Unusual Ownership/Transfer Question

[wombat94]

Hi all.

I have an unusual ownership/transfer question and I was wondering if any of you had any ideas. I am planning to call my guide tomorrow to try to get some answers, but figured I'd ask here as well.

My wife and I are owners in common on our DVC membership (150 HHI points).

My parents own 320 points at OKW. For a variety of reasons, they have decided that the don't want to maintain the ownership any more, and since I was thinking about adding on, my parents have offered to transfer their membership to me and my brother via a quit claim deed (reading other threads I am fairly certain Disney normally waives ROFR in situations like this).

When my parents bought the OKW membership in 1993, it was with the intention of allowing vacations for themselves and my 5 adult brothers and sisters and myself. The only ones of the kids who have used the account at all are my wife and I and my brother and sister in law, so my parents decided to just pass along the membership to the two of us.

Here's my question:

Since I am already involved in a DVC membership with my wife - where the two of us are the members, am I able to be part of another membership with my brother where we would both be members?

I'm sure it's an unusual situation, but I was wondering if any of you have heard of something like this before.

Thanks,

Ted

[JimP]

I cannot see why owning a DVC would preclude you from owning a different DVC contract. You are WAY under the max ownership size.

However... do you know if your parents own a single 320 point contract... or possibly several sub-contracts? It would probably cleaner if the contract was composed of two contracts of 160 points each (as an example).

/Jim

[glypnirsgirl]

Yes, JimP is correct. You can own two separate contract. The second contract you will either own as tenants in common with your brother or joint tenants with your brother. It would be better if you could split it. Then you won't have to worry about future issues.

Elaine

[wombat94]

I cannot see why owning a DVC would preclude you from owning a different DVC contract. You are WAY under the max ownership size.

However... do you know if your parents own a single 320 point contract... or possibly several sub-contracts? It would probably cleaner if the contract was composed of two contracts of 160 points each (as an example).

/Jim

It is a single 320 point contract. They were very early purchasers and no thoughts about being able to split the contract up.

I agree it would be much cleaner if we could split it up, but unfortunately we can't.

I guess that my question boils down to whether its possible for a given contract to be a sub-contract on my membership, but the "main" contract on my brother's membership when we share the ownership of that contract?

Or, barring that, is it okay for me as an individual to be party to two seperate contracts when there isn't a main contract/sub contract relationship between those contracts?

[wombat94]

Yes, JimP is correct. You can own two separate contract. The second contract you will either own as tenants in common with your brother or joint tenants with your brother. It would be better if you could split it. Then you won't have to worry about future issues.

Elaine

Thanks Elaine. I thought it would work out, but wasn't sure how it would be handled.

So my Brother will become a member and be an owner of the new contract, and I will remain a member, and will be an owner of the new contract as well.

[JimP]

I agree it would be much cleaner if we could split it up, but unfortunately we can't.

You will take a financial hit... but you could sell the contract, split the funds, and then purchase your own independent points. Personally... I would be careful about getting your finances too intertwined with your brother... it could get difficult in any number of circumstances. Even though we do not like to discuss it... people lose jobs, declare bankruptcy, get sued, get divorced, die. I am certainly not suggesting that any of the above (except eventually die) will happen to you our your brother... but sometimes life takes unwanted twists and turns.

If I had a choice between 160 points (in a shared account with my brother)... or 140 points of my own... I would choose the later.

/Jim

[wombat94]

You will take a financial hit... but you could sell the contract, split the funds, and then purchase your own independent points. Personally... I would be careful about getting your finances too intertwined with your brother... it could get difficult in any number of circumstances. Even though we do not like to discuss it... people lose jobs, declare bankruptcy, get sued, get divorced, die. I am certainly not suggesting that any of the above (except eventually die) will happen to you our your brother... but sometimes life takes unwanted twists and turns.

If I had a choice between 160 points (in a shared account with my brother)... or 140 points of my own... I would choose the later.

/Jim

Yes, I agree that it could get tricky... but, the points are coming to us free of charge as a gift from my parents, and I know that DVC points can at least be self-sustaining in terms of rental values covering maintenance dues, so I'm not too worried.

With this brother, I am not at all concerned about ability or priorities to take care of a shared obligation... some of my other siblings, I might not have that comfort level, but in this case I'm willing to take the risk.

[JessChris]

Make sure that you set up the joint ownership thoughtfully. You may not be concerned about financial obligations, but perhaps future holdings.

If you are tenants in common, then you can pass your 1/2 on to your kids through your will. If you are joint tenants, then regardless of your will, the ownership will not pass to your children, it will pass to your brother if you pass before he does.

