From Time To Time, We Will Answer Questions We Receive From Our Clients On Our Blog
Naturally, if ONE person is pondering a topic relative to estate-planning, it is possible there are others out there wondering the same thing.
Today’s Question Is: How Do We Handle Our Timeshare In Our Estate Planning?
Timeshares are a great way to vacation and they often ‘force” its owners to take the time to go away because they have been paying fees on top of the cost of the timeshare and don’t want to waste that investment.
The Trouble Is, When Owners Grow Older, Questions Arise. The Main Issues Are:
- When a timeshare owner passes away and owns a trust, the trust could be held liable for the management fees (these never stop being levied).
- Timeshare companies are more concerned with their maintenance fees than they are with wanting the timeshare deed returned to them.
- When family members do not wish to inherit the maintenance fees along with the timeshare, they tend to eventually quit paying them.
When beneficiaries stop paying the maintenance fees, the timeshare company follows a typical protocol to send collection letters against the estate, which will escalate as time passes and the fees aren’t paid. But, these are demands against the estate, not directly against any beneficiary.
Eventually, after time has passed (which varies by timeshare company), the beneficiaries may offer to release the share back to the timeshare company for no charge. What most people who own timeshares do not know is that it could take some strong-arm negotiation with the timeshare company, but they usually will give up and take it back. The timeshare company now may sell the share to someone else who will pay the fees and all is well with the world again.
When we are working on someone’s estate plan, we do not recommend changing the ownership of the timeshare to your trust. Moving it to the trust or to an LLC or any other entity won’t change that it is a legal debt of your estate.