Question of giving points to our children.

[dmurphy42]

My DW and I would like to deed our points to our four adult children and their spouses in four equal amounts. Our goal is for the children and spouses to become DVC Members with all benefits and responsibilities.

1. Can this be done?
2. If so, is it as straightforward as contacting Member Administration and having the process started?
3. Also, if it can be done, are there any pitfalls or problems that I can work out before I contact Member Administration?
4. Thanks for any input.

 

[dianeschlicht]

I'm not completely sure, but I think it WILL be rubber stamped, but you do still have to go through a closing process and ROFR. In the case of a family sale, it is more a formality, but contact MA and see what they say. We put our kids on the deeds when we first purchased. Now it looks like neither will want the responsibility of maintenance fees when we are gone, so we may just sell in 10 or so years anyway.

 

[chalee94]

My DW and I would like to deed our points to our four adult children and their spouses in four equal amounts. Our goal is for the children and spouses to become DVC Members with all benefits and responsibilities.

1. Can this be done?
2. If so, is it as straightforward as contacting Member Administration and having the process started?
3. Also, if it can be done, are there any pitfalls or problems that I can work out before I contact Member Administration?
4. Thanks for any input.

do you have 4 separate contracts? if yes, it can be done. if not, i don't think this will work...

 

[dianeschlicht]

Oh yeah, I was assuming you already had 4 different contracts.

 

[Chuck S]

As other have said, existing contracts can not be divided. You can leave all the points to all your children and let them work out the details of use, or you will have to have four separate contracts if you want to leave DVC to them individually.

 

[dmurphy42]

Thanks to all who responded. Looks like I will be buying several more smaller contracts and selling our original contract.

 

[JimMIA]

An option, depending on your family situation and global financial situation, would be to establish a trust.

Probably the best way would be to create a revocable trust with you as the grantor and trustee, and your four children as successor trustees. Then, transfer the DVC ownership from your individual ownership to trust ownership.

What that means, in plain English, is that you would remain in complete control of the DVC account as long as you live, and would also have the complete ability to change any detail about the trust (assets contained in the trust, trustees, successor trustees, etc, etc.). In its most basic terms, you would be assuring the orderly transfer of whatever assets you title in the trust to your kids, while retaining the ability to change your mind about anything at any point.

Doing the above would depend on the laws in your state, and you would need to consult with a local lawyer who specializes in trusts and estates to see if this suggestion actually fits your situation in real life, and also fits in with your overall estate planning.

 

[dmurphy42]

Thank you JimMIA for your thoughtful and informative reply. I will follow-up on your suggestion and see if that can work. It would certainly be easier and less expensive than buying three more contracts and selling one. Thanks again.

 

[JimMIA]

Just understand that trust laws vary a good bit from state to state. Also, there are costs associated with establishing the kind of trust I'm talking about. If it fits into your overall estate planning, it can be a big help, but just because it worked well for our family doesn't mean that it will necessarily be good for your family.

Also, with trusts, it is important to understand that simply drafting a trust means nothing. Assets must be titled in the name of the trust in order to be governed by the authority of the trust, and until you do that, you really just have an expensive piece of paper.

 

[JimC]

My 2 cents is that this seems like a lot of effort and expense for RTU contracts with limited duration and value. Since transaction costs are so low, you may want to consider selling your points, gifting the net proceeds (with additional funding if you desire) to the children. You could certainly indicate that you hope they buy into DVC and enjoy it as much as you have. That has to cost less than setting up a trust and administering it for many years.

However, it has been my experience that children sometimes do not value such items in the same way as the parents. They may be reluctant to express that view openly, but would prefer not to be saddled with the parents' timeshare obligations.

As JimMIA suggested what works for one family might or might not work for others. So getting competent advice is strongly advised as is some very candid conversation within the family.

 

[dmurphy42]

All excellent points, thanks to you both.