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Transfer VIP Deed to Family LLC?

ljc50

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My elderly parents have a large VIP account which is costing them loads in maintenance fees. It is currently in their trust to be passed equally to their 3 grown children. We the children are in the process of trying to figure out what the best way is to reduce our parents financial obligation (already rent out) and also limit our own financial burden in the future but still maximize the investment and benefit of owning VIP. One consideration is to create a family LLC to transfer the account to. I’m interested in hearing the benefits/disadvantages of doing this and I’m also interested to know if the VIP benefits would continue to exist. I would appreciate all advice in helping my siblings and I help make the best decision for the entire family. Thank you.
Lisa
 

dgalati

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My elderly parents have a large VIP account which is costing them loads in maintenance fees. It is currently in their trust to be passed equally to their 3 grown children. We the children are in the process of trying to figure out what the best way is to reduce our parents financial obligation (already rent out) and also limit our own financial burden in the future but still maximize the investment and benefit of owning VIP. One consideration is to create a family LLC to transfer the account to. I’m interested in hearing the benefits/disadvantages of doing this and I’m also interested to know if the VIP benefits would continue to exist. I would appreciate all advice in helping my siblings and I help make the best decision for the entire family. Thank you.
Lisa
The loads of maintenance fees and the the VIP benefits will be passed along to the family no matter how it is transferred. As far as reducing your parents financial burden or obligation the only way to do this is as you stated renting or the siblings can start paying the maintenance fees. A timeshare is really not considered a monetary asset but it can easily be considered a liability if you consider the monthly maintenance fees. Best advice I can give you is learn the system and use it to recieve what is being paid monthly in maintenance fees. You could help by letting us know what are the monthly $/1000 of the maintenance fees. If your parents are paying more than what it can be rented for you may be better off giving the ownership back to Wyndham if it qualifies for Ovations. Renting can be very time consuming and most VIP owners are renting in the $6/100o range so if your parents have a higher $/1000 it may be hard to just pay maintenance fees. Good luck with learning and finding a way all siblings can maximize their ownership.
 

ljc50

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Thank you for your response. I have been doing pretty well with my renting, getting more around 10/1000, offsetting their approximate 7/1000. Our goal is try to rent enough to offset the fees, still allowing us to use it. Still looking to understand the benefits of moving to an LLC. I think it will allow us kids to become owner's as well, therefore not needing to use guest certificates plus protecting us should we run into problems later with maintenance fees.
 

55plus

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You should go through an attorney to do it right.
 

Braindead

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Thank you for your response. I have been doing pretty well with my renting, getting more around 10/1000, offsetting their approximate 7/1000. Our goal is try to rent enough to offset the fees, still allowing us to use it. Still looking to understand the benefits of moving to an LLC. I think it will allow us kids to become owner's as well, therefore not needing to use guest certificates plus protecting us should we run into problems later with maintenance fees.
Hang around & hopefully @Sandi Bo will post or PM you. She’s dealt with a family ownership similar to yours for years.
You may want to stay with the ownership as it is today for a few years to see how the family dynamics work out.

Never do anything with the ownership unless you have it in writing from Wyndham that the ownership will keep the VIP status with how you transfer the ownership.
 

ljc50

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Thanks. Yes, I’m concerned about that as I’m much more familiar with Wyndham and their ways than my brother is and he is the one pushing for moving it out of my parent’s trust - I have just been managing it sort or rough. I understand his desire to get things settled but I don’t want to move a Platinum VIP that I’ve managed to recoup a significant amount maintance in for the last 8 years to an account that only has high maintenance fees without VIP benefits. Let’s face it, that’s what makes it possible to recoup some of the costs through renting. Love to hear from more people.
 

ljc50

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Not to mention, I’m a little concerned about how to manage the equality of usage when there are 3 children and there is an element of rentals as well. When I do it now for my parents, I pretty much have control of how much gets rented and there is still always enough for the family to use.
 

dgalati

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Learn to use it and maximize the VIP discounts. The $7/1000 can be a problem when economy turns down. Plan on it being cash negative and if you manage to make it positive with rentals count yourself lucky.
 

md8287

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When talking with your attorney ask difference between a Family LLC and a Family Trust (mine suggested a Trust for us).
Also do your siblings want to take on the liability? I'm sure your parents paid a lot and think its a great thing to pass down evenly but if you're doing all the work now that probably won't change later. It may be better to assess the potential future tension now rather than later. Maybe it makes sense for them each to get ###,000 of points per year and they will pay 7/1,000 and you get the rest but are on the hook for the rest?
 