All this is of course subject to state statutes. Sorry to be grim, but you should consider it and maybe consider consulting an attorney.

[glypnirsgirl]

Thanks Elaine. I thought it would work out, but wasn't sure how it would be handled.

So my Brother will become a member and be an owner of the new contract, and I will remain a member, and will be an owner of the new contract as well.

Correct and you will have the same contract and membership number for the contract that you hold in common which will be a different contract and member number from your current contract.

I have this myself. I bought my first contract while I was single. It is my separate property. After DH and I married, we bought another contract. We have new contract and membership numbers associated with the jointly held contract.

Elaien

[greenban]

DANGER WILL ROBINSON!!! DANGER!!!

1) Yes you can. I have 4 master memberships (UYs too!) under corporate ownership, I have 1 Master contract under my solo ownership, and 1 Master contract under my DW's name with me as a JTWROS ownership interest. So no problem there, but...............

Owning with your inlaws, places you at risk. If they want to sell and you don't (latter in life), or vice-a-versa.

What if tho go bankrupt and are forced to sell?

What if they get divorced?

What if he rents out all of the points.

What if he gets mad and cancells your December vacation. (All owners would have full ownership rights and responsibilities.

I, know, they are the greatest, and you guys all love each other, but people change, situations change, and maybe it will be YOU who changes.

Just some risks to consider.

At this point in my life (various experiences along the way) I would not do this.....unless there was no cost to me at all, including MFs...

-Tony

[tomandrobin]

Sharing a contract is a very, very sensitive issue. Problems will arise.....someone not paying their half of the maintenance fees, someone using to many points, Tony's suggested pit falls, etc.

I would suggest finding a way to split the ownership by selling it and buying two separate accounts. We have learned the hard way about "joint" ownership.

[wombat94]

DANGER WILL ROBINSON!!! DANGER!!!

1) Yes you can. I have 4 master memberships (UYs too!) under corporate ownership, I have 1 Master contract under my solo ownership, and 1 Master contract under my DW's name with me as a JTWROS ownership interest. So no problem there, but...............

Owning with your inlaws, places you at risk. If they want to sell and you don't (latter in life), or vice-a-versa.

What if tho go bankrupt and are forced to sell?

What if they get divorced?

What if he rents out all of the points.

What if he gets mad and cancells your December vacation. (All owners would have full ownership rights and responsibilities.

I, know, they are the greatest, and you guys all love each other, but people change, situations change, and maybe it will be YOU who changes.

Just some risks to consider.

At this point in my life (various experiences along the way) I would not do this.....unless there was no cost to me at all, including MFs...

-Tony

Thanks for the advice. All good points, and all things that I'm aware of regarding the pitfalls of real estate ownership with other parties involved.

Frankly, I've decided that these are a gift from my parents to my brother and me and I'm not going to let the potential problems that others have had in the past dissuade me from going ahead. If I regret it someday, than so be it. But I'm not going to let the remote potential of future regrets tarnish the good feelings we both have from our parents generosity. I've know my brother all my life (he's the older brother) and I'd trust him with my life... let alone $10K worth of vacation timeshare interest. If anything, from a financial perspective, he should be more cautious about getting in bed with me, based on some decisions I made earlier in life.

Having said that, here are my rationalizations to you points listed above: :)

If bro wants to sell and I don't, then I'll buy out his points from him at fair market value. If I want to sell and he doesn't, then I'd work out a way to sell the contract and buy a 160 pt. contract for him... I'd keep the difference in proceeds. This is "found money" to us both, so I'm not worried about getting "my half" of the value... any value is the ultimate gift from my parents.

If they are forced to sell, I'd buy out their half of the points. If they get divorced and decide to sell to split up the points, same thing.

As for the other points about rental, canceling reservations, etc... we've both been associate members on this contract for the last 10 years anyway, so we're used to sharing the points and the responsibilities that go with them.

Thanks again for the advice... I'm not unaware of the pitfalls, just comfortable in my skin and my family with ignoring them. If I get bitten by it later in life, it will be a lesson learned, but I've certainly had more expensive lessons than this one.

:)

Ted

[JimP]

Ted,

I respect your decision... especially the consideration that it is a gift from your parents. I do believe that the "gift" can in fact be split if you wanted with no out of pocket expenses... but you would end up with fewer points each (think of it as a splitting fee).

You could even buy direct from DVC and get extended contracts if that would fit your situations better... especially if you and/or brother have children.

But with total respect... I agree this is your decision to make.

