Transfer VIP Deed to Family LLC?

[Sandi Bo]

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.

Family Trust vs. LLC

Limited liability companies (LLCs) and family trusts are two different legal creations that form under state law. Although they typically have different purposes, families can use either to manage and protect assets.

info.legalzoom.com

LLC Biennial Report and Tax Filing Requirements in New York

If you have a New York LLC, you must file a biennial report and pay an annual fee. Learn what other state business, employer, and sales taxes your LLC might be respo

www.nolo.com

What Is a Perpetual Trust?

A perpetual trust is a type of financial trust that passes through generations so that the children of the original beneficiary...

www.wisegeek.com

I do not believe it is true that you can divvy up a VIPP status account and have it retain the VIPP status (unless standalone it still qualifies). Over and over my Dad was told lies about that kind of stuff. The last person I would ask about inheritance type issues is a Wyndham salesperson.

I agree, I think a perpetual trust is the way to go, if your family is able to agree on management and use of it.

 

[ljc50]

Thank you. We will look into it. Most likely this would be planned in Iowa, not New York, since everyone but me is in Iowa. Thank you for the relevant links.

I do not believe it is true that you can divvy up a VIPP status account and have it retain the VIPP status (unless standalone it still qualifies). Over and over my Dad was told lies about that kind of stuff. The last person I would ask about inheritance type issues is a Wyndham salesperson.

I agree, I think a perpetual trust is the way to go, if your family is able to agree on management and use of it.

If we did decide to go with a perpetual trust and Because my parents currently have the account in their own trust to be passed to us upon the execution of their own trusts, does anyone know if they would be able to “gift” it to us early, placing it in our names and still retain VIPP as long as we keep it together? Or would we still need to create the new perpetual trust with everyone’s names, including my parents and have them move it?

 

[ljc50]

Thank you. We will look into it. Most likely this would be planned in Iowa, not New York, since everyone but me is in Iowa. Thank you for the relevant links.


If we did decide to go with a perpetual trust and Because my parents currently have the account in their own trust to be passed to us upon the execution of their own trusts, does anyone know if they would be able to “gift” it to us early, placing it in our names and still retain VIPP as long as we keep it together? Or would we still need to create the new perpetual trust with everyone’s names, including my parents and have them move it?

Also, what department in Wyndham does one go to in order to get correct answers? The legal department?

 

[SNA27]

Since the TS has no appreciable resale value, the gift would have negligible tax consequences. It's actually a good idea to move the TS holdings into a separate perpetual trust when your parents are still alive. Maybe they can even endow that perpetual trust with enough funds to be self-sustaining for quite a while.
I am actually looking to do something like this so some 'daft' progeny in the future with an 'easy come, easy go' mentality doesn't let go of my considerable investment. I haven't done the math yet to come up with a number and an investment vehicle that would kick off enough income to offset the annual dues.

 

[SNA27]

Also, what department in Wyndham does one go to in order to get correct answers? The legal department?

Call the main number from CONTACT US link at the top. That should lead you to Owner care. Enjoy the many transfers and free music!

 

[ljc50]

Thank you. Thank you. I feel like I’m earning my law degree in this process. Wouldn’t mind, but difficult to do when holding a full time job, being a parent and have limited spare time.! I appreciate all the education and help immensely.

 

[Pathways]

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.

Another reason for CA, NY, and add IL to those states to avoid at all costs except for vacation. IN has a $95 fee to form the LLC (on-line -takes about 30 minutes), and a 3 page on-line bi-annual report that costs $50.

No taxes at any time for an llc where you are just holding the timeshare property.

 

[Sandi Bo]

Thank you. We will look into it. Most likely this would be planned in Iowa, not New York, since everyone but me is in Iowa. Thank you for the relevant links.


If we did decide to go with a perpetual trust and Because my parents currently have the account in their own trust to be passed to us upon the execution of their own trusts, does anyone know if they would be able to “gift” it to us early, placing it in our names and still retain VIPP as long as we keep it together? Or would we still need to create the new perpetual trust with everyone’s names, including my parents and have them move it?