HitchHiker71

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Thank you for your response. I have been doing pretty well with my renting, getting more around 10/1000, offsetting their approximate 7/1000. Our goal is try to rent enough to offset the fees, still allowing us to use it. Still looking to understand the benefits of moving to an LLC. I think it will allow us kids to become owner's as well, therefore not needing to use guest certificates plus protecting us should we run into problems later with maintenance fees.

AFAIK as children, whether the VIP account stays in the trust or it is put into a LLC, you and your siblings will inherit ownership and the VIP status will stay intact. This is standard procedure for direct inheritance of accounts - as long as the account isn’t divided up as part of your parents wishes in their will - becoming three separate accounts - none of which will hold enough points to qualify for VIP status.

Your parents could add you all to the account and to the deeds now as well, or just you now, with the understanding that anyone added does become responsible for any/all financial liabilities associated to the Wyndham account.

One of the potential advantages of considering a LLC is that the named Managing Partner(s) can be changed without Wyndham’s knowledge. Whomever is named managing partner of the LLC would therefore continue to enjoy the VIP benefits associated to the account. This assumes the account and the deeds are only in the name of the LLC itself of course. I’ve never done this myself, but have heard of others doing this with LLCs.


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goaliedave

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One hilarious effect of having ownership in a LLC is that the reservations get booked in that name (at least with Marriott-Sheraton). I used to forget and they could never find my reservation. Plus their software split it arbitrarily into 1st name last name as ABCC orp so i get addressed as Mr. Orp.

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LDBEH

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My parents also owned a large VIP Platinum account. About 8-10 years ago, after an additional purchase, my sister and my name were placed on the account...each tied to a million points. My father would rent out many of the points to pay for the year's maintenance fees and he and mom would travel 12-15 weeks a year. After my father passed 7 years ago, I took on trying to rent out and recoup the maintenance fees. After a year or so I got pretty good at it (before Wyndham took away some of the "benefits"). Now I continue to rent out a few specific places and then to friends and family for a little more than cost of the points. I break even or make a few bucks each year and mom, my sister, and I get a couple of trips in the mix as well. Right now the cost is not an issue and as I said, we are breaking even or making a bit extra depending on what I can pick up late and rent. Who knows what the future will hold...I do all of the Wyndham rentals and pretty much control the account. All of the money made goes back to cover maintenance fees and the rest I split with mom (don't tell my sister).
 

ljc50

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Thank you everyone for your valued experience. Please keep sharing. I am looking specifically for anyone whom has transferred parental ownership to a Family LLC (created by children) and/or lawyers whom have been involved in this process with Wyndham. I'm looking to refer my lawyer to your lawyer. Thank you.
 

ecwinch

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I have always been curious how guest certs work with Wyndham when either an LLC or family trust is involved.

Or is the strategy to add the primary family members and the trust/LLC to the acct?
 

ljc50

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Well I'm trying to figure all of this out.
Right now my parents' account is in their trust. Therefore, only they are considered owners and every time any other family members travel we have to be listed as guests with a certificate.

What I hope is if the primary family members are the members of the LLC, then we all will be considered owners therefore would not need certificates. Still trying to get answers to these questions.
 

paxsarah

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It looks like @Pathways holds their Wyndham account in an LLC: link1 link2
Also longwell/avislo has or does: link3 link4 (though he hasn't been around in a while, unless I missed a new alias, but I think we would have noticed)
 

Sandi Bo

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Well I'm trying to figure all of this out.
Right now my parents' account is in their trust. Therefore, only they are considered owners and every time any other family members travel we have to be listed as guests with a certificate.

What I hope is if the primary family members are the members of the LLC, then we all will be considered owners therefore would not need certificates. Still trying to get answers to these questions.
Although my situation my be similar to yours, I'm not much help here. I was looking at setting up an LLC. I chickened out and left things as they were originally set up (in my Dad's trust). As I understood things, even though I could have transferred to family via Ovations - all existing reservations would be cancelled. I don't see myself ever being in the situation where I won't have anything reserved (and have to sit on my hands and wait for Wyndham to do something). Moving or retitling anythings scares me. I feel with Wyndham you make your best guess at what is going to happen, and when you act you find out what really happens (and it's not consistent). So I got wet feet and I left things as is.

My workaround to paying all those guest fees when we are the ones using the points, is I bought a small resale contract and added all the siblings (and my Dad so it links to his account). Now all of us show as owners on the account. Later I did the same adding nieces and nephews (that were interested - I have one nephew who especially likes to use the points and I suspect will be the one who takes over this crazy mess some day).

When I was looking into an LLC, if I remember correctly, you list 2 owners (of the LLC) and only those 2 owners will be listed on the account. So back to adding a small resale contract with all the family members, lol.