/Jim

[greenban]

Thanks for the advice. All good points, and all things that I'm aware of regarding the pitfalls of real estate ownership with other parties involved.

Frankly, I've decided that these are a gift from my parents to my brother and me and I'm not going to let the potential problems that others have had in the past dissuade me from going ahead. If I regret it someday, than so be it. But I'm not going to let the remote potential of future regrets tarnish the good feelings we both have from our parents generosity. I've know my brother all my life (he's the older brother) and I'd trust him with my life... let alone $10K worth of vacation timeshare interest. If anything, from a financial perspective, he should be more cautious about getting in bed with me, based on some decisions I made earlier in life.

Having said that, here are my rationalizations to you points listed above: :)

If bro wants to sell and I don't, then I'll buy out his points from him at fair market value. If I want to sell and he doesn't, then I'd work out a way to sell the contract and buy a 160 pt. contract for him... I'd keep the difference in proceeds. This is "found money" to us both, so I'm not worried about getting "my half" of the value... any value is the ultimate gift from my parents.

If they are forced to sell, I'd buy out their half of the points. If they get divorced and decide to sell to split up the points, same thing.

As for the other points about rental, canceling reservations, etc... we've both been associate members on this contract for the last 10 years anyway, so we're used to sharing the points and the responsibilities that go with them.

Thanks again for the advice... I'm not unaware of the pitfalls, just comfortable in my skin and my family with ignoring them. If I get bitten by it later in life, it will be a lesson learned, but I've certainly had more expensive lessons than this one.

:)

Ted

Ted:

I'm glad of the relationship you and your brother have. I hear and respect your ]rationalizations, and I must admit, despite all the horror stories, some joint ownerships do work, and work well.

So I am wishing you nothing but sucess, and asking you, in turn for 1 favor.

If, the arraingement doesn't work well, or goes sour, will you please post the gory details? I promise no, "I told you so's" from me, but I do relish reading those pitiful, "I can't belive what my <insert relative here> threads!

Good luck!

-Tony

P.S. I'm glad you didn't take my negative points as personally directed at you (they weren't), but as caveats in general.)

[wombat94]

Ted:

I'm glad of the relationship you and your brother have. I hear and respect your ]rationalizations, and I must admit, despite all the horror stories, some joint ownerships do work, and work well.

So I am wishing you nothing but sucess, and asking you, in turn for 1 favor.

If, the arraingement doesn't work well, or goes sour, will you please post the gory details? I promise no, "I told you so's" from me, but I do relish reading those pitiful, "I can't belive what my <insert relative here> threads!

Good luck!

-Tony

P.S. I'm glad you didn't take my negative points as personally directed at you (they weren't), but as caveats in general.)

Oh, don't worry Tony, if he suddenly takes the red pill and heads down some weird rabbit hole, I'll post about it.

I love reading those threads as much as anyone - it's like being unable to look away from the scene of a train wreck.

:)

Seriously, though. I think that the horror stories about problems with joint ownership of things between siblings are kind of like complaints about products on internet support message boards (DVC included)... mostly you hear from the people who have had problems... those who have no problems never bother to post and share their good news.

Ted

[gblast123]

There is another solution that you should consider.

Keep the DVC membership in your parents name. But add yourself and your brother as associate members.

Both of you could share the cost of maintenence and use the points as you normally do.

If your parents have a will (they should get one if they don't already) make a specific bequest as to the DVC contract so that it will pass to you and your brother jointly. Hopefully, this will happen much later in your life!!

This solves many of the issues of joint ownership. In fact, neither you or your brother will own the points... except on a year by year basis.

I don't think that it is wise to sell the contract itself. You will have a much higher yield if you sell/rent the points each year.

Do a little math. $11 per point X 300 pts is $3300 per year. Minus $4 ppt X 300 = $1200. Your net each year will be $2100 per year X 35 years = you figure it out!!

Selling the OKW contract would be $70 X 300 = $21,000 minus 10% (broker's fee) = approx. $18, 900.

Sell the OKW contract would not be financially wise, especially when it is just as easy to sell the points each year and split the money.

email me and I will be happy to speak more about some of your options.

David
gblast123@yahoo.com

[wombat94]

Just wanted to say thanks to everybody for your advice and information.

As a recent refugee from that other site, I posted this exact message last night there to see what replied I would get from both places.

Here, I've gotten a specific answer to my question that I posed (I can do what we are considering) AND respectful, thoughtful, courteous (if unsolicited :)) advice on whether I SHOULD do what I am thinking of.

