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Opinion on Trusts

Deej82

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Good morning. Appreciate some advice in advance. I know folks have all different arrangements for passing on timeshare ownerships, depending on financial, family politics etc. My wife and I are owners, as are my parents. My brother is getting married this year but a little behind us in age and career position. We are Chairmans Club owners, and my parents are Executive. Two of their original weeks also have my name on the deed, so they contributed to our status level as well. And I sometimes book/rent them out for them so it's been convenient for us. They own several other weeks/points with just their names. Now they are trying to figure if they should be moving all of their weeks into a Trust for long-term convenience/organization. We all get along, and do enjoy family vacations together.. so pooling our points/weeks and trading inside the family have served us well. My initial thoughts would be push all of their ownership into a trust to maintain ownership status level (while keeping my name on the two weeks so we don't drop below CC), and probably I would coordinate with my brother and his family on what they want to do each year (aka family travel agent), maintenance fees etc. If someone is short on cash for some reason, then I can always rent weeks out to cover.. but ownership of their units would stay with the trust.

Looking for any advice if the trust is the way to go for them... they are going to work with their attorney but specific ups and downs would be nice to hear from other owners. Any best practices etc.. Hopefully not a time-urgent matter but something they have been thinking about..

Thanks in advance for your advice!
 

kds4

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This is something that my wife and I have been talking about regarding our kids as well. Preserving our current/future ownership level is something we want our kids to continue to have access to and we are also considering a trust arrangement. It would be nice to know if anyone else has already done this and what the results have been.
 

GregT

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We own our weeks in our family trust and it is a non-issue from a usage perspective. Assuming this makes sense from an estate planning perspective (and I think it probably does) I think you would be very happy with how seamless this transition will be.

I'm not sure I follow the specific question though? We don't notice any difference in usage -- we do have two DC accounts and have been told that the second one is needed because our weeks are owned by the Trust, but its invisible to my usage. My weeks are held by one account and I pay the DC fee into the other account -- no idea why there are two.

I also wouldn't think it would be a problem keeping your name on the deed with the new trust as well.

Am I interpreting the question correctly?

Best,

Greg
 

BocaBoy

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I also wouldn't think it would be a problem keeping your name on the deed with the new trust as well.
You can certainly share ownership with the trust, but that does not make much sense from an estate planning perspective, which is the main reason you would use a trust.
 

VacationForever

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My trust attorney asked if our timeshares were of much value, in which we said maybe worth just a couple of thousands - the Marriott ones are worth more. Her opinion was that if it is of high value, put in the trust. If of low value, keep them outside.
 

bogey21

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Putting a Week in a trust pretty much sets things in stone. Because we are dealing with a situation that may take place 15-20 years from now I believe leaving it to one or more of your family members in your will creates more flexibility as they can decline the inheritance and get out from under it that is their choice.

George
 

dioxide45

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Putting a Week in a trust pretty much sets things in stone. Because we are dealing with a situation that may take place 15-20 years from now I believe leaving it to one or more of your family members in your will creates more flexibility as they can decline the inheritance and get out from under it that is their choice.

George

You still would want a will with the trust. The will designates who gets property upon your death. The trust just allows that property to be transferred to the beneficiaries more easily. Whether in a trust or not, the beneficiary can still decline the inheritance.
 

Superchief

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You can certainly share ownership with the trust, but that does not make much sense from an estate planning perspective, which is the main reason you would use a trust.

We were considering a trust so we can preserve the benefits of our Chairman level MVC status. We are concerned that most benefits will be lost if we split the timeshare among our children and other family members.
 

NYFLTRAVELER

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Other people purchase their interests in a limited liability company (LLC) which has advantages as well. Any person can be a member of the LLC and its easy to add and delete members. Also, while not condoning it, as a colleague mentioned to me in the past, if you have an LLC where the TS ownership is the sole asset and want to walk away from it and the financial obligations, its easier to do when it is not in your personal name where you may otherwise have a concern about negative credit reporting etc.
 

larryallen

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My trust attorney asked if our timeshares were of much value, in which we said maybe worth just a couple of thousands - the Marriott ones are worth more. Her opinion was that if it is of high value, put in the trust. If of low value, keep them outside.