Tough to find the answers to all this, would love to hear how it all pans out for you. Best of luck to you.
 

ljc50

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Thank you so much for sharing. Your name did come up from others. I’m curious, how do you manage payment of maintenance fees (do all contribute)? Does everyone book their own stuff and there is no concern about equity? Or does one person handle all the day to day stuff?
 

Jan M.

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Thank you so much for sharing. Your name did come up from others. I’m curious, how do you manage payment of maintenance fees (do all contribute)? Does everyone book their own stuff and there is no concern about equity? Or does one person handle all the day to day stuff?

LDBEH joked about not telling his sister that he splits any profits left from renting after the maintenance fees are paid between himself and his mom. This is actually equitable and not unfair because his parents paid for what they have and he does the work of doing the rentals. Something for you to keep In mind.

Some family groups sharing an account have one person who manages everything. The rental reservations and everyone else's reservations. Since you can set up a login ID for everyone who is on the account you can opt to have a everyone managing their own share of the points and reservations.

If you were to do it the second way here comes the big IF. If you are confident that your siblings and possibly their spouses or adult children won't screw up and cancel a rental reservation or another family member's reservation or use significantly more points than their agreed upon share. Your siblings are likely to let their spouses and adult children have access to their login to play around with looking at the different resorts, the availability and possibly managing their own reservations. For some families that works just fine with no problems. You know your family. Is there a sibling, their spouse or an adult child that you can almost count on messing things up? Do you have a situation like this in your family? You know as sure as the sun will rise tomorrow that no matter what your sibling promises that their spouse or adult child won't be allowed access to your siblings login that they will give in to that person? That said person can almost be guaranteed to mess up given their history and it has caused problems in the family in the past? When there have been problems in the past do your parents have a history of intervening on behalf of a sibling or their family?

If you aren't completely confident that letting everyone have access to the account will go well then I strongly urge to to start out the way you mean to continue. It may be difficult to get your parents and other siblings to agree on not letting one sibling have access to the account after problems arise. It would be far better to have an honest discussion about this with your parents beforehand to avoid potential problems. Especially if you all live within a close enough distance that you see each other more than once or twice a year.

When it comes to familes and renting too the points protection that allows you to cancel a reservation clear up until 11:59pm ET on the day of check in can be your friend and money well spent. 200,000 points for a reservation and under is $49. 201,000-300,000 is $69. 301,000 and up is $99. It can be added at any time as long as there are 15 days before the check in date. Most of us dislike giving Wyndham more of our money. However when you have reservations that are a lot of points and therefore a lot of money in maintenance fees, the points protection can be well worth having.

There are several ways you could do sharing the maintenance fees. I believe you can have the monthly maintenance fee payments shared to more than one credit card. If you are doing enough renting to cover a good part of the maintenance fees it may be easier to just have you or your parents pay them and do a year end accounting. Or you could have each sibling pay $1000-$2000 as soon as they can at the start of the use year towards their share with an as needed catch up payment or possibly a refund. You should keep track how many points each sibling and their family used and also how many points were used for rentals. I would have each sibling also keep track of how many points they used. Make sure your numbers agree. It really helps that you're platinum so don't have to worry about losing points at the end of the use year because you have until the last day of the use year to move forward any points that are left.

Hopefully someone else will post how their family does it if they don't share the points and maintenance fees equally. In some families they may not divide the points and maintenance fees equally because there may be one family member whose finances aren't as good as the others. That family may only be able to afford the maintenance fees on 200k points so that is all they pay for and get to use. In that situation oftentimes the parents or a soft touch sibling will say they can use some of our points or share our unit. Over time they become used to being subsidized and other family members become resentful. Recognizing potential pitfalls and well thought out planning can save a lot of problems later in any family.

Your questions indicate that you are definitely smart enough to know that it is always better for all parties have a clear understanding of how things will work and an agreed upon plan right from the start. If it were me I would write it up and have everyone sign it. Possibly even getting the signatures notarized. Even when families get along just fine having an agreed upon plan is still the smart thing to do because eventually your children will marry and have kids of their own, there can be divorces and second marriages after the death of a spouse. I don't know if a trust would spell these things out or even if that will be the best way for you to go. You may decide to just add the additional names to the deeds for now.
 
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Sandi Bo

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Thank you so much for sharing. Your name did come up from others. I’m curious, how do you manage payment of maintenance fees (do all contribute)? Does everyone book their own stuff and there is no concern about equity? Or does one person handle all the day to day stuff?
Lots of good thoughts from Jan. Yes, the more you spell it all out, the better.

