Not to be morbid, but...

[mlill]

...what is the best way to set it up so our kids won't have any problems inheriting our DVC membership if something should happen to DH & I? Right now we have a master contract and 3 add-on contracts. They are all in our joint names. Any advice? We are thinking of adding our eldest daughter, who is 19, onto our contracts as an associate member for now...

Thanks in advance!

 

[RobDoc]

You might want to check with your legal advisor, but this can be easily accomplished in your will - your attorrney will know the best way to set it up in your situation.

Adding someone as an associate only gives them the ability to make reservations - there is no transfer of ownership unless you add them to the deed (and that's probably not the best way to handle this in case somone on your deed should need to declare bankruptcy or divorce where the DVC deed would be considered one their assets).

 

[fkj2]

Doc, I know contracts currently can only be sold in their entirety. But, can a contract's points be divided upon the death of the owner according to the owner's wishes?

 

[Grandbuddy]

Doc, I know contracts currently can only be sold in their entirety. But, can a contract's points be divided upon the death of the owner according to the owner's wishes?

It is my understanding that a contract cannot be divided. This is why, for estate purposes, we purchased two nearly equal contracts, as we have two sons. (I plan to equalize the contracts later - if I have the opportunity - by purchasing two nearly equal add-ons, the larger of which will go with the 160-point contract.)

 

[jamstew]

It is my understanding that a contract cannot be divided. This is why, for estate purposes, we purchased two nearly equal contracts, as we have two sons.

I did the same thing, for the same reason.

 

[mikkiwikki]

Im confused - DVC is not really deeded.

How can it be passed onto your children?

 

[fkj2]

Im confused - DVC is not really deeded.

How can it be passed onto your children?

Sure DVC deeds are recorded. They have an ending date, but the ownership interest is recorded. Those all have to be researched when a resale occurs.

 

[jerseygal]

We purchased 1 master 100 pt and 1 add on 100 pt....

We did it for estate purposes as well!!! Each WONDERFUL DS will get 100!

Also, for re-sale purposes, we decided if we had to or wanted to sell, selling 100 points would probably be easier!

Good Luck!!!!!!!!!!!!!!

 

[RobDoc]

Doc, I know contracts currently can only be sold in their entirety. But, can a contract's points be divided upon the death of the owner according to the owner's wishes?

No, the contract cannot be divided. You can place the DVC membership in a trust vehicle so that the children would share the points as you dictate. The trust could be the "owner" and the children would be the trustees.

Many have just purchased equal sized contracts with the intent of leaivng one to each child when the time is appropriate.

 

[Duckieluckey]

We have two contracts held as JTWROS. We plan to add our daughter to one contract and our son to the other. That way the deed will pass directly to them.

 

[CarolMN]

Technically, DVC owners have a deeded interest in a lease. The lease ends at varying times, depending on the resort. Owners may pass their remaining interest to their heirs.

 

[mlill]

Thanks for everyone's input. So, technically, I can leave the master contract to one kid, and the add-ons to the others? I wasn't sure how that would work. It's easy if you have separate master contracts, then each kid would get their own. I'll look into setting up a trust - didn't think about that...

OK, I have one more question for you - if I want to add our eldest daughter onto our deeds, will I have to pay closing again on each one separately, or do I only have to update the master contract? Does anyone know what the average cost is to add a name to a DVC deed?

 

[Grandbuddy]

But there would be some legal expense.

However, this might also accomplish some things you do not intend:

When your daughter marries (or not), if she should ever encounter financial difficulties, her creditors could place a lien on the deed, as it will count as her asset. A bankruptcy on the part of anyone named on the deed will be a financial disaster.

Your DVC deed/membership will no longer be a part of your estate, should you and your wife pass away. It will belong to the one daughter, to do with as she will. She may be a lovely person who will never overextend herself financially and who will always share lovingly with her sibling(s), but you might be setting her up for an uncomfortable situation.

 

[nikkistevej]

OK, I have 1 DD, would she automatically inherit our ownership if my DH and I passed? She is only 6 now.

 

[Grandbuddy]

Whoever you have designated as financial guardian for your daughter will control your estate, including the DVC membership, on your daughter's behalf, as long as she is a minor. It would be a good idea to educate that person on the intricacies and benefits of the membership, and then hope there is no need for that person to ever use that knowlege.

 

[TXdeVille]

So how does one handle having two contracts that can be deeded to two children but they have significantly different expiration dates??

 

[RobDoc]

OK, I have one more question for you - if I want to add our eldest daughter onto our deeds, will I have to pay closing again on each one separately, or do I only have to update the master contract? Does anyone know what the average cost is to add a name to a DVC deed?

Yes, each deeded interest would need to be changed and recorded with the county since each is a separate legal entity. Each would need to pass ROFR which should not be a problem.

I believe the changes can be made for nominal costs if you handle the details yourself and they can be done without a closing service or attorney if you know what to do. Dean has posted the process a number of times. Perhaps he will comment again here.

 

[Grandbuddy]

So how does one handle having two contracts that can be deeded to two children but they have significantly different expiration dates??

Can't imagine that there is any "correct" answer to that query. If I were in that situation, I guess I would leave both contracts to both kids, and if they fail to share nicely...well, I'm dead and don't have to deal with it.

 

[TXdeVille]

Can't imagine that there is any "correct" answer to that query. If I were in that situation, I guess I would leave both contracts to both kids, and if they fail to share nicely...well, I'm dead and don't have to deal with it.

That is too funny! I can't imagine there is a good answer to that query either but it was worth a shot.

 

[JimMIA]

The proper place to get accurate advice on this subject is from an attorney who specializes in estates and trusts.

Generally, there are two ways to ensure a pretty simple transfer to your heirs.

One way is to enter into joint ownership with your heirs. Properly titled, in the event of the death of one of the owners, the other owners still have uninterrupted ownership -- without probate. (You can also pass ownership through your will, but wills have to be probated which is a lengthy and costly process.)

DVC Member Administration can help you with converting to joint ownership. However, as others have mentioned above, joint ownership has some drawbacks as well...especially if one of the owners gets involved in financial difficulties, divorce, etc. Joint ownership is just like a partnership in the sense that one partner's problems can become everyone's problems.

The other method is the use of a trust. A trust would also avoid probate and could insulate you from liabilities caused by one owner's problems. Usually, trusts are used as a part of a much larger estate management strategy, rather than only for one small asset like a DVC ownership. You'd really need to discuss your overall financial situation with an attorney specializing in these matters to get good adivce, because trusts are very technical. (Our DVC account is held in a family trust, and it fits very well into the larger picture, but a trust would not be the best alternative for every family.)