I've been able to skate on this thus far...sorry, again not much help. My Dad's trust is perpetual and I am the successor trustee. So I don't have to do anything for awhile. And thus the resale contracts with all additional owners has come in handy and I've yet needed to change anything. I imagine your latter suggestion is the proper way to go in normal circumstances (new perpetual trust, etc) but as I've said I cringe at moving things around.

As far as who to talk to at Wyndham, you might also ask the title department. I'm not sure if you had a family trust, if they would recognize more than 2 owners (similar to the LLC rule). But I don't know that, just guessing. How to get everyone listed so you don't need to use guest certificates may be challenging (I could be wrong) so back to a small resale contract to facilitate that. Ovations might help. But again, I always feel like you do your best research and then find out how things really work when you actually do something. Calling the main number may likely get you an overly helpful VC that guesses at stuff (they sometimes do that) or maybe they will get you where you need to be (but I doubt it). I'd call Title and/or Ovations.

 

[SNA27]

Thank you. Thank you. I feel like I’m earning my law degree in this process. Wouldn’t mind, but difficult to do when holding a full time job, being a parent and have limited spare time.! I appreciate all the education and help immensely.

BS in TS for sure! I have been on this site since Nov 27, 2019. I feel like I am learning at the rate of Khan! Wait till I get hold of Genesis! Haha!

Btw, I assume you're talking about a revocable trust. In which case they can take the Wyndham TS out of this trust.

I am in the process of learning about various kinds of trusts. So I would appreciate any input on that subject.

 

[Pathways]

I'm not sure if you had a family trust, if they would recognize more than 2 owners (similar to the LLC rule).

LLC used to be seven, not sure now. I have five

 

[ljc50]

Thank you. This is so difficult to sort out. I guess that is the way Wyndham wants it to be. Sad after all the hard earned money my parents put into this corporation that told them many stories! Eventually we will figure it all out if we keep working together.

 

[WVBaker]

Quick question.

How would this be different than an owner placing hie or her ownership into a separate LLC? I always assumed that resorts frowned on that.

 

[SNA27]

Quick question.

How would this be different than an owner placing hie or her ownership into a separate LLC? I always assumed that resorts frowned on that.

Resorts or Wyndham Corporate? Not much they can do about it. Trusts, LLCs are legal entities just like an individual. Why should they care who buys what they're selling? Why is it any different from Corporations buying Country Club or Golf Club memberships for their execs? Transferability is a nice feature/loophole that comes with LLC.
But I would be crazy to create a California LLC to own TS. So much pain for so little gain!

 

[WVBaker]

PLacing the ownership of a timeshare into an LLC does have it's benefits it seems. Number one being, protection of all personal assets. What if something happen to you and
you were unable to pay the maintenance fees for multiple timeshares or even one? What If the resort(s) were to file a lawsuit against you? At least if the ownership is under an LLC,
your home and personal assets would be protected. You have to ask yourself, what is having that protection worth?

In the state I live, it would cost $100.00 to form an LLC and yearly filing fees are $25.00.

The question to ask is, will the resort(s) allow the ownership to be transferred from an individual(s), to an LLC and the costs?

Also, does a ROFR come into play under such circumstances and if the resort(s) does refuse, what then?

 

[Sandi Bo]

PLacing the ownership of a timeshare into an LLC does have it's benefits it seems. Number one being, protection of all personal assets. What if something happen to you and
you were unable to pay the maintenance fees for multiple timeshares or even one? What If the resort(s) were to file a lawsuit against you? At least if the ownership is under an LLC,
your home and personal assets would be protected. You have to ask yourself, what is having that protection worth?

In the state I live, it would cost $100.00 to form an LLC and yearly filing fees are $25.00.

The question to ask is, will the resort(s) allow the ownership to be transferred from an individual(s), to an LLC and the costs?

Also, does a ROFR come into play under such circumstances and if the resort(s) does refuse, what then?

If I was starting fresh, I think I would choose to setup an LLC. I don't have the appetite to move things around, since what we've been able to make things work as they are currently set up. And always keeping in mind that things with Wyndham can change at any time

 

[ecwinch]

Sandi Bo... points out the problem with the LLC angle.... the possible loss of VIP benefits based on some revision of how they define developer purchased points.