May I put a DVC membership in a trust?

Many DVC owners consider placing their membership in a trust as part of estate planning strategies. Understanding how trusts interact with DVC ownership helps families make informed decisions about structuring their Disney Vacation Club contracts for current enjoyment and future transfer to heirs.

Yes, DVC Can Be Held in Trust

Disney Vacation Club memberships can be held in the name of a trust rather than individual owners. This ownership structure is common among members using trusts for estate planning purposes. DVC accepts trust ownership both for direct purchases and resale transactions, though specific documentation requirements apply.

When purchasing DVC through resale for trust ownership, the trust name and trustee information must be provided during the closing process. The deed will reflect the trust as the owner, with trustee(s) authorized to manage the membership and make reservations on behalf of the trust.

Benefits of Trust Ownership

Placing DVC in a trust provides several estate planning advantages. Primary among these is avoiding probate upon the owner's death. Assets held in properly structured trusts typically transfer to beneficiaries without court involvement, reducing delays, costs, and complexity during estate settlement.

Trust ownership also provides privacy, as trust assets generally don't appear in public probate records. Additionally, trusts can specify exactly how DVC membership should be managed and distributed, including provisions for multiple beneficiaries, use restrictions, and eventual sale instructions.

Additional Benefits

• Control and Flexibility: Trusts allow the grantor to set specific terms regarding the use and management of the DVC membership, ensuring that future generations adhere to their wishes.
• Continuity: A trust can ensure that DVC memberships remain within the family, providing continuity and preserving family traditions of visiting Disney properties.

Types of Trusts for DVC

Various trust types can hold DVC ownership depending on estate planning objectives. Revocable living trusts are most common, allowing owners to maintain full control during their lifetime while providing probate avoidance upon death. The grantor typically serves as initial trustee with full authority over the membership.

Irrevocable trusts may be appropriate for certain estate tax planning strategies, though they involve relinquishing control over the asset. Family trusts, charitable trusts, and other specialized structures may also hold DVC ownership based on specific planning needs. Consult estate planning attorneys for guidance on appropriate trust structures.

Documentation Requirements

Purchasing or transferring DVC into a trust requires specific documentation. Title companies typically need the trust's full legal name, date established, and trustee names and addresses. Many require certification documents verifying trust validity, trustee authority, and relevant provisions.

The trust must have legal capacity to hold real property, as DVC memberships are deeded real estate interests. Most standard revocable living trusts include appropriate real property holding provisions, but specialized trusts may need review to confirm authority.

Transferring Existing DVC to a Trust

If you already own DVC individually, you can transfer ownership into a trust you establish. This process involves preparing a new deed transferring ownership from yourself to the trust, then recording the deed with Orange County, Florida, where all DVC properties are deeded.

Transfer procedures require proper documentation and may involve administrative fees. Some owners handle transfers through attorneys specializing in estate planning or real estate, while others use title company services similar to those used for purchase transactions.

Important Considerations

Trust ownership doesn't change how DVC membership works day-to-day. The designated trustee(s) can make reservations, manage points, and enjoy all normal membership privileges. Annual dues statements and member communications typically address the trustee at the trust's address.

However, trust ownership may affect certain Disney transactions. Financing options, certain membership modifications, and some administrative processes may require additional documentation when trusts are involved. These requirements are typically manageable but add complexity compared to individual ownership.

Potential Challenges

• Complexity: Trusts can introduce additional complexity in managing DVC memberships, requiring trustees to be well-versed in both trust management and DVC policies.
• Cost: Setting up and maintaining a trust can involve legal fees and administrative costs, which should be considered in estate planning.

Selling Trust-Owned DVC

When selling DVC held in trust, the trustee signs sale documents on behalf of the trust. Buyers purchase from the trust rather than individuals, which is a normal resale transaction structure. Title companies handling DVC transactions are familiar with trust-owned properties and understand necessary documentation.

Sellers should have trust documentation readily available when listing properties. This includes trust certificates and any amendments affecting trustee authority. Having documentation prepared expedites transactions when buyer offers are accepted.

Estate Planning Integration

DVC trust ownership should coordinate with broader estate plans. Your trust documents should address DVC specifically, including instructions for ongoing ownership, eventual beneficiary distribution, and whether the membership should be sold or retained. Succession trustee provisions ensure continued management if primary trustees become unable to serve.

Consider how DVC fits within overall estate distribution plans. Annual dues obligations continue regardless of ownership structure, so beneficiaries inheriting DVC should understand and accept ongoing financial responsibilities.

Professional Guidance Recommended

Estate planning decisions, including trust structuring for DVC ownership, benefit from professional legal and financial guidance. Estate planning attorneys can recommend appropriate trust structures based on your specific circumstances, family situation, and planning objectives. The relatively modest cost of professional planning ensures your DVC membership passes according to your wishes.

DVC Sales can accommodate trust purchases and provide guidance on documentation requirements during transactions. Contact us to discuss purchasing DVC for trust ownership or with questions about the resale process involving trust structures.