Posted by Rich-CA on February 12, 2008 at 10:06:04:
Change of beneficiary only conceals the change since the documents are not recorded, but since the beneficiary is the owner, it still brings the DOS into play.
Fractional Ownership - Posted by Josh
Posted by Josh on February 11, 2008 at 18:47:20:
Hi, first post, i did as much digging in the archives as i could but if i missed it, sorry.
My father in law has a vacation home worth about 500k, 350k is financed, deed in his name, in California. We would like to, if possible, transfer the property into a land trust, then sell 10 shares in the property for 65k each and finance 90% of it and make those purchasing parties beneficiaries.
Has anyone tackled this so it can be replicated?
Will this trigger a DOS clause?
Does the county assessor have to be notified?
Does anyone know of a great RE attorny in the southern california area who does not talk down to you?
Thank you.
A number of legal issues - Posted by John Merchant
Posted by John Merchant on February 14, 2008 at 10:02:25:
This could be a law school exam because of the number of legal issues it raises.
Would this be a securities offering?
As such would a sec. registration be required and if so, how, where, what jurisdiction?
Is it possible all shares/units might be sold to “insiders” so as to avoid sec. registration?
Does CA law allow such a sale via trust or another entity so as to let it avoid taxes on sale? (tax assessor’s aren’t big on allowing such deals to go around their coffers).
If 10 legal buyers could be found, should there be some kind of entity (LLP?) formed with time share structure so as to set up a systematic management of the property, TS members’ rights, etc.?
And, as you’ve identified, there’s an issue about possible triggering of DOS clause.
I’m not saying this isn’t a good idea and it’s likely been done in a lot of places on a number of bigger and nicer vacation properties.
To find the right lawyer or law firm I’d look around that area for other existing TS properties and then see what they did, who they used, etc.
A local RE Agency or rental management agency might very well be in the business of renting and selling such TS shares so I’d ask around about that.
Re: Fractional Ownership - Posted by Rich-CA
Posted by Rich-CA on February 11, 2008 at 21:06:40:
DOS - any change in ownership except to a Living Trust, a successor (such as children or spouse after death) would allow the DOS to be exercised.
Re: Fractional Ownership - Posted by josh
Posted by josh on February 11, 2008 at 23:21:24:
I was under the impression that a change or addition of a beneficiary is not a change in ownership.