Making preparations for what you want to happen to your timeshare when you pass away can be a difficult task. Many timeshare owners wish to pass on their pleasant timeshare experiences to their friends or family.
If this sounds like something you’re considering, it’s essential to talk with prospective beneficiaries ahead of time. Because timeshares often represent real property interests, if the timeshare is not deeded while you’re alive, it must be deeded through the probate process.
Since timeshares are rarely located near the owner’s home, the probate process can become complicated very quickly. Do not let this scare you off, though. You have options!
To make the entire process easier and save your family stress and financial difficulties, here are five important things you should consider if you own a timeshare.
Timeshares and Estate Planning
When a deceased’s estate is probated, timeshares can be inherited by named parties. However, timeshares are frequently a financial burden for the decedent’s beneficiaries. The timeshare owner’s estate is responsible for the timeshare payments and property tax charges due each year, even if the timeshare owner has passed away.
While the deceased may have believed the beneficiary desired or would appreciate the timeshare, the recipient may not want to pay the extra costs. This is why it’s so important to have discussions with beneficiaries while you’re still alive. This can save them an unnecessary headache down the line.
As you begin estate planning, it’s essential to know the different options you have available to you.
1. Selling the Timeshare
To skip the probate procedure, you could choose to sell the timeshare. Unfortunately, timeshares are notoriously difficult to sell, and they frequently sell for a fraction of their original cost.
Even if the property is reduced in price, the loss is likely to be smaller than the cost of going through the probate process.
2. The Right of Survivorship
When a timeshare is owned by a married couple, the right of survivorship might come into play. If you have this, it’s called joint tenancy. When one of the owners passes away, the property immediately goes to the remaining owner.
3. Abandoning the Timeshare
If the recipients are unable to pay to keep the timeshare, they might choose not to inherit it. The property will most likely be reabsorbed and resold by the timeshare management company to repay any outstanding financial obligations on the property.
Rejecting a timeshare property might result in fines and tax repercussions, as well. Consult with a knowledgeable legal professional to determine any penalties that may apply to your specific property.
4. Transfer on Death Affidavit
The transfer on death affidavit is a simple method to keep your property out of probate. It is a document that instantly switches the ownership of the timeshare to the beneficiary named on the affidavit when the owner passes away.
Transfer on death affidavits are not recognized in all countries. Even if they are, the beneficiary is still accountable for paying any related timeshare fees.
5. Deeding the Timeshare into a Trust
Converting a timeshare into a revocable trust is one of the most favorable choices for transferring a timeshare. As a trustee of the trust account, the owner will maintain ownership of the timeshare over their lifetime.
The timeshare will subsequently be held in trust and used by the beneficiaries of the trust. The trust will be responsible for paying the timeshare’s fees and taxes.
Finding the Right Solutions for Timeshare Inheritance
If you own a timeshare, you should consult an attorney to determine which strategic planning is best for you. Timeshares can be difficult to transfer upon death, so it’s in your best interests to keep the expenses to your beneficiaries as low as possible.
Similarly, it can be helpful to meet with a knowledgeable real estate attorney to discuss the implications of timeshare inheritance. If a loved one has mentioned that they would like to pass along their timeshare to you in the event of their death, having a legal professional on your side can make the process much easier.