Convoluted gifting of DVC contract

[GinnyBear's_mom]

A family friend has approached us with an interesting proposal and I would love any feedback.

Our family friend Barbara (mid 70's) owns 175 pts at BLT, purchased direct when it opened. She is divorced and owns the contract outright. Her children have no interest in Disney and don't travel at all. Barbara misses vacationing in Disney and now has no one to travel with. We have a trip scheduled in 2021 and invited her to tag along. In the past, people have cozied up to her to get her to gift her BLT points. Recently someone offered to help her out by doing shopping etc. for her since she is high risk for Covid. They helped her for several weeks then told her she could pay them back for their kindness with a free week at Disney with her DVC points. That didn't go over too well! She decided she wants to get rid of her contract.

We share a love of all things Disney and she has no one else in her life that she can talk about Disney with. She asked if we would be willing to purchase the contract. We already own 2 contracts: 1 direct at VGF in 2014 in 1 resale at AKV in 2018. We love both resorts but find ourselves often trying to get availability at 7 months at BLT which is our favorite resort. We have the cash on hand to purchase a BLT contract (and considered adding on via DVC Resale Market recently) but with the job market the way it is going we prefer not to and we let Barbara know that now is not the time for us to say goodbye to that much cash.

Barbara asked if we would consider paying her dues for a few years to have access to her points. We could have my name added to the deed through a gratuitous transfer. She also asked if we would consider inviting her on our BLT vacations for 5 nights every 2 years, which we are fine with, giving her 12 months notice of our vacation dates and upgrading to the 2 bedroom if she decides to join us. We haven't mentioned it to her but we would like to also pay for her meals that she eats with us during our trips. We prefer to vacation about 2-3 weeks a year at Disney, sometimes all in one big trip sometimes vacationing 2x a year. We sometimes have trips with just our family of 5 but we love sharing Disney with others and about half our trips are with family and friends so inviting her along is not an issue.

After 6 years she has offered to let us remove her name from the contract and then we would own it outright so this would be like a rent-to-own type of situation. I feel like this is a fantastic deal on our end, we would only spend about $7000 during the 6 years for her dues. On Barbara's end she doesn't have to worry about dues, contracts with strangers, people preying on her for her DVC points and she gets someone to plan a trip for her every other year. We would be her trip planners and help her with what she misses the most- being able to enjoy Disney again.

I'm aware that with her name on the contract she could 'lose' it if she were sued. She owns several different properties outright and rents them so I'm not sure the DVC contract is what a lawyer would go for 1st but it is always a possibility. If after 6 years she decides she does not want to remove her name from the deed (she has not brought this up but we thought about it as a just in case) we would remove my name from the deed and consider ourselves lucky that we had 6 years to rent BLT points at a super-low price.

What downsides do you see to this? What should I be wary of? Is there something we haven't thought of? I would live any input you have to share

 

[Chuck S]

I guess whether to be wary would depend upon how close of friends you really are. I'm in a similar position, I have very little biological family left, just distant cousins. I have 345 points at OKW, and while I don't mind an occasional solo trip, it is also enjoyable having friends along. Now, that said, my friends are my sole heirs, and I haven't transferred title, I figured they can do that when I'm dead. But I do invite them as often as they can go, and they always pay my meals, and if I don't have an active annual pass, they often buy my park ticket (when their retired military dad goes along)...military get a great deal on the tickets. They even sometimes pay my airfare.

In your situation, you'd be paying the dues, and she'll add you to the deed. Once that it done, she would need your written consent to remove your name, so it sounds pretty low risk, and a great benefit to you.

 

[Sandisw]

Once you are on the deed, you can’t remove your name in 6 years without her agreeing to sign off. All owners have to sign to change the deed.

i know gratuitous transfers are allowed with family members so I’d just make sure to ask DVC if there is anything special needed for them to waive ROFR. I don’t believe there is since she will remain owner but figured it might be worth checking beforehand.

 

[Miffy]

Potential difficulties to consider might be:

• Your financial circumstances change and paying Barbara's dues would become difficult for you to do. This could make things uncomfortable between you and your friend.
• Barbara's financial circumstances change and she has to sell her BLT contract before the 6 years are up. Maybe this isn't exactly a problem, but it is a consideration. You could get only a couple of trips out of this instead of 6 years' worth.
• Pandemic redux. Let's hope this would never happen, but you already have your own points at risk in a situation like that--now you'd have Barbara's points at risk as well.
• Barbara becomes infirm, worse, or dies. I hate to bring these things up--it's Disney we're talking about here-but, well, any of these things could happen. What happens then? You've paid the dues for the year and booked the points and then Barbara (and her contract) are no longer in the picture. Now you're out the dues you paid, with no ability to use those points.