Not great advice in my opinion. The problem is timeshares, even low value, are liabilities not assets. You need to make it easy for your descendants to get rid of your timeshares even if they don't want them. Not having them in the trust can make a probate be required after death. Often a small estate probate procedure but still unnecessary money being spent. Also, often a multi-state issue as people have timeshares in Nevada, Hawaii, AZ, etc..... I have been an estate planning and probate attorney for over 20 years and been hired to deal with low value timeshares after death several times. It can be a huge issue. Primarily speaking of real estate interests of course and not points timeshares with no real estate. The points ones are easy to resolve at least for California decedents. P.S. More attorney fees the better for me but for proper planning put your timeshares in your trust and you will save your family money and time after death!
 

Jason245

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We were considering a trust so we can preserve the benefits of our Chairman level MVC status. We are concerned that most benefits will be lost if we split the timeshare among our children and other family members.
Are you sure that they will even allow that (mvc)...

I would imagine that should be your first question. And go from there. Unless you are also funding the trust with the assets that generate enough income to pay annual mf, or your kids are inheriting enough to do that, this all might be an expensive mute point. .

Personally, I wouldn't do anything until the children express ownership interest and/or financial capabilities to pay the mf... otherwise you are going to have to pay all this money (including annual tax returns and trust admin fees potentially ) for something that doesn't accomplish what you want it to.

Also, what happens when one of the kids says they don't want anything to do with timeshare, but the other (s) say yes..or there is some family rift in 10 years etc...

To many unknowns... my focus with that much ownership would be the shield my estate from annual mf obligations so my kids get maximum cash possible. ..

Sent from my SAMSUNG-SM-N910A using Tapatalk
 

VacationForever

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Not great advice in my opinion. The problem is timeshares, even low value, are liabilities not assets. You need to make it easy for your descendants to get rid of your timeshares even if they don't want them. Not having them in the trust can make a probate be required after death. Often a small estate probate procedure but still unnecessary money being spent. Also, often a multi-state issue as people have timeshares in Nevada, Hawaii, AZ, etc..... I have been an estate planning and probate attorney for over 20 years and been hired to deal with low value timeshares after death several times. It can be a huge issue. Primarily speaking of real estate interests of course and not points timeshares with no real estate. The points ones are easy to resolve at least for California decedents. P.S. More attorney fees the better for me but for proper planning put your timeshares in your trust and you will save your family money and time after death!

But by the same token if it is not in a trust and no one wants to put the timeshare through probate, no one owns them and they become abandoned. Easy way to get of a worthless timeshare.
 

snowgoose

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But by the same token if it is not in a trust and no one wants to put the timeshare through probate, no one owns them and they become abandoned. Easy way to get of a worthless timeshare.

Are you sure they would become abandoned with no recourse by the timeshare company? I thought the timeshare company has legal right to pursue the heirs. Maybe larryallen can provide some insight on this.

Regardless, I am going to move my 2 weeks at MOC into my trust to avoid probate and any issues.
 

VacationForever

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Are you sure they would become abandoned with no recourse by the timeshare company? I thought the timeshare company has legal right to pursue the heirs. Maybe larryallen can provide some insight on this.

Regardless, I am going to move my 2 weeks at MOC into my trust to avoid probate and any issues.

Distribute all assets to heirs except for the timeshares. After there is no money left in the estate, administrator can write to the HOA to say no one wants the timeshare. Since they were not willed to anyone, I don't believe HOAs have anyone to pursue.
 

bogey21

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Distribute all assets to heirs except for the timeshares. After there is no money left in the estate, administrator can write to the HOA to say no one wants the timeshare. Since they were not willed to anyone, I don't believe HOAs have anyone to pursue.

