Record timeshare under Revocable Living Trust?

Hubby and I recently had a revocable living trust set up and we placed the deed to our home, bank accounts, etc. into it. I don't know if that's the correct legal wording of it but I'm sure you know what I mean.

I am purchasing our first timeshare since the trust was created. (We own many that were purchased prior). It is a cheap Florida "fixed" deeded resale week (that has already been converted to RCI Points) won on Ebay. When I begin the payment and purchase process, would it be a good idea to have the deed recorded as the Smith Jones revocable living trust with A. Smith and B. Jones as trustees?

Thanks for your advice, Jennie

Trust Ownership

Jennie said:

Hubby and I recently had a revocable living trust set up and we placed the deed to our home, bank accounts, etc. into it. I don't know if that's the correct legal wording of it but I'm sure you know what I mean.

I am purchasing our first timeshare since the trust was created. (We own many that were purchased prior). It is a cheap Florida "fixed" deeded resale week (that has already been converted to RCI Points) won on Ebay. When I begin the payment and purchase process, would it be a good idea to have the deed recorded as the Smith Jones revocable living trust with A. Smith and B. Jones as trustees?

Thanks for your advice, Jennie

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Hello, Jennie. I assume that you and your husband are residents of a state other than Florida. One of the actual benefits of utilizing a revocable trust in your estate plan is avoiding a formal administration of the estate of the survivor of your and your husband in Florida.If it were me, I would make sure that the deed you will recieve has been prepared by a Florida attorney well versed with the issues involved in deeding real estate into a revocable trust. FWIW, an interest in real estate is traditionally deeded to the trustee of the trust, not the trust. In some states, the grantee of such a deed would read "to Sally Smith, Trustee under a revocable trust agreement(or simply "UTA") dated January 4, 2007."

Best advise is to make sure a FL attorney familiar with the funding of revocable trusts prepares or reviews your deed.

Jennie said:

Hubby and I recently had a revocable living trust set up and we placed the deed to our home, bank accounts, etc. into it. I don't know if that's the correct legal wording of it but I'm sure you know what I mean.

I am purchasing our first timeshare since the trust was created. (We own many that were purchased prior). It is a cheap Florida "fixed" deeded resale week (that has already been converted to RCI Points) won on Ebay. When I begin the payment and purchase process, would it be a good idea to have the deed recorded as the Smith Jones revocable living trust with A. Smith and B. Jones as trustees?

Thanks for your advice, Jennie

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Yes, you definately want to convey the deed into the trust. Setting up a trust does nothing, in and of itself. It's putting your possessions in the trust that provides the benefits. Any/all of your timeshares and other real property should be in the trust. I imagine whoever is doing the closing has probably done this many times, confirm with them.

Kildahl said:

Hello, Jennie. I assume that you and your husband are residents of a state other than Florida. One of the actual benefits of utilizing a revocable trust in your estate plan is avoiding a formal administration of the estate of the survivor of your and your husband in Florida.If it were me, I would make sure that the deed you will recieve has been prepared by a Florida attorney well versed with the issues involved in deeding real estate into a revocable trust. FWIW, an interest in real estate is traditionally deeded to the trustee of the trust, not the trust. In some states, the grantee of such a deed would read "to Sally Smith, Trustee under a revocable trust agreement(or simply "UTA") dated January 4, 2007."

Best advise is to make sure a FL attorney familiar with the funding of revocable trusts prepares or reviews your deed.

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Thank you so much for the quick response and great information. The timeshare we are acquiring is in Florida. We are residents of NY. A big coincidence is that our trust was prepared by a well known law firm in Florida that specializes in trusts and just happens to be located in the same city and county as our soon-to-be timeshare. That should make things easier, if not a bit more expensive.

In case anyone is wondering, we used the Florida law firm because it cost thousands of dollars less than the fees being charged in NY. And when we compared our documents with those prepared in NY for friends with very similar assets and life situation, they were almost identical. Except that we paid over 80% less.

Perhaps people planning a vacation in Florida will want to look into this.

Jennie,

I wonder if you would mind emailing me the law firm's name and contact info along with the approximate cost?

I've been meaning to do this for a while. Suddenly my DH is in a panic because our entire family of six is going to be on one airplane flying to the British Isles in June and he's fretting over what will happen with our affairs if the plane goes kerplunk into the ocean. I'm sure it's too late to get this in place, but maybe just working on it will make him feel better.

Sheila

Jennie said:

..... We are residents of NY. A big coincidence is that our trust was prepared by a well known law firm in Florida that specializes in trusts and just happens to be located in the same city and county as our soon-to-be timeshare. That should make things easier, if not a bit more expensive.

