Timeshares can be a headache when it comes to your estate planning. If not treated appropriately they can cause many time delays and extra fees for everyone involved.
Estate Planning Attorney Bill Henry goes over how to properly handle a timeshare within your estate plan.
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Bill Henry here with Robinson & Henry. Today, I want to talk to you about timeshares in your estate plan. It actually comes up pretty frequently. So what is a timeshare? Timeshare is basically a fractional ownership. You normally see them in vacations.
So, for example, if I’m in Colorado, I might have a week or two weeks or five weeks at a resort in the mountains, say at Vail, for example. And so the question is how am I gonna handle this in my estate plan? Well, it is real estate, like anything else. You have a lot of options on how you can handle it.
You could put it in your trust if you have a trust. You could gift it via a will through your state that way. One question that also will come up, though, is, well, what if I bought a timeshare in one of those seminars and it really just turned out to be a terrible deal? Although I own the timeshare, the monthly fee is just outrageous. I don’t want to burden my children, for example, with this timeshare, what can I do in that case?
Well, you know, it happens. I can tell you it happened in my family whenever my grandfather passed. There was a timeshare. And so the question became, well, who’s responsible for that? And the answer ultimately is no one is responsible for that unless new paperwork is signed.
So just because I inherit a timeshare through the estate doesn’t mean I’ve automatically become liable for that timeshare. Now, having said that, a lot of these timeshare companies are gonna say that you need to sign the new documentation becoming liable if you’re now the new owner.
That’s up to you whether or not you sign it. If you don’t, they probably will foreclose on that interest. The result though is a little bit different if we put it into the trust, because if I take my timeshare and I put it into the trust, the trust actually owns it at that point. So if that trust now also becomes liable for that debt, then the trust will continue its liability even though the beneficiaries upon whoever initially purchased it, they won’t become liable for it, but the trust could theoretically become liable for it depending on how that paperwork was ultimately set up.
So I guess the short answer is what do you want to do with it? You’ve got all the options available to you. You can gift it during life. You can devise it upon death, through your will. You can put it into your trust. If the concern is, of course, liability for your heirs, then just be careful that whoever is going to inherit that doesn’t sign on the dotted line and become liable on it.
Call 303-688-0944 if you have questions about your timeshare. You can also schedule yourself online when you click here.