Easier for estate to sell, or surviving owner?

[CarolynFH]

DH brought up the idea of adding our kids to our deeds. We’re not going to do it now (I don’t think it’s the right time for them or me) but he gave me a reason to do it that I haven’t heard before, so I thought I’d ask whether he’s right or not.

He thinks that if they want to sell it after we’re gone, it would be easier for them to sell if they were the owners as opposed to the estate selling it.

Anyone with experience or knowledge with this?

 

[bwvBound]

I would think that depends on how the estate is set up. While I do not have a DVC specific example, my parents had a Trust and two timeshares at the time of their deaths. Neither of the timeshare were in the trust. As Trustee and Executer, I was able to move one of the timeshares to a sibling who wanted that timeshare. The other was "unwanted" by all ... so our Trust atty notified the timeshare management that the owners of record were deceased and that the estate had rejected continued ownership of that specific property. Done.

Both the 'wanted' and 'unwanted' timeshare were easy to deal with.

 

[Dean]

DH brought up the idea of adding our kids to our deeds. We’re not going to do it now (I don’t think it’s the right time for them or me) but he gave me a reason to do it that I haven’t heard before, so I thought I’d ask whether he’s right or not.

He thinks that if they want to sell it after we’re gone, it would be easier for them to sell if they were the owners as opposed to the estate selling it.

Anyone with experience or knowledge with this?

There are advantages and disadvantages to them being added ahead of time. In part it depends on how it's held. If it's held with right of survivorship it'll pass directly, if it's held as tenants in common, it'll have to go through probate. All else being equal it'd be better to add them prior but things are never equal.

 

[CraigInPA]

Dean covered the titling issue well, but there's one more wrinkle.

In the event of bankruptcy of one party on a property held with right of survivorship, the property could be held hostage by the bankruptcy creditors and a sale or payment demanded of the other owners. Thus, consider carefully before putting others on your deed.

 

[CarolynFH]

Thanks, all, appreciate the comments. I guess the question I have is whether it's easier for the executor of an estate to sell a piece of property (e.g. DVC, if we do not add our kids to the deeds) or for surviving owners to sell it if they don't want it. Or is it a wash?

DH and I expect to enjoy our membership for many more years, and I had envisioned simply letting the kids inherit the contracts (we bought two 150-point contracts way back when so it would be easy to divide between the two kids when the time came), but DH wants to add them to the deeds sooner "to make it easier for them to sell if they don't want it."

 

[crisi]

I'd add them to the deed if that is your biggest concern....but....

I'd make sure that they are financially stable and you won't lose your DVC if one of them declares bankruptcy.
I'd make sure they are in marriages that are stable - and you won't lose your DVC in a divorce settlement.

So I'd probably wait until you have some reason to believe that they are going to inherit. Like, you don't expect to have many years left to enjoy your DVC membership because your health has deteriorated. Your chances of passing unexpectedly are rather slim if you are on the younger side....the chances one of multiple kids will go through a bankruptcy or messy divorce if they are still on the younger side are probably higher.

 

[CarolynFH]

I'd add them to the deed if that is your biggest concern....but....

I'd make sure that they are financially stable and you won't lose your DVC if one of them declares bankruptcy.
I'd make sure they are in marriages that are stable - and you won't lose your DVC in a divorce settlement.

So I'd probably wait until you have some reason to believe that they are going to inherit. Like, you don't expect to have many years left to enjoy your DVC membership because your health has deteriorated. Your chances of passing unexpectedly are rather slim if you are on the younger side....the chances one of multiple kids will go through a bankruptcy or messy divorce if they are still on the younger side are probably higher.

Yeah, that’s why I told DH that I’m not at all ready to add anyone to our deeds yet!

 

[Dean]

Thanks, all, appreciate the comments. I guess the question I have is whether it's easier for the executor of an estate to sell a piece of property (e.g. DVC, if we do not add our kids to the deeds) or for surviving owners to sell it if they don't want it. Or is it a wash?

DH and I expect to enjoy our membership for many more years, and I had envisioned simply letting the kids inherit the contracts (we bought two 150-point contracts way back when so it would be easy to divide between the two kids when the time came), but DH wants to add them to the deeds sooner "to make it easier for them to sell if they don't want it."

IF you add them to the deed with right of survivorship it bypasses the estate and goes straight to them. They give up the right to disclaim it and the executor loses control of the asset.

 

[CarolynFH]

IF you add them to the deed with right of survivorship it bypasses the estate and goes straight to them. They give up the right to disclaim it and the executor loses control of the asset.

Thanks, that makes sense. So if they did want to sell it, they could put it on the market immediately without waiting for the estate to be settled. We’ll remember that — but it will be quite some time before I’m ready to add them!

 

[Dean]

Thanks, that makes sense. So if they did want to sell it, they could put it on the market immediately without waiting for the estate to be settled. We’ll remember that — but it will be quite some time before I’m ready to add them!

Real estate with right of survivorship and any asset with a beneficiary (IRA, life insurance) bypasses probate and the estate taxes as long as the beneficiary isn't a trust. At least as I understand it.