In case anyone is wondering, we used the Florida law firm because it cost thousands of dollars less than the fees being charged in NY. And when we compared our documents with those prepared in NY for friends with very similar assets and life situation, they were almost identical. Except that we paid over 80% less.

Perhaps people planning a vacation in Florida will want to look into this.

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Attorneys are not allowed to practice in jurisdictions in which they are not licensed. Perhaps this Florida firm has attorneys on it's staff that are also authorized to practice law in New York and knowledgeable about its procedures. I know a number of large FL law firms that have NY attorneys in their firms and may even have an office in New York or vice versa. {As you know, FL has no state income tax and many retirees want to be treated for income tax purposes as FL residents even though they spend most of their time out of Florida } I am not sure you utilized such a firm as the disparity in charges would most likely would not have been as significant as you report. BTW, Florida aggresively attacks non- Florida attorneys for the unauthorized practice of law in their state, even if the attorney has never set foot there.

Frankly, most attorneys work hard to stay competent in their own jurisdiction, let alone master the laws, customs and procedures of another. Some states are plagued by what may be described "trust mills". They often pop up is states where retirees and snowbirds are know to accumulate (TX, AZ and FL). Anyone with a computer can create a pretty slick looking document these days. Be careful who you choose. Check the Martindale Hubbell index of attorneys which rates them and tells you a bit about their background. You can find it at most public libraries. I believe a limited version is available on the web.

If you plan on remaining NY residents, I would suggest you have your trusts and pour over wills reviewed by someone in your area in NY. Also, because an estate plan is appropriate for your friends circumstances, doesn't mean it "fits" yours. Trusts are much more that simply probate avoidance devises. There are often other significant issues, such as transfer and income taxes.

We have done a good number of re-deedings into revocable family trusts. The truth is, it's just a very minor wording change in the Grantee section of the first paragraph of the typical deed.

For a sale from a RFT, one uses a "Trust Deed". The wording of the Grantor section, the signature statements, and the notarization blocks change in that case from your standard Warranty Deed. Again, fairly minor.

While establishing a trust and determining compliance requirements is a complex thing that certainly demands the practice of law, trust deedings are common and no more complex than any other deed of sale.

John Faeth

PS. Different states may use different names for this type of trust. However the behavior and regulation of trusts is almost 100% defined by the Internal Revenue Service Codes. That makes state to state differences fairly minor, and those do not affect the wording of deeds. The main point is the deed names the trust but makes no definitions of it.

Considering the decline in TS prices on the resale market & and escalation in MF, etc. I wonder if it's universally a good idea to put a TS into your trust. I can envision a scenario wherein you wouldn't want your trust to be liable.

Am I being too anxious about this?

Yes, you are being for too concerned.

One of the primary reasons for putting a timeshare into a trust as discussed in this thread is to avoid the expense and possible publicity associated with probate. That might not be a big deal in the decedent's home state, assuming there will be other estate assets in probate, but imagine having to also go through probate in every state where the decedent owned a timeshare. That can be a nightmare - for both expense and the time commitment to get it done. Ownership of timeshares by the trust avoids that because there is no change of ownership at death.

If it's not in a trust, the estate or the heirs would have the responsibility for the annual fees. An heir can disclaim an inheritance of a timeshare, but that would still leave the responsibility for payment of fees with the executor or other person responsible for the estate until the timeshare could be sold.

This does not pass the smell test

Good posts above. I am in the legal smell business. Unless the law firm you used for the trust is licensed both in Florida and in NY you could have serious problems. Anyone can set up a trust. Assets can flow into it and out of it. Your timeshare can flow in there very easily. The problem is what happens when you kick the bucket. Since you are a resident of NY (and are evidently domiciled there) NY laws apply. They may or may not recognize the trust and more likely than not will send your estate into probate; something you wanted to prevent in the first place. Courts love the "P" word if there are any problems (especially Eastern Courts). Caveat: I am a part-time resident of Florida and have talked to many who have found themselves in the same situation as you. Have you trust reviewed by a NY attorney, specializing in trusts and wills. Since the trust is already prepared, the fees to look it over will be very reasonable. The State Bar of NY can refer you to 3 firms specailizing in that area for a small nominal fee.

So if I get this right, when we establish our trust, since we own timeshares in Florida, South Carolina, Virginia, North Carolina and New Mexico, we need to have attorneys from each of those states review everything.

Our main reason for establishing the trust is to protect VIP benefits that we have as Fairfield owners.

Lisa

Hi Lisa,

You should go to an experienced trust attorney in your home state and follow their professional advice. Multi-state assets are a common thing with high wealth individuals, the exact audience of who most benefits from a trust.

