Question about putting DCV ownership into a revocable trust..?

[sgtdisney]

My father is thinking about setting up a revocable trust for his house and was also wondering how that would work for his DVC membership? Anyone here had any experience with that. I am pretty sure he'd need to work with an attorney who specializes in some estate planning. He had questions as to how the ownership would with with his membership benefits. Currently his membership card has his name and they do check name on card against id. He was curious how this would work if the membership was transferred from him to a revocable trust with his children as the . Would his name still be on it? Would he still get a member card, or would the membership card list the trust. He was curious too if the beneficiaries of the trust get membership cards or not until the trust passes to them? I just thought I'd ask here before he went to an attorney as I am sure others here have had experience in this.

 

[drusba]

Yes, it is best to have legal advice when setting up a trust in your father's situation. As to your general question, member cards will be issued in the name of those designated in the trust as the current beneficial owners of the trust property, meaning your father in the trust you describe.

 

[sgtdisney]

Yes, it is best to have legal advice when setting up a trust in your father's situation. As to your general question, member cards will be issued in the name of those designated in the trust as the current beneficial owners of the trust property, meaning your father in the trust you describe.

Ok thanks for the info!

 

[Goofy Adpi]

Does anyone have a recommendation for a Florida lawyer for the preparation of a Deed transferring a contract into a trust established in another state?

 

[JimMIA]

He was curious how this would work if the membership was transferred from him to a revocable trust with his children as the . Would his name still be on it? Would he still get a member card, or would the membership card list the trust. He was curious too if the beneficiaries of the trust get membership cards or not until the trust passes to them? I just thought I'd ask here before he went to an attorney as I am sure others here have had experience in this.

Our DVC and other timeshare holdings have always been held in a trust. Initially it was a revocable trust, converting to a family trust when my father passed away.

The first caution I would give is that a trust is beneficial only to the degree that you title assets into that trust. Putting a house and a timeshare only into the trust might not be the best way to accomplish what your Dad wants. He really needs to take a look at his entire potential estate and see how that fits in.

As far as the DVC piece is concerned, you left out a critical word above where you said, "...with his children as the __________." As the WHAT???

It makes a big difference, and there are a couple of options:

• We initially had my Dad and myself as co-trustees and my two adult daughters as "successor trustees." Before we bought DVC, my Dad's health deteriorated to the point where it was time to transition so the successor trustees replaced him and became co-trustees (with his knowledge and approval). When we bought DVC, the correct way of titling the assets was "A, B, and C, as trustees for the ___ Family Trust." So we, the trustees, are the owners of all trust assets and are acting on behalf of the trust and following the specifications of the trust.
  • To answer your specific question, if you list all the children as co-trustees, all will be owners and all will get a member card.
  • However...co-trustees have equal rights and ownership, including the ability to change the terms and details of the trust -- so those implications are much more important than who gets a 10% discount on 50% overpriced food! Your Dad should take a long, hard look at that aspect before choosing this alternative.
• If the children are beneficiaries of the trust, they do NOT have any ownership interest in the trust and therefore no ownership of DVC. They would NOT get member cards.

 

[JimMIA]

Does anyone have a recommendation for a Florida lawyer for the preparation of a Deed transferring a contract into a trust established in another state?

You don't need a lawyer for that. Just be sure the deed, and all of the other documentation of the transaction, have the ownership shown precisely correctly.

I would ask the local attorney who drew up the trust for that specific wording if you are not absolutely sure.

 

[JimMIA]

And BTW, I believe DVC Administration will require a letter from the attorney who drew up the trust verifying that the trust is still active -- and they will also require the first page and signature page of the trust as further documentation.

 

[sgtdisney]

Our DVC and other timeshare holdings have always been held in a trust. Initially it was a revocable trust, converting to a family trust when my father passed away.

The first caution I would give is that a trust is beneficial only to the degree that you title assets into that trust. Putting a house and a timeshare only into the trust might not be the best way to accomplish what your Dad wants. He really needs to take a look at his entire potential estate and see how that fits in.

As far as the DVC piece is concerned, you left out a critical word above where you said, "...with his children as the __________." As the WHAT???

