Is it an option to transfer instead of sell?

[Wigit12]

My mother-in-law has expressed the need to possibly sell some of her points because she just can't afford the monthly fees anymore. Is it possible to tranfer into our names (children) so that we are owners and financially responsible for the dues? Or would this require a "sale" to us?
She's really distressed about selling since they bought with the intention of leaving them for their children anyway. Just not sure how this would work.

 

[AFMom]

I don't know the legality issues - but I know that to immediate family members this is a posibility. I would call the MS line - I think they have a legal department that MS can connect you to there. I believe with immediate family members there are no fees involved and no dealing with ROFR, etc. But your mother still cannot split up a contract - if she owns all of her points in one large contract - the entire contract would have to be given/gifted to you. Good luck!

 

[dianeschlicht]

Since she plans to leave it to you "kids" anyway, why not help her out with paying dues for her now and avoid the legal hassle.

 

[manning]

For tax purposes it may be better to leave it in her name and help pay the dues.

If you had to sell taxes you owe will be based on the original cost of the points, if transfered to you. IE selling price minus original (their) purchasing price (cost basis) .

If left in their name, upon their death you will inherit the points and the cost basis will be adjusted to the cost at time of death.

Example 50.00 per point when they bought (cost basis). Also yours if
transfered to you.
95.00 selling price when sold.
95 - 50 = $45.00 taxable amount.

95.00 inherited value per point (the cost basis is adjusted).
100.00 selling price
100 - 95 = $10.00 taxable


Consult your tax adviser. I have been known to be wrong at times.

 

[Caskbill]

She can sell to you and you can arrange with Disney to have them waive their ROFR which they will do when selling between family.

You will still have to pay all the legal closing costs of transferring the title.

You said she wants to sell 'some' of her points. Remember, she cannot split up a contract. For example, if she owns a 200 point contract, she can't sell you 100 points and keep 100 points. It's all or nothing.

However, if she owns several contracts, such as a 200 point contract plus a 75 point add-on contract, she can sell either the 200 point one, or the 75 point one, and keep the other one for herself.

 

[eva]

We are actually doing something similar. My sister and her husband can no longer afford the 200 points that they have. When we called DVC to find about asuming their loan and dues they stated that we couldn't do that. So they are just adding our names to the points for reservations and we are going to make the payments on the loan and their dues. It seems that it will avoid a lot of legal hassles to do it that way.

 

[Dean]

We are actually doing something similar. My sister and her husband can no longer afford the 200 points that they have. When we called DVC to find about asuming their loan and dues they stated that we couldn't do that. So they are just adding our names to the points for reservations and we are going to make the payments on the loan and their dues. It seems that it will avoid a lot of legal hassles to do it that way.

But it does mean the points stay in their names and if anything happens with their credit, the contract will be at risk. Still not a bad deal if you only pay the dues ONLY and get to use the points. If you add in the loan payments i very much depends on the specifics. Assuming 10-20% down and ownership of only a few years, this may be ALL the contract is worth on the open market anyway.

Just try not to get in a situation where the contract is yanked out from under you or worse, you have an obligation to pay the loan AND lose the points. If you could pay off the loan and have the contract changed over to your name, that would be your safest option. And definitely don't have your name added to the loan unless theirs is removed.

Good luck.

 

[DrTomorrow]

We are actually doing something similar. My sister and her husband can no longer afford the 200 points that they have. When we called DVC to find about asuming their loan and dues they stated that we couldn't do that. So they are just adding our names to the points for reservations and we are going to make the payments on the loan and their dues. It seems that it will avoid a lot of legal hassles to do it that way.

Of course, you know your family, but this would make me feel really skeevy. While you are making the loan payments and paying the dues, your S and BIL retain ownership. What happens when it's all paid off? Since they own it, they could have your names removed, rent the points or even sell it. Given the problems that some people have just inviting family along, I'm not sure I'd make payments on someone else's asset....

IMHO - YMMV

 

[Wigit12]

All these different scenarios is what scares us. MIL owns 230/50/50. We don't want her to sell the 50's because if and when something does happen to her, the 230 cannot be split among the children. We've (us and SIL) already decided that "sharing" the contract wouldn't work. None of us wants the money or the use of the points to create family conflict. And we do not want our credit tied to SIL in any way.

I think over the weekend we've decided to try to convince her to sell the 230 contract. Hate to see them go, but it's just the safest thing right now.