 

[Chuck S]

Potential difficulties to consider might be:

• Your financial circumstances change and paying Barbara's dues would become difficult for you to do. This could make things uncomfortable between you and your friend.
• Barbara's financial circumstances change and she has to sell her BLT contract before the 6 years are up. Maybe this isn't exactly a problem, but it is a consideration. You could get only a couple of trips out of this instead of 6 years' worth.
• Pandemic redux. Let's hope this would never happen, but you already have your own points at risk in a situation like that--now you'd have Barbara's points at risk as well.
• Barbara becomes infirm, worse, or dies. I hate to bring these things up--it's Disney we're talking about here-but, well, any of these things could happen. What happens then? You've paid the dues for the year and booked the points and then Barbara (and her contract) are no longer in the picture. Now you're out the dues you paid, with no ability to use those points.

But once they are on the deed, assuming they are joint tenants, they will inherit it automatically. And, again, once on the deed, if Barbara needs to sell, she would need their permission and signature, they'd also be entitled to 1/2 the sales price when it goes to closing. Agree that it could potentially be an uncomfortable situation, but if all they're paying is dues, and they pay those annually, the risk is minimal. other than a new pandemic or other natural disaster.

 

[LSchrow]

Aside from the possible problems already mentioned, the scenario may get very sticky if she passes during the time the contract has your name on as owner. Her heirs/children may not have an interest in DVC, but they would likely want to see the entire contract as part of her estate.
A better solution may be for her to retain the contract, then she can transfer all her points to you annually (note that this would max out both yours & her 1x per year in/out transfer), and you simply pay her dues. I would avoid using your banking info for the contract (another possible sticky situation in case of her untimely passing), and simply give/transfer her the money for the dues every year.
With an annual transfer, you would have control of the points to make your plans with her, can combine the points at 7 months, and there will be fewer/no difficulties if she changes her mind, her children object, she passes or becomes ill. If at the end of the decided term she still wishes to sell, she could sell/do a gratuitous transfer to you, or place it on the resale market.

 

[Chuck S]

Aside from the possible problems already mentioned, the scenario may get very sticky if she passes during the time the contract has your name on as owner. Her heirs/children may not have an interest in DVC, but they would likely want to see the entire contract as part of her estate.
A better solution may be for her to retain the contract, then she can transfer all her points to you annually (note that this would max out both yours & her 1x per year in/out transfer), and you simply pay her dues. I would avoid using your banking info for the contract (another possible sticky situation in case of her untimely passing), and simply give/transfer her the money for the dues every year.

In most states, anything in joint tenancy is an automatic inheritance, regardless of any other heirs. Joint tenancy supersedes a will. That is why it would be important to be sure the deed is Joint Tenancy and not Tenants in common.

 

[Miffy]

But once they are on the deed, assuming they are joint tenants, they will inherit it automatically. And, again, once on the deed, if Barbara needs to sell, she would need their permission and signature, they'd also be entitled to 1/2 the sales price when it goes to closing. Agree that it could potentially be an uncomfortable situation, but if all they're paying is dues, and they pay those annually, the risk is minimal. other than a new pandemic or other natural disaster.

Ah, thanks, Chuck. I didn't realize that.

 

[Disneykate605]

Sounds like a win-win to me!

 

[starry_solo]

Would this really be a gratuitous transfer though?

I think it would be better for Barbara to transfer the year's points to you, each year, for the cost of the maintenance fees.

 

[4luv2cdisney]

I would make sure her children / family is aware. Especially if there could be ANY question to her memory / competency at this time. I assume if you are taking her on vacations, the family knows you and of the arrangement, but maybe not.

Regardless of her mental state, if they find out later down the line and are unhappy with the scenario, they could accuse you of elder abuse. Even if they can't / don't win, being in that position is highly stressful. I have seen families do really crazy things when it comes to money.

Barbara is bearing the risk in this situation. Once she puts your name on, you own 50% of the contract. I do not think Disney will have any issue with this by the way.

 

[GinnyBear's_mom]

Thanks so much for your input everyone, I will make sure this is clarified for her children

 

[CraigInPA]

Whatever you choose to do, put everything in writing, and have it signed by both you and Barbara at the notary.

 

[travelplanningnerd]

A family friend has approached us with an interesting proposal and I would love any feedback.

Our family friend Barbara (mid 70's) owns 175 pts at BLT, purchased direct when it opened. She is divorced and owns the contract outright. Her children have no interest in Disney and don't travel at all. Barbara misses vacationing in Disney and now has no one to travel with. We have a trip scheduled in 2021 and invited her to tag along. In the past, people have cozied up to her to get her to gift her BLT points. Recently someone offered to help her out by doing shopping etc. for her since she is high risk for Covid. They helped her for several weeks then told her she could pay them back for their kindness with a free week at Disney with her DVC points. That didn't go over too well! She decided she wants to get rid of her contract.