To be safe all heirs should formally decline the inheritance of the TimeShare Weeks in in writing in a timely manner.

George
 

larryallen

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So it's clear to the above posts about abandoning the timeshare. Again, this is a poor plan in my opinion. All assets of a trust are theoretically liable for a decedent's creditors (at least in California) even if the asset/debt is not in trust. Likewise, in theory at least, a trustee could be liable for ignoring a debt that they know of even if the debt (or asset) is not a part of the trust. It could be akin to fraud and thus extend the liability period beyond the general one year after death statute of limitations.

As for the comment about separate tax returns that is wrong. Revocable living trusts use your social security number and you can continue filing everything on your 1040. There is no need for a 1041 (fiduciary return) or tax ID number until after death (or change of trustee to someone other than the Settlor of the trust).

I have had a few clients hounded by timeshare companies after death due to unpaid MFs. It could get worse if the economy were in worse shape. Thus timeshares should be treated as a liability and plan ahead so your family can get rid of it as easy as possible.

Also, timeshares are difficult to transfer in probate. At least in California they have to be appraised by the probate referee, documents filed in court, executor deeds filed, etc.... MUCH easier to transfer to a trust during life which then gives your successor trustee the ease of transferring it further after death.

Again, just my two cents.
 

snowgoose

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larry,

Thanks for your two cents, you reassure my decision to put my two weeks in my trust. Too bad you are in NoCal, if you were in SoCal I would use your services as it will be a crap shoot for me to find the right attorney or title agency. Do you have any references for San Diego area?

Thanks again
 

taterhed

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Remember: the trust is only the vessel; the will and testament is the real meat.

The will preparation should be an integral part of the process.
So, if not already done, you'll need to think about:
Who will be the trustees in this living trust?
Who will be the executor and the process leading to this (with multiple trustees)?
Living wills? Medical instructions?
Preservation of assets for minors/young adults/reduced capacity owners/trustees?
Protection from challenges (legal, divorce, disinheritance); no-contest?

I bring this up because....some of these discussions could be very, very difficult to have in front of children, spouses or loved ones. Best to have everyone review their thoughts first before having a big-'ole family roundhouse argument about who might be getting divorced (or not) :eek:. Or senile...:zzz:

IMHO. Our kids were a bit surprised to learn that we didn't trust them with the proceeds of ALL our assets and insurance ($$$ at once) if we didn't come back from vacation some day...

cheers
 

larryallen

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larry,

Thanks for your two cents, you reassure my decision to put my two weeks in my trust. Too bad you are in NoCal, if you were in SoCal I would use your services as it will be a crap shoot for me to find the right attorney or title agency. Do you have any references for San Diego area?

Thanks again

I should think any estate planning attorney should be able to help you. A title company is not needed to transfer timeshares to trust. I would say $500 or less to get two weeks into the trust. I'll PM you a name or two.
 

dioxide45

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I should think any estate planning attorney should be able to help you. A title company is not needed to transfer timeshares to trust. I would say $500 or less to get two weeks into the trust. I'll PM you a name or two.

A timeshare closing agent may still be helpful and cheaper than paying the attorney to prepare the deed. The deed also needs to be recorded and someone still needs to notify Marriott that the timeshares are now in the name of the trust. Someone like LT has all that information and necessary form and is probably the best option to go to for this type of transaction and to make sure the deed is prepared properly and the resort is notified.
 

VacationForever

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So if a timeshare is taken in joint tenancy, typically a couple and not in a trust, if one dies, is it a simple act of producing death certificate to effect a transfer in the event that the timeshare is then sold?
 

larryallen

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A timeshare closing agent may still be helpful and cheaper than paying the attorney to prepare the deed. The deed also needs to be recorded and someone still needs to notify Marriott that the timeshares are now in the name of the trust. Someone like LT has all that information and necessary form and is probably the best option to go to for this type of transaction and to make sure the deed is prepared properly and the resort is notified.