For us, the 1st thing was recognizing that the true value in the account was keeping it together. Splitting 1.4M points 5 ways = nothing worth hanging onto. It was 'are you in or not'. If not - they got nothing. All wanted in (one almost didn't, probably the smartest of us 5, btw, lol). Down the road, the same offer was made to my nieces and nephews (my father's grandchildren) with about 75% participation. I realize the pyramid effect of this - and that when I'm ready to quit someone has to take it over or we dissolve. I have one nephew I suspect may do what I do, I'm not sure. At that time, those on the account will need to decide again, if they are in or not (and trust him to do what I do).

I manage the account, I pay the maintenance fees. Anyone that uses the points, pays me. There were times my father wanted to pay for a family reunion or times when siblings have done me a favor or they take my Mom somewhere or I chose not to charge my Dad. I decide if I want to 'comp' a vacation for them. I have a sister who pays for her daughter sometimes (her choice, her responsibility). Otherwise they pay for the points used by paying the maintenance fees for what they used (no fancy calculations, our number of points divided by the total I pay to Wyndham). All understand that it is only because I manage it that we still have it (barely rescued from a post card company that my father sold it to to take it off his hands so it would not a burden to his children).

I have not had to be concerned with usage. It's all over the map, many don't use it at all. People pay as they go. My sister is at Bentley Brook right now, she'll send a check within a few days. One brother-in-law pays the day he books something (or as soon as he knows it's final). Everyone is beyond good at paying for their usage. I realize how lucky I am that this is not at all an issue.

Everyone that's on the account, that wants one, has their own login. Yes, that's risky. Everyone is acutely aware of the ramifications. They can see all reservations. They could cancel something. The nice thing about the new system, is you have the audit trail and you can tell who booked a reservation (and call to find out who cancelled one). Years back, on the old system, when we only had one login (and a 2nd person really messed you up if you both logged in at the same time), only I had access. I did not share it whatsoever. But with voyager and multiple logins, it's been nice to let others look for reservations. About a year ago, I started saying.. sure go ahead and book it. It could easily get out of hand, except for the agreement we have that I always know what is going on.

It is exceptionally nice to be platinum and be able to point deposit excess points the end of December. You can point deposit any time in the last quarter, since you can borrow them back if you need them for new reservations. So you could do that as soon as you know you don't have any reservations the remainder of the year, that you won't be cancelling. Paranoid me, I do wait til after December 16th, if I have reservations in December so I'm only paying one time to deposit my excess points.

I have purchased several million extra points (resale) that augment the renting I do. Original plan was to cover maintenance and allow family usage. I had more rental business than points and thus expanded. 100% of anything added is my points. Having so many points also makes it easier to not be concerned about how much each person is using. If over usage by one becomes an issue, I'll have to address it (there is a soft number - this is your share of points, followed up by - if it becomes a concern, we'll talk). I know plenty of ways to get more points if I need to, I just haven't had to worry about it.

I think you have to have one person manage it. Even if we were sharing the maintenance fees, I would want to be the one that pays Wyndham and have people pay me. I would want the visibility - because the consequences of something not getting paid are too high and lord would that get messy.

My exit plan is in my head (shame on me). I need to get it documented. Ovations, last I checked, would take every contract we have. However, I think they are worth more on the resale market (not much, but better than giving it away). The easy exit plan is Ovations. But I also need to make sure any current reservations aren't cancelled, and ideally we'd get some return on the initial investment (by selling the contracts on the resale market). My thoughts are to have an agreement with someone that can handle reselling the contracts - I have more homework to do on that.

I'll add, too, everyone is highly aware that things with Wyndham can change at any time. They have several times already. We are prepared to divest if there comes a time it's not worth hanging onto. So far, sure am glad to have it.

Interested if anyone has other thoughts or ways they do things. Best of luck to you ljc50, from all your questions, etc, I'm sure you'll do just fine :)
 

ljc50

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Sandi Bo thank you so much for taking the time to share all of this wonderful valuable information. I really appreciate everyone’s expertise and shared knowledge. It is helping me to organize my ideas. My brothers and I understand it is better to get it right from the beginning if possible!

LJC50
 

SNA27

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It seems to me that you already have a perfect legal vehicle in the form of a family trust. LLCs make sense for a profit-making company and it seems like overkill for managing TS points, imo.
LLCs require additional yearly paperwork and in California $800 minimum tax per year. Other states may have different minimums.
If you are planning this LLC in New York, that's like inviting yourself into the snakepit.

If I were you, I would look it a perpetual trust into which your parent's trust can pass on the Timeshare holdings instead of divvying it up among the three heirs.
Dividing the holdings may cause the loss of VIP status and benefits thereof. Wyndham Salespeople have said that I can divide my VIPP between my 2 sons and each will receive VIPP status. But I haven't confirmed this with ownercare. I wish this were true, it would solve your problems easily.

Here are some relevant links.
 
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