May I put a DVC membership in a trust?

Putting Your DVC Membership in a Trust: Steps and What to Know

If you're wondering whether you can put a DVC membership in a trust, the answer is yes. Many members choose to title their Disney Vacation Club membership in a trust for estate planning or asset protection purposes, and Disney fully supports this option when you follow the correct process. We've helped hundreds of families through this process, and it can offer valuable flexibility for long-term planning.

Benefits of Titling Your DVC Membership in a Trust

Placing your DVC membership in a trust offers several practical advantages. Most importantly, it allows your membership to be managed according to your wishes if you become incapacitated or pass away. This can streamline the transfer of ownership to heirs while avoiding potential probate delays and complications.

A trust can also provide asset protection benefits, potentially shielding your membership from certain legal claims or creditors depending on your state's laws. The specific benefits will vary based on your situation and the type of trust you establish, so you'll want to consult with an estate planning attorney to understand how this applies to your circumstances.

Before Signing Your Purchase Agreement

If you haven't signed your DVC purchase agreement yet, including your trust is straightforward. Log in to your DVC Sales profile, go to Section A, and click "Edit Preferences." Enter your trust's complete legal name, such as "The Johnson Family Revocable Living Trust dated March 15, 2023," along with all current trustees, then save your changes.

This step means your contract and deed will be generated correctly from the start, avoiding any complications later. The system will automatically incorporate your trust information into all the necessary documents. If you need assistance with this process, you can reference our Disney Vacation Club buying checklist for detailed guidance.

After Signing the Agreement but Before Closing

If you've already signed your purchase agreement but haven't closed yet, you can still update your ownership structure. Return to "Edit Preferences" in your profile to add your trust name and trustees. Our team will generate an addendum for the change, which both the title company and Disney must approve.

This process is typically straightforward and doesn't usually delay your closing. The key is making these changes before the deed gets recorded. If you have questions about updating your information or need clarification on contract details, you can browse our current listings to see how trust ownership appears in contracts, or contact our team directly.

After Closing

If your deed has already been recorded, transferring the membership into a trust requires a formal post-closing transfer. You'll need to work with your title agent to prepare and record a new deed transferring ownership from your individual name to your trust. This process involves additional fees and takes more time than making the change before closing.

While it's certainly possible to transfer your membership into a trust after closing, it's more efficient and cost-effective to handle this during the purchase process. The post-closing transfer fees can range from several hundred to over a thousand dollars, depending on your location and the complexity of the transfer.

Trust Titling Requirements and Best Practices

When setting up trust ownership for your DVC membership, attention to detail matters. Disney requires specific information to process trust ownership correctly, and any discrepancies can create delays or complications.

• Use your trust's complete legal name: Include the full name exactly as it appears in your trust document, including the date the trust was created.
• List all current trustees: Disney needs to know all individuals who have authority over the trust, not just the primary trustee.
• Provide trustee identification: Each trustee may need to provide identification and sign documents related to the membership.
• Keep trust documents current: If you make changes to your trust or trustees, notify Disney to update their records.

I'd suggest working with your estate planning attorney to verify all trust information is accurate before submitting it to Disney. Small errors in trust names or trustee information can cause significant delays in processing your membership.

Working with Disney Member Services

Disney's Member Services department handles all trust-related changes and questions. They're familiar with trust ownership and can guide you through their specific requirements. However, processing times can vary, especially during busy periods, so plan accordingly if you need changes completed by a specific date.

Member Services will typically require a copy of your trust document or trust certificate to verify the information you provide. They may also need additional documentation depending on your trust structure and state requirements. Having these documents ready can expedite the process.

Tax and Legal Considerations

Placing your DVC membership in a trust can have tax implications that vary depending on the type of trust and your state's laws. Some trusts are considered "disregarded entities" for tax purposes, meaning the tax treatment doesn't change from individual ownership. Others may have different tax consequences.

Your estate planning attorney can explain how trust ownership affects your specific tax situation and help you choose the right type of trust for your goals. They can also advise you on how the trust ownership interacts with your overall estate plan and other assets.

Understanding DVC Contract Terms

DVC memberships are deeded real estate interests with specific contract terms that continue regardless of how you hold title. Your use year, home resort priority, and contract expiration date remain the same whether you own individually or through a trust. The annual dues structure and point allocations also stay consistent.

However, trust ownership can affect how you pass the membership to heirs. Instead of going through probate, the membership transfers according to your trust terms. This can provide more privacy and potentially faster distribution to beneficiaries compared to traditional probate proceedings.

Resale Market Considerations

If you purchase your DVC membership on the resale market, trust ownership works the same way as with direct Disney purchases. The resale market includes many contracts already held in trusts, and buyers can establish trust ownership during the resale purchase process.

Keep in mind that resale purchases are subject to Disney's Right of First Refusal (ROFR), regardless of whether you're purchasing as an individual or trust. ROFR allows Disney to purchase the contract under the same terms as your offer, and this process applies equally to trust and individual ownership structures.

Resale contracts also come with certain restrictions compared to direct purchases, such as limited access to some Disney Collection resorts and cruise benefits. These restrictions apply to the contract itself, not the ownership structure, so trust ownership doesn't change these limitations.

Planning for the Future

When you structure your DVC ownership through a trust, consider how your vacation needs might change over time. DVC contracts run for decades, with expiration dates ranging from 2042 to 2077 depending on the resort. Your trust should be flexible enough to accommodate changing family circumstances and vacation patterns.

Some members establish trusts specifically to hold vacation assets, while others include their DVC membership in broader family trusts. The right approach depends on your overall estate planning strategy and family situation. Your attorney can help you determine which structure works best for your goals.

You might also want to consider how trust ownership affects your ability to sell your DVC membership in the future. Trust-owned memberships can be sold just like individually owned contracts, but the process may require additional documentation and trustee signatures.

Getting Professional Help

While the mechanics of putting your DVC membership in a trust are straightforward, the legal and tax implications can be complex. Working with an experienced estate planning attorney helps you make the right decisions for your situation and avoid potential problems down the road.

In our experience, members who take the time to properly structure their DVC ownership through trusts find it provides valuable peace of mind and flexibility. The key is planning ahead and working with qualified professionals who understand both estate planning and vacation ownership structures.

If you're considering purchasing a DVC membership and want to explore trust ownership, our team can walk you through the process and connect you with the resources you need. We've worked with many families to establish trust ownership from the beginning, and we can help make sure your purchase is structured correctly from day one.