All of this from at least 4 different members. All of this for a new member that has only been here less than a week.

Over "there" I have had NO responses to my question from anyone... for a member with more than 500 posts and who's been registered there for over 8 years.

Thanks again.

I wonder if I can start a new group the "self banned from DIS"

:)

Ted

[wombat94]

There is another solution that you should consider.

Keep the DVC membership in your parents name. But add yourself and your brother as associate members.

Both of you could share the cost of maintenence and use the points as you normally do.

If your parents have a will (they should get one if they don't already) make a specific bequest as to the DVC contract so that it will pass to you and your brother jointly. Hopefully, this will happen much later in your life!!

This solves many of the issues of joint ownership. In fact, neither you or your brother will own the points... except on a year by year basis.

I don't think that it is wise to sell the contract itself. You will have a much higher yield if you sell/rent the points each year.

Do a little math. $11 per point X 300 pts is $3300 per year. Minus $4 ppt X 300 = $1200. Your net each year will be $2100 per year X 35 years = you figure it out!!

Selling the OKW contract would be $70 X 300 = $21,000 minus 10% (broker's fee) = approx. $18, 900.

Sell the OKW contract would not be financially wise, especially when it is just as easy to sell the points each year and split the money.

email me and I will be happy to speak more about some of your options.

David
gblast123@yahoo.com

David,

Thanks for the advice... we are both already associates on the membership and my parents were planning on willing it to us in the (hopefully distant) future. They decided they didn't want to wait, and so are being kind enough to gift it to us now.

This all started for us when DW and I decided to look into an add-on at AKV in order to increase our total point holdings when we want to book bigger/longer stays at DVC, and as a way to generate some rental income when we want to travel elsewhere.

When talking about it with my parents this weekend, they said that they had recently (within the last month) been discussing whether they wanted to maintain the membership and what to do about it, so the timing is perfect for them to do the transfer. My Dad never expected the DVC membership to be worth ANYTHING in 15 years when he bought it in '93 ($53/point, I believe), and as far as they are concerned they got back their entire investment in DVC with one large family vacation in 1998 that included 12 length of state passes for free for the week (2 grand villas for 6 nights each) - 17 of us stayed, and if you factored in the free admission from that one trip and a reasonable discount from rack rates - the cash equivalent of those 2 GVs and the admission was more than the total cost of purchasing the points.

To my parents, the "value" of the membership isn't in the money they spent to acquire it, but in vacationing with their kids (and especially grand-kids) at Disney. They don't want to be bothered with the annual dues, and would rather not have to deal with the ownership at all at this point, so the gifting of it to by brother and me seems ideal. We are of course very grateful and both plan on continuing the sharing of the points that my parents demonstrated.

[JimP]

OK... plan C: This is the last one... I promise (unless I think of something else)

You and your brother split the cost of buying yet another 320 point contract... and you each have one. You can never have too many points ;)

/Jim

[wombat94]

OK... plan C: This is the last one... I promise (unless I think of something else)

You and your brother split the cost of buying yet another 320 point contract... and you each have one. You can never have too many points ;)

/Jim

Yeah... we've thought of other creative ideas like that as well. None of them really works for us.

Since this whole thing started with the fact that I was considering an add-on, I thought about transferring my 150 point HH membership to my brother and taking the 320 point membership from my parent, except for two things - my brother want the 11 month window in orlando (one of the reason that I was considering an add-on) and the dues at HHI are higher.

The crazy thing is (once you break the seal on adding on points) I'm still considering adding on the 100 points at AKV... instead of 150 points (which have been fine for us for the last 8 years) or 250 points, which were going to be enough when we were going to buy the 100 extra points last week, we'll likely go straight to 410 points now.

:)
:dancingba

[Blue&Gold]

I wonder if I can start a new group the "self banned from DIS"

You can... But you aren't the first!

[glypnirsgirl]

The crazy thing is (once you break the seal on adding on points) I'm still considering adding on the 100 points at AKV... instead of 150 points (which have been fine for us for the last 8 years) or 250 points, which were going to be enough when we were going to buy the 100 extra points last week, we'll likely go straight to 410 points now.

:)
:dancingba


OH NO ANOTHER CASE OF ADDONITIS!!! There is no known cure and the only treatment is TEMPORARY: add more points!

(and on a more serious note, I am not surprised you never got a reply at the other site, i could never navigate it well enough to find what I was interested in)

Elaine

[Mary]

Perhaps you could give your brother your 150 point contract, a small amount of money for the 10 points he would lose, and you keep your parents 320 pt. contract. Mary