It makes a big difference, and there are a couple of options:

• We initially had my Dad and myself as co-trustees and my two adult daughters as "successor trustees." Before we bought DVC, my Dad's health deteriorated to the point where it was time to transition so the successor trustees replaced him and became co-trustees (with his knowledge and approval). When we bought DVC, the correct way of titling the assets was "A, B, and C, as trustees for the ___ Family Trust." So we, the trustees, are the owners of all trust assets and are acting on behalf of the trust and following the specifications of the trust.
  • To answer your specific question, if you list all the children as co-trustees, all will be owners and all will get a member card.
  • However...co-trustees have equal rights and ownership, including the ability to change the terms and details of the trust -- so those implications are much more important than who gets a 10% discount on 50% overpriced food! Your Dad should take a long, hard look at that aspect before choosing this alternative.
• If the children are beneficiaries of the trust, they do NOT have any ownership interest in the trust and therefore no ownership of DVC. They would NOT get member cards.

Thanks for the detailed info. I probably left out the word 'beneficiaries' in my sentence. Your explaining co-trustees vs beneficiaries, is very helpful. I agree, my father does have other assets, investment accounts, that should probably be included in his estate planning and I have advised him to find a good attorney to discuss his options.

To be honest, as well, you have kind of touched on the main question, I have, so I have a followup question. My father's DVC investment is currently, completely, in my father's name as sole owner. One of my siblings is curious as to how to get a membership card. I have told my father, no one should have an ownership in his membership, until he can no longer own it, only for the purposes of getting someone a membership card. I told him if any of my siblings (or even myself) are listed as owners on the deed, god forbid if they got divorced or had severe financial difficulties, my father could lose his asset, or part of it. So here is my question, if my father lists his children as beneficiaries, we would not have access to the account until it passed onto us and it's fully protected from any issues any of the beneficiaries would have in the future. If we are listed as co-trustees, would that put his assets (in this case the DVC ownership) at risk of one of the co-trustees has financial or marital problems? Or are the assets in the trust, still protected from co-trustee's future financial issues? I am assuming the answer they are at risk if any co-trustee has a problem, they could after the assets in the trust? I have told my dad that a 10% discount for his kids or a visit to a member lounge is absolutely not worth the risk of him losing his ownership and he does understand this and agrees, so I was just curious with other's experiences.

 

[Goofy Adpi]

You don't need a lawyer for that. Just be sure the deed, and all of the other documentation of the transaction, have the ownership shown precisely correctly. I would ask the local attorney who drew up the trust for that specific wording if you are not absolutely sure.

And BTW, I believe DVC Administration will require a letter from the attorney who drew up the trust verifying that the trust is still active -- and they will also require the first page and signature page of the trust as further documentation.

Thank you for the response. While you are correct that you do not "need" a Florida lawyer, as an estate planning lawyer in another state I would not recommend trying to do a Deed on your own. That's why I was looking for a recommendation. I have a service I can use, but I like to use referrals for local attorneys whenever possible.

 

[JimMIA]

Thanks for the detailed info. I probably left out the word 'beneficiaries' in my sentence. Your explaining co-trustees vs beneficiaries, is very helpful. I agree, my father does have other assets, investment accounts, that should probably be included in his estate planning and I have advised him to find a good attorney to discuss his options.

To me, that is really one of the two key questions about any trust:

1. Is the trust a part of an overall financial, estate, succession plan -- and does it make sense in the context of that plan. If not...what's the point?
2. And...are assets transferred into the trust to fund it and provide the benefits you seek? That's not always an easy task, but it's critical. When we established my Dad's trust, we transferred about 40 assets into the trust which were titled in 21 different ways -- "Office Depot trusts," jointly held assets in a variety of name configurations for the same people, individually held assets. It was a mess that took 5-6 months to straighten out. But once we did it was well worth the effort because it gave my Dad what he wanted and had tried to achieve in 21 different ways!

To be honest, as well, you have kind of touched on the main question, I have, so I have a followup question. My father's DVC investment is currently, completely, in my father's name as sole owner. One of my siblings is curious as to how to get a membership card.

They can't unless they live with your father. The only people who get membership cards are owners and immediate family members living in the same household.