The advice here is free and guaranteed to be worth at least that much

John

sfwilshire said:

I've been meaning to do this for a while. Suddenly my DH is in a panic because our entire family of six is going to be on one airplane flying to the British Isles in June and he's fretting over what will happen with our affairs if the plane goes kerplunk into the ocean.

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That is basically the ONLY scenario in which I would NOT be too concerned about estate planning!

Dave M said:

If it's not in a trust, the estate or the heirs would have the responsibility for the annual fees. An heir can disclaim an inheritance of a timeshare, but that would still leave the responsibility for payment of fees with the executor or other person responsible for the estate until the timeshare could be sold.

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I don't know if I have the problem solved or not, but I intend to die broke with a lot of unsecured debt.

GEORGE

The problem is that we are not high wealth individuals. LOL. Anyway, I completely understand what the advice I receive online is worth. But, I do find online advice valuable in that it helps me have a background before I talk to an expert so that I can get a jist if that expert knows what they are talking about. ALthough, legal stuff to me is like looking under the hood of my car with a mechanic.

My experience with attorneys has also been that the fees will be much less the more you have figured out before you see them, with them just making sure that you can do what you want to do. If you just walk in and expect them to figure out what you want to do and then set it up completely for you...well, they bill by the hour.......

Lisa

johnmfaeth said:

Hi Lisa,

You should go to an experienced trust attorney in your home state and follow their professional advice. Multi-state assets are a common thing with high wealth individuals, the exact audience of who most benefits from a trust.

The advice here is free and guaranteed to be worth at least that much

John

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The Florida firm we used in 2003 to prepare the trust assured us that their attorney was licensed to practise law in Florida and New York. I checked on-line at the time with the NYS Bar Association and did indeed find him listed as possessing a NYS license. The firm said that about 50% of their clients are New York residents, either full-time or part term.

After reading the above posts, I re-checked and I now find him listed as having his license SUSPENDED until October 2008. He is/was a member of a large well known law firm in midtown Manhattan (very high rent district). Should I be concerned???

If the trust documents we have do not conform 100%with NY law, would we have to start all over from scratch? Or would a NY attorney be able to make changes to the original trust? Since we have already placed so many assets into it, it would be very time-consuming to have to do everything all over.

Hopefully, changes, if any, would be minor. Even if they are significant, the existing agreement could perhaps be amended or restated, avoiding the re-transfer of assets that have already been transfered to the trustee of the trust.
If the trust is going to be administered in New York, wouldn't it make sense to make sure it is "user friendly" in New York?

Ah, the old smell test worked

Jennie said:

...After reading the above posts, I re-checked and I now find him listed as having his license SUSPENDED until October 2008. He is/was a member of a large well known law firm in midtown Manhattan (very high rent district). Should I be concerned???

If the trust documents we have do not conform 100%with NY law, would we have to start all over from scratch? Or would a NY attorney be able to make changes to the original trust? Since we have already placed so many assets into it, it would be very time-consuming to have to do everything all over.

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Jennie: Trust attorneys who get suspended usually have done something stupid to their clients; like forgetting them and charging them fees. Not knowing anything other than what is reported here, I doubt if you have any serious problems. The trust res as we call it is probably just fine. In fact, I would submit that everything is ok. Revocable trusts are changed all the time.

What if someone draws up a deed, has it notarized, then upon his death the grantee files the deed with the county?

Harry,

Failure to pay your annual membership dues to the Bar Association is also grounds for suspension. It's definitely worth looking into "why?" IMHO.

Mike,

The issue is, upon the death of the individual, the executed document is no longer valid. The recoding date which is just after the date of death is a HUGE red flag and begs title questions, neither is good.

John

Revocable Living Trust

Once you have a Revocable Living Trust prepared By an Attorney
Should you use the basic information later to prepare a new one using
computer software from a company like Quicken® (WillMaker Plus)
Or should you have your attorney add an amendment to the originial.

Johnmfaeth-

I don't know who told you that an executed deed is no longer valid if someone dies before it's recorded, but I would have a talk with your lawyer.

It is my understanding that you never have to record your ownership of real estate. In some states, however, you must record any CONTRACTS having to do with real estate. Also lenders will not lend money to persons that are not recorded as the owner, in general.

But recording a document only makes a public announcement, it does not make or break ownership. Anyone can point at anything and say it seems fishy, but if you have a deed and you're paying the taxes, you are the owner, regardless of whether or not you inform the world, ever.

Hi My Dogs,

I was referring in that April post to a deed to a living trust which was in the deceased's name.

If the deed was for less that the fair market value, the IRS gift taxes rules would kick in which may abate other tax savings.

John

Recording is optional, but failing to file a transfer tax return and pay monies owed is a crime.

Also, no timeshare developer will accept an unrecorded deed as proof of transfer, they demand recording to protect themselves.