DVC value during divorce

[Sandisw]

I’m not sure why you are having such a condescending attitude.

Most financial assets that are not physical assets can be split and so this the fact that DVC can not makes them an outlier (even if it is standard for timeshares) and adds an additional level of risk for purchase for direct points of a restricted resort.

How does having a restricted resort change things, since no contract can be split after purchase?

 

[crvetter]

How does having a restricted resort change things, since no contract can be split after purchase?

I guess they are saying the delta between a restricted resort at direct and resale pricing is higher. So if the sale is forced on the contracts you would lose more money.

In a situation like this, I personally would always be hopeful that people act mature and in their best interest. If one party wants to keep the contracts it is always the best interest of everyone to charge them market rate, because you'll be ahead the closing costs (which the other party can't charge as a cost).

There is something to suggest for sanity to just force a sale of the contracts from both sides. However, I don't think there is ever harm in simply pushing back 1-2 times on the true cost and see if you can rationalize the value and reason with the other party. Don't need to do it non-stop but you can always hope for the best interest realization by everyone. I mean I went through it and the decision we made was very much why sell when 1 person wanted to keep it.

 

[AstroBlasters]

How does having a restricted resort change things, since no contract can be split after purchase?

The point is that two posters are being very snarky in their responses and IMO it is not justified.

Nearly every other financial asset can be split up and so it’s not obvious that a timeshare should inherently be any different, although I accept that it is not currently allowed.

If a forced sale occurs because of a situation like the OP, the the seller of a previously purchased direct resort that are restricted at resale would be more harmed than others because the devaluation of the points are worse since the use of the points goes from 15 resorts to 1 resort. (See the recent RIV sale at $107pp and VDH for $130pp).

An original purchased resale contract still has ridiculous 9.25% commissions to deal with, but at least the depreciation hit has already occurred.

 

[Sandisw]

The point is that two posters are being very snarky in their responses and IMO it is not justified.

Nearly every other financial asset can be split up and so it’s not obvious that a timeshare should inherently be any different, although I accept that it is not currently allowed.

If a forced sale occurs because of a situation like the OP, the the seller of a previously purchased direct resort that are restricted at resale would be more harmed than others because the devaluation of the points are worse since the use of the points goes from 15 resorts to 1 resort. (See the recent RIV sale at $107pp and VDH for $130pp).

An original purchased resale contract still has ridiculous 9.25% commissions to deal with, but at least the depreciation hit has already occurred.

So just that the value could be potentially less if one has to sell…then something else got it. .

 

[AstroBlasters]

So just that the value could be potentially less if one has to sell…then something else got it. .

Correct. Versus if someone has $30k in tbills or $30k is Disney stock…. Those could just be divided up between the two parties.

Additionally, if the separating parties did choose to liquidate and split the proceeds then most firms do not charge any fees/commissions to do so.

Also, there is no tangible difference to a buyer if purchased the securities are purchased on the secondary market and so their is no “depreciation hit”.

At least DVC has a secondary market…. I shudder to think about what another timeshare program would look like during divorce mediation…..

 

[Bearval]

Correct. Versus if someone has $30k in tbills or $30k is Disney stock…. Those could just be divided up between the two parties.

Additionally, if the separating parties did choose to liquidate and split the proceeds then most firms do not charge any fees/commissions to do so.

Also, there is no tangible difference to a buyer if purchased the securities are purchased on the secondary market and so their is no “depreciation hit”.

At least DVC has a secondary market…. I shudder to think about what another timeshare program would look like during divorce mediation…..

In a divorce with “other “ timeshares I am sure that the people would be fighting on who has to get stuck with them since many are nearly worthless and you still have to pay maintenance fees.

 

[bumbershoot]

I shudder to think about what another timeshare program would look like during divorce mediation…..

"You take it"
"No you take it"

 

[AstroBlasters]

"You take it"
"No you take it"

That would definitely be one common scenario.

But, I know a lot of people who have time shares with Marriott and seem to really like it…. however without a strong resale market I’m not sure how you that would be evaluated for a divorce.

I’m guessing the OP’s soon to be ex just called a Disney guide and asked what it would cost to buy the contracts direct from Disney right now.

 

[Bearval]

That would definitely be one common scenario.

But, I know a lot of people who have time shares with Marriott and seem to really like it…. however without a strong resale market I’m not sure how you that would be evaluated for a divorce.

I’m guessing the OP’s soon to be ex just called a Disney guide and asked what it would cost to buy the contracts direct from Disney right now.

That appears to exactly what they did, but it will be what the resale value is just like any other asset. If she wanted a 10 year old car they bought together it wouldn't be what a new one would cost but what the value of the used one they have is.

 

[AstroBlasters]

That appears to exactly what they did, but it will be what the resale value is just like any other asset. If she wanted a 10 year old car they bought together it wouldn't be what a new one would cost but what the value of the used one they have is.

It’s actually an interesting question.

Would it be resale value if the points are unrestricted direct points or grandfathered resale points….

I understand the “used car” analogy and generally agree with it…. but if they are unrestricted points and/or come with discounts in annual passes then I can see a case for why just resale value might not actually cut it….