We share a love of all things Disney and she has no one else in her life that she can talk about Disney with. She asked if we would be willing to purchase the contract. We already own 2 contracts: 1 direct at VGF in 2014 in 1 resale at AKV in 2018. We love both resorts but find ourselves often trying to get availability at 7 months at BLT which is our favorite resort. We have the cash on hand to purchase a BLT contract (and considered adding on via DVC Resale Market recently) but with the job market the way it is going we prefer not to and we let Barbara know that now is not the time for us to say goodbye to that much cash.

Barbara asked if we would consider paying her dues for a few years to have access to her points. We could have my name added to the deed through a gratuitous transfer. She also asked if we would consider inviting her on our BLT vacations for 5 nights every 2 years, which we are fine with, giving her 12 months notice of our vacation dates and upgrading to the 2 bedroom if she decides to join us. We haven't mentioned it to her but we would like to also pay for her meals that she eats with us during our trips. We prefer to vacation about 2-3 weeks a year at Disney, sometimes all in one big trip sometimes vacationing 2x a year. We sometimes have trips with just our family of 5 but we love sharing Disney with others and about half our trips are with family and friends so inviting her along is not an issue.

After 6 years she has offered to let us remove her name from the contract and then we would own it outright so this would be like a rent-to-own type of situation. I feel like this is a fantastic deal on our end, we would only spend about $7000 during the 6 years for her dues. On Barbara's end she doesn't have to worry about dues, contracts with strangers, people preying on her for her DVC points and she gets someone to plan a trip for her every other year. We would be her trip planners and help her with what she misses the most- being able to enjoy Disney again.

I'm aware that with her name on the contract she could 'lose' it if she were sued. She owns several different properties outright and rents them so I'm not sure the DVC contract is what a lawyer would go for 1st but it is always a possibility. If after 6 years she decides she does not want to remove her name from the deed (she has not brought this up but we thought about it as a just in case) we would remove my name from the deed and consider ourselves lucky that we had 6 years to rent BLT points at a super-low price.

What downsides do you see to this? What should I be wary of? Is there something we haven't thought of? I would live any input you have to share

Nothing to add as far as the logistics related to the contract/deed. But the people referred to in the bold are jerks. I bet that was their intention all along - to ask to use her points.

 

[js]

I like the idea of each year paying dues and then have her transfer points. After six years, then she can transfer the deed directly to you, if she is well enough or not dead

 

[ford91exploder]

Dont forget the 5 year medicare 'lookback' period, If she needs to be transferred into a ECF Fedzilla will be there looking to unwind the transaction 5 years after closing and will want your money and your blood.

Might be best if as others have suggested to pay her MF's and have her transfer the points to you. Have her will the contract to you after her passing it will prevent many possible unpleasant surprises.

For ease of use you might want to consider something like a 25 point direct contract (if still available from Disney) so she can simply transfer the points to your account.

 

[RoseGold]

I don't think this is ethical. You can't afford to buy a five figure asset.

If she wants to give it to you, take it. If she needs money, help her sell it.

Maybe she wants to transfer points to you for a couple years for the cost of the MFs, that makes sense to me.

This is like a car. Can you borrow the car for a little while? Sure. But long run, you should help her sell it if you can't afford it. You definitely shouldn't joint title the car or whatever mess, so you feel like you got a good deal. I wouldn't be doing all this mess and getting tangled up in Medicare and probate. I'd either buy it correctly, or help her sell it.

 

[Chuck S]

I don't think this is ethical. You can't afford to buy a five figure asset.

IF the owner is mentally competent, and it sounds like she is, as she realizes her kids aren't Disney fans, she likely would rather gift it to someone she knows would use it and enjoy it as it was meant to be used. And if you assume she doesn't need the money, but really wants someone to travel with and her kids don't want to travel with her, don't see anything unethical in that.

 

[starry_solo]

Going back and reading the original post....something about it screams potential financial elder abuse.

just pay her to transfer her points each year since you’re also a DVC member.

 

[RoseGold]

IF the owner is mentally competent, and it sounds like she is, as she realizes her kids aren't Disney fans, she likely would rather gift it to someone she knows would use it and enjoy it as it was meant to be used.

So gift it then. Don't do this mess with joint title and a half transfer.

It sounds like OP is trying to get a deal on something they can't afford and the elder doesn't want to gift.

This is a five figure asset. Do it right.