resale market and split the proceeds that way

Thank you

 

[brookmey]

So what I would do in this situation is get a "broker opinion" on what the contract would be worth and treat this no differently than any other real estate divided up in a divorce. The only caveat is that for more tradeable deeded assets (homes, condos, etc) you can get an appraisal that would be better, ultimately.

Once you have the broker opinion, I would say that is the fair price to be included in the divorce as the value, and likely what the court would accept. They likely won't accept the new purchase price (which is what her soon to be ex likely was arguing for) because the value in the proceeding isn't what it would cost but what it would sell for.

She can always argue that he can accept the "broker opinion" or they sell the assets at which point he will likely get less sense the market softened (not getting asking) and having to pay the broker commission (8-10%) on his portion. So spin it as his best interest to accept the true price.

This site is good for estimating the value, and I'd say it will be on the higher end of the possible sale prices. So your sister would be more than fair proposing this as the value. It looks to be about $16,500 for AKV and $15,000 for SSR.

https://www.dvcresalemarket.com/selling/what-is-my-dvc-contract-worth/

Also, if any of these have direct benefits attached, make sure (if she keeps the contracts) that she lets DVC know it is through a divorce decree. Generally the benefits should transfer to her when the deed name change process, though no guarantee there. This is inconsequential (no value to the court) so I wouldn't even mention it as reason for wanting to keep the contracts, or anything.

Though I'm not a lawyer but some of this is from my own personal experience, but the state was IL so things would be different state by state. As advised above explain to the lawyer it is nothing more than a deeded leasehold timeshare and show the broker opinion. There is no way the her lawyer shouldn't understand that (if not I'd consider a different lawyer to handle the case).

Thank you

 

[brookmey]

I am not a lawyer, but am currently in the midst of a divorce in Michigan. The good news is that state law treats things very equitably, and the courts are used to determining the valuations for things that aren't dollar-denominated and accounting for them properly. Timeshares are viewed as assets, even if they are essentially worthless. These are not, so they will either have to be valued somehow, or they will have to be sold and the proceeds divided.

There is room for arguing over the value if they are grandfathered points that can be used to book all future resorts. That's because they are "worth more" than points you buy resale today, which cannot be used the same way. But there is also an argument that the value is just the value on the secondary market, because that's what you'd get if you sell them. Either way, I would use one of the DVC market reports that gives prices for closed resales, and I would not rely on listing prices.

But, my real advice to your sister is this: Don't argue over it---or, for that matter, much of anything. Let the court/mediator figure it out, because they will do so fairly overall. At the end of the day, she'll have about half of the couple's total marital assets, and the only question is in what form those take. The more arguing there is, the more time her lawyer is going to bill, and that just takes money out of her hands.

Along the way, my advice would be to be willing to be flexible about the details. Whatever they are valued at, he's going to get half---whether in the form of one of the unsold contracts, half of the proceeds of sale, or an equivalent asset/cash for half of that valuation. It probably does not matter how that happens. If he gets one of the contracts, your sister will have extra assets with which to buy a replacement. If she doesn't end up with such an asset, that probably means she'd be in the hole if she kept both contracts anyway.

In fact, if he thinks he's getting over on your sister by taking a contract, let him reap what he sows. He'll then be stuck with something he'll have to sell to get any value out of, because he doesn't ever want to go. She can just buy an (almost) equivalent replacement. Yes, there is sentimental value, but only because she has decided there is. Replacement points are still DVC points, and they spend (almost) the same way. So if he insists on $30K each, agree but only on the condition that he takes one of them. If he isn't willing to do that, it means he agrees they aren't worth $30K.

One of my spiritual advisors has repeatedly given me very sage advice about this whole process: I don't have to show up to the fight, even if I am invited to do so.

Thank you, this is very helpful.

 

[Brian Noble]

And even if they end up liquidating both, she can later re-buy whatever she wants with her half of the money. Yes, there will be some lost cash due to broker fees, and she may no longer be perk-eligible, but this is a small price to pay for a whole bunch of serenity.

 

[matt and beth]

Michigan is a no fault divorce state. 50/50. Give him half and move on. Take something else that’s actually worth value and move on

 

[crvetter]

Michigan is a no fault divorce state. 50/50. Give him half and move on. Take something else that’s actually worth value and move on

Michigan (like most states) is equitable distribution not equal distribution of marital assets. The court and mediator get the final say on what equitable means. This can even override any agreement the couple may have prior to going in front of the court.

But your point still stands that if they can’t keep them moving on is healthy. But at the end of the day this is ultimately likely a small part of their disagreement on splitting marital assets, unless they agree on 50/50 liquidated split and the court agrees.

 

[peder]

In addition to looking at the for-sale contracts, you can see aggregated sales data via DVC Resale Market: https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-june-2024/

I would use this aggregated data to form a valuation, and I would use it as the absolute maximum that you'd accept. In a divorce/liquidation scenario, a buyer would likely need to be more aggressive with their pricing to ensure their contract is sold, whereas the average contract sale includes those that that sat on the market for weeks/months. In other words, you'll have less leverage in the sale, so you should expect slightly lower prices than average.

That website has fancy charts, too, btw:

 

[tjkraz]

Replacement points are still DVC points, and they spend (almost) the same way. So if he insists on $30K each, agree but only on the condition that he takes one of them. If he isn't willing to do that, it means he agrees they aren't worth $30K.

This. Or better yet, if he stands his ground on the $30k figure and manages to get the courts to buy into that, let him take both contracts. In return, get $60k worth of assets elsewhere and turn that into DVC points for less cost.

Even if she buys one contract direct for the perks, it could be paired with a resale for half the cost. I realize she may have emotional attachment to those original contracts, but in the end she has the option to choose different home resort(s), contract sizes, and probably pay less money.

 

[DonMacGregor]

I am not a lawyer, but am currently in the midst of a divorce in Michigan.

Very sorry to hear this. Hopefully, when the dust has settled and you're able to breathe again, you'll still be able to enjoy at least some of your prior travel/timeshare lifestyle (in whatever form it might take) and continue to be a valued contributor here on the forums.