I have told my father, no one should have an ownership in his membership, until he can no longer own it, only for the purposes of getting someone a membership card. I told him if any of my siblings (or even myself) are listed as owners on the deed, god forbid if they got divorced or had severe financial difficulties, my father could lose his asset, or part of it.

Yes, that's a possibility. Another negative possibility is the mess he would have if he wanted to sell the DVC and the sibling didn't agree. He would not be able to sell.

So here is my question, if my father lists his children as beneficiaries, we would not have access to the account until it passed onto us and it's fully protected from any issues any of the beneficiaries would have in the future. If we are listed as co-trustees, would that put his assets (in this case the DVC ownership) at risk of one of the co-trustees has financial or marital problems? Or are the assets in the trust, still protected from co-trustee's future financial issues? I am assuming the answer they are at risk if any co-trustee has a problem, they could after the assets in the trust?

I am not a lawyer, but my understanding is that the trust would not normally have exposure if one of the trustees had financial or liability issues. The trust is a "legal person" and the trust owns the assets -- NOT the trustees. It's a similar situation to a corporation owning assets, rather than the directors of the corporation. The trustees merely manage the trust, but they cannot individually sell assets or do anything independently unless the trust documents give them that authority. So I do NOT think the trust assets could be attached because of one trustee's personal debts.

Of course, there are always exceptions. I know if someone could show that the trust was just a device for someone to avoid liability in a particular case, they could attack the trust and try to bring it into the mix. But generally, I don't believe trust assets would be exposed to individual trustees liabilities.

But that is certainly a question your Dad should ask the lawyer!

 

[sgtdisney]

But that is certainly a question your Dad should ask the lawyer!

Thanks again JimMIA, this has been helpful and will be a good list of questions and concerns he can address with the attorney when he sees one.

 

[JimMIA]

I want to straighten out something I said above, because I actually said opposite things!

In a trust, the trust -- not the trustees personally - owns the assets. All assets are titled in the name of the trust, and any assets titled differently are not governed by the trust. A trustee(s) is a human or humans who represent and manage the trust, but they don't personally own anything in the trust.

For the purposes of DVC, however, DVC considers trustees as DVC owners entitled to all the benefits of ownership. So in my case, my family, and my two adult daughters and their families, ALL were entitled to DVC Member cards and all the benefits thereof. It's the same with Wyndham -- my daughters and their families all enjoy all the benefits of ownership as trustees.

 

[maburke]

They can't unless they live with your father. The only people who get membership cards are owners and immediate family members living in the same household.

Is that true? I did not think that anyone not specifically on the deed got a membership card. The AP discount can be used by the member for APs for others living in the same household, but no member card. Associates don't get member cards, either.

 

[JimMIA]

Is that true? I did not think that anyone not specifically on the deed got a membership card. The AP discount can be used by the member for APs for others living in the same household, but no member card. Associates don't get member cards, either.

I think you're right. I think I was thinking about the AP discount. My bad!

 

[tdl3903]

What risks do I have today if I was to buy a DVC contract from an estate sale? The maintenance fees are in arrears for 2 years (2015 & 2016) and the remaining balance on the original loan would need to be paid off. Would this still be processed through an ROFR process?

 

[JimMIA]

What risks do I have today if I was to buy a DVC contract from an estate sale? The maintenance fees are in arrears for 2 years (2015 & 2016) and the remaining balance on the original loan would need to be paid off. Would this still be processed through an ROFR process?

Your risk -- to me -- are that you might end up paying WAY too much for a resale DVC contract.

You need to find out what the loan payoff is (may be more than the balance) and how much is owed in annual dues.

Then deduct all that from your per-point offer. Or...require that the seller's estate pay off the loan and bring the MFs current. They can't have it both ways.

 

[tdl3903]

Your risk -- to me -- are that you might end up paying WAY too much for a resale DVC contract.

You need to find out what the loan payoff is (may be more than the balance) and how much is owed in annual dues.

Then deduct all that from your per-point offer. Or...require that the seller's estate pay off the loan and bring the MFs current. They can't have it both ways.

I would be in at under $50/point including the loan payoff and past-due maintenance fees.