Advice on passing DVC contract to child

[CarolynMink]

I have 2 adult children that I would like to pass on direct purchase contracts to now (not inheritance). Can I do this with out loosing direct purchase benefits? Best finical way to do this? (I thought I read about this years ago but can not find the treads.) Should I just add their names to the contracts? Note: I own 5 contracts - 3 direct and 2 resale that are "grandfathered" from current restrictions.

 

[disneynutz]

I would just add them as joint owners with rights of survivorship. I would make sure that they really want to take on the responsibility and you need to understand that what they do can affect your credit.

DW loves all things Disney and wanted to add our grown kids to our ownership. When pressed it was more important to DW than the kids who declined the offer.

Bill

 

[miTnosnhoJ]

I would check with your accountant. This could be considered a Gift for inheritance tax purposes. You can give $14,000 per year (last time I checked) with no paperwork. If you are married, both spouses can give $14,000 (total of 28,000) with no paperwork. If your children are married, you could give each spouse 14,000 with no paperwork. So potentially you could give up to $56,000 per year per child with no paperwork. For amounts over this, you can give $1,000,000 over your lifetime but you have to file the Gift Tax form with your 1040. Unless you go over a million, there is no tax involved.

This all changes frequently, and I am not a CPA, so consult your CPA.

As for changing the titles, you can add them as joint, or change it totally over to them. If you expect them to start paying the Maintenance Fees, then I would title it to them. You will need to go through ROFR but it is formality.

As long as you are passing to your children, the grandfathered benefits should remain.

 

[CarolynMink]

Thank you.
I was aware of the gift tax but was not thinking about it for this. Silly me. Curious about how they determine the value. What I paid vs current direct prices vs resale. My cost was under $10,000 but would be over $14,000 with current direct prices from Disney.

Son very much interested in DVC. We have had multiple discussion on how it works. Daughter will not be able to afford maintenance fees for some time. I have a 25 point contract that might go to her just so she will be a member when no longer living at our address. (She is 21)

 

[miTnosnhoJ]

Thank you.
I was aware of the gift tax but was not thinking about it for this. Silly me. Curious about how they determine the value. What I paid vs current direct prices vs resale. My cost was under $10,000 but would be over $14,000 with current direct prices from Disney.

Son very much interested in DVC. We have had multiple discussion on how it works. Daughter will not be able to afford maintenance fees for some time. I have a 25 point contract that might go to her just so she will be a member when no longer living at our address. (She is 21)

I would use current resale prices rather than Disney direct. But run it by your accountant. Good luck. Depending on the size of your estate, the accountant may say no harm no foul.

 

[supersnoop]

When you make a gift of property, the receiver inherits your cost basis, so that would likely be the value for gift-tax purposes.

 

[glencoe]

As each of my kids turn 18 I am adding them to my contract. I used First American (used them from previous resale dvc purchases). Now my oldest is listed as an owner along with my husband and I. Please note if you have a contract with a loan/lean you can't add them until it is paid off. Now my son (21 yrs now) has a blue dvc card and can have all the benefits my husband and I use as DVC direct owners. (he is also on our resale contract.)
The cost is much less using First american than using a lawyer for closing etc.

 

[supersnoop]

As each of my kids turn 18 I am adding them to my contract. I used First American (used them from previous resale dvc purchases). Now my oldest is listed as an owner along with my husband and I. Please note if you have a contract with a loan/lean you can't add them until it is paid off. Now my son (21 yrs now) has a blue dvc card and can have all the benefits my husband and I use as DVC direct owners. (he is also on our resale contract.)
The cost is much less using First american than using a lawyer for closing etc.

Keep in mind that if your children encounter financial problems or divorce in the future, your DVC will be counted against their assets and may be liquidated (forced sale) by court order.

 

[glencoe]

Keep in mind that if your children encounter financial problems or divorce in the future, your DVC will be counted against their assets and may be liquidated (forced sale) by court order.

Pre-nup?

 

[miTnosnhoJ]

Pre-nup?

Nothing says we love you and welcome to the family like a pre-nup!

 

[supersnoop]

Pre-nup?

Pre-marital assets in some states. But it depends on the state. Foreclosure and bankruptcy are more difficult to protect against.

 

[Dean]

I have 2 adult children that I would like to pass on direct purchase contracts to now (not inheritance). Can I do this with out loosing direct purchase benefits? Best finical way to do this? (I thought I read about this years ago but can not find the treads.) Should I just add their names to the contracts? Note: I own 5 contracts - 3 direct and 2 resale that are "grandfathered" from current restrictions.

I'd add them to one contact, the smallest one, then associates on the rest. It'll be separate from the rest but will avoid a lot of the other issues and they'll all get benefits. Then they can be transferred upon passing otherwise.

 

[CarolynMink]

Thanks for all the great advice. Glad I have a few small point contracts.

 

[ScubaCat]

kids who declined the offer.

I'll take the bullet for them; feel free to add me on. I'm always happy to help.

 

[iluvthsgam]

If you are doing a transfer (as opposed to adding them to contract with you on it) DVC refers to that as a gratuitous transfer and they have them all the time and have the paperwork to do it. You can do it yourself. You don't need an attorney or title company. I did it myself just by looking at other deeds online and copying the language. You need to get the ROFR from Disney first then file the paperwork with the clerk of Orange County and just pay the filing fees.

If you do a gratuitous transfer it should retain the privileges the membership has - at least it did for me back when I did it a few years back.

If the paperwork does scare you then just hire a title company in FL to do it for you and probably charge you $400-$500 (haven't looked in a few years but that is what it was back when I was looking to do it).

 

[WDBRDWLK]

We have also planned on splitting our 6 contracts between our 2 adult kids when the time comes. It will not be anytime soon because we are having too much fun with our DVC..