Totally true. Especially if you are in real estate you can often get a title company to prepare a deed for free. Also, be alert that title companies make mistakes on deeds (just like attorneys do). The most common title company mistake I have seen is that they change the name of the trust, ever so slightly, on the deed. Always make sure your deed (and other assets) matches your exact trust name and date. Estate planning attorneys do a lot of deeds as well and thus are well qualified to assist. We prepare living trusts daily and transfer all types of deeds to those trusts daily. Thus it's common work for us. Plus, estate attorneys are used to dealing with the timeshare companies also assuming they have a decent practice. Let me clear I am not seeking small clients like timeshare transfer deeds. Just trying to make sure people know the options. :) P.S. One state we always hire out is Hawaii as they have different rules there. We use a specific attorney there who is well versed in timeshare transfers. He's very reasonably priced in my view (usually around $300). It's called Hawaii Document Service. The attorney is named Jerry Garcia. Really.
 

larryallen

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So if a timeshare is taken in joint tenancy, typically a couple and not in a trust, if one dies, is it a simple act of producing death certificate to effect a transfer in the event that the timeshare is then sold?

No question a joint tenancy can work for any real estate ownership. Upon death an affidavit of death of joint tenant is recorded in the county, along with the death certificate, to remove the decedent's name. Then what? The survivor should put it into a trust or add another joint tenant. Back to square one! This all works great if people die in order and are mentally competent. How do you sell a timeshare if both joint tenants are alive but one (or both) are mentally incompetent? Powers of attorney won't work to sell real estate unless it's a "specific" power of attorney and I have never seen someone do that for a timeshare. You'll be stuck and have to get a conservatorship potentially. You'll quickly spend way more than the timeshare is worth. Thus a trust is a much better answer for ownership of any real estate interest.
 

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Totally true. Especially if you are in real estate you can often get a title company to prepare a deed for free. Also, be alert that title companies make mistakes on deeds (just like attorneys do). The most common title company mistake I have seen is that they change the name of the trust, ever so slightly, on the deed. Always make sure your deed (and other assets) matches your exact trust name and date. Estate planning attorneys do a lot of deeds as well and thus are well qualified to assist. We prepare living trusts daily and transfer all types of deeds to those trusts daily. Thus it's common work for us. Plus, estate attorneys are used to dealing with the timeshare companies also assuming they have a decent practice. Let me clear I am not seeking small clients like timeshare transfer deeds. Just trying to make sure people know the options. :) P.S. One state we always hire out is Hawaii as they have different rules there. We use a specific attorney there who is well versed in timeshare transfers. He's very reasonably priced in my view (usually around $300). It's called Hawaii Document Service. The attorney is named Jerry Garcia. Really.
Thanks Larry. How do I go about finding the title company for my Marriott timeshares (both deeded property and beneficial interests for points which I think are also considered deeded property) to request that they prepare a deed? Or if a title company cannot prepare the deed, who else can? Do I ask them to prepare the deed in the name of the trust? And then when the timeshares are in the trust, is there a problem booking weeks because the property is now in the name of the trust? I appreicate your knowledge and help.
 

vacationtime1

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Thanks Larry. How do I go about finding the title company for my Marriott timeshares (both deeded property and beneficial interests for points which I think are also considered deeded property) to request that they prepare a deed? Or if a title company cannot prepare the deed, who else can? Do I ask them to prepare the deed in the name of the trust? And then when the timeshares are in the trust, is there a problem booking weeks because the property is now in the name of the trust? I appreicate your knowledge and help.
I would use LT Transfers; they will charge a fraction of what a title company would charge.

But if your deeded weeks are enrolled, I would first have Marriott verify in writing that the transfer into the trust will not unenroll those weeks (it shouldn't be an issue, but you can never be too sure).

You will presumably be a named trustee, so you will have the right to make reservations. You will get communiques from Marriott addressed to "Mr. ..... Trust" or "Ms. ...... Trust".
 
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