 

[crvetter]

It’s actually an interesting question.

Would it be resale value if the points are unrestricted direct points or grandfathered resale points….

I understand the “used car” analogy and generally agree with it…. but if they are unrestricted points and/or come with discounts in annual passes then I can see a case for why just resale value might not actually cut it….

I think the court generally will just simply look at it as what can they be sold for. Since the status of the points all convert the same on sale it doesn’t matter much.

Now the OP’s sister could offer a tiny bit more to try and not have them sold. However, that would unlikely not be what the court would do (probably force sale and in reality the ex would get the same as if he agreed to the true price just less the commissions). The ex is being greedy and spiteful given the tale the OP stated above. A reasonable person would accept the cash value of what the sale price would be, if they didn’t want the contracts at all. Since they would be ahead by the commissions.

 

[AstroBlasters]

I think the court generally will just simply look at it as what can they be sold for. Since the status of the points all convert the same on sale it doesn’t matter much.

Now the OP’s sister could offer a tiny bit more to try and not have them sold. However, that would unlikely not be what the court would do (probably force sale and in reality the ex would get the same as if he agreed to the true price just less the commissions). The ex is being greedy and spiteful given the tale the OP stated above. A reasonable person would accept the cash value of what the sale price would be, if they didn’t want the contracts at all. Since they would be ahead by the commissions.

I understand what you are saying, but if we owned 500 direct Aulani points, then I wouldn’t want to accept the resale value alone in a split….

I completely get the “we bought the car new and now it may be 2 years old and heavily depreciated”…. but once again the points if direct or grandfathered are truly not the same as what could be purchased on the resale market…. kind of like if someone owned a Tesla that has free supercharging for life but that benefit wouldn’t transfer if they sold the car…..

Man am I glad I went into Economics and Finance instead of law….

 

[atthebeachclub]

I understand what you are saying, but if we owned 500 direct Aulani points, then I wouldn’t want to accept the resale value alone in a split….

I completely get the “we bought the car new and now it may be 2 years old and heavily depreciated…. but once again the points if direct or grandfathered are truly not the same as what could be purchased on the resale market…. kind of like if someone owned a Tesla that has free supercharging for life but that benefit wouldn’t transfer if they sold the car…..

Man am I glad I went into Economics and Finance instead of law….

I am not in law either, but have gone through probate before on an estate. It would be in line with how the law treats the financial value of splitting an estate if they look only at resale value of the contracts in divorce.

Let’s say they split an estate and pass equal values of a house on to one party and cash to another. The person getting the house (or a portion of the house) would have real costs of up to 10% or so if they have to sell the house, such as realtor’s fees. But this is entirely unaccounted for in the splitting of an estate. Only the value of the unsold house is accounted for. It isn’t fair, but that is how it is done.

 

[Sandisw]

I am not in law either, but have gone through probate before on an estate. It would be in line with how the law treats the financial value of splitting an estate if they look only at resale value of the contracts in divorce.

Let’s say they split an estate and pass equal values of a house on to one party and cash to another. The person getting the house (or a portion of the house) would have real costs of up to 10% or so if they have to sell the house, such as realtor’s fees. But this is entirely unaccounted for in the splitting of an estate. Only the value of the unsold house is accounted for. It isn’t fair, but that is how it is done.

Yes, and with any divorce, things like a DVC timeshare is just another one of those joint things one owns and now have to figure out how to deal with. No way to get around that.

 

[gmi3804]

I doubt the courts would care about the differences between grandfathered benefits and restricted benefits.

 

[Bearval]

It’s actually an interesting question.

Would it be resale value if the points are unrestricted direct points or grandfathered resale points….

I understand the “used car” analogy and generally agree with it…. but if they are unrestricted points and/or come with discounts in annual passes then I can see a case for why just resale value might not actually cut it….

It would be based on the current market value of the asset if sold, not the replacement value. If both parties cannot agree on the value of any asset, those assets would have to be sold and the proceeds divided.

 

[Brian Noble]

In a divorce with “other “ timeshares I am sure that the people would be fighting on who has to get stuck with them since many are nearly worthless and you still have to pay maintenance fees.

Turns out, that's not necessarily true, because you get vacation lodging with those maintenance fees---and that is nearly always at a discount over renting the exact same stay. "I would have to give it away" is not the same as "it has no value."

 

[AstroBlasters]

Yes, and with any divorce, things like a DVC timeshare is just another one of those joint things one owns and now have to figure out how to deal with. No way to get around that.

Another reason to avoid buying large contracts….

 

[Bearval]

Turns out, that's not necessarily true, because you get vacation lodging with those maintenance fees---and that is nearly always at a discount over renting the exact same stay. "I would have to give it away" is not the same as "it has no value."

Not all timeshares are created equal, there are some that are a decent value and then there are others that you cannot even give away to charities to try and get out from under the maintenance fees.

 

[Bearval]

I doubt the courts would care about the differences between grandfathered benefits and restricted benefits.

The courts would not, they are just interested in the liquidated value of the assets same as if you went into bankruptcy.