Timeshares

         While timeshares may
help the time share owner to enjoy a certain amount of leisure each year, they are
a headache for estate planning purposes.
Even though a deeded timeshare is an interest in real property, it is
really more of a recurring luxury expense than it is an asset.    Let us
consider some issues raised by time shares:
On-going maintenance and property tax expenses; hard to sell; sometimes
undesired as an inheritance; and how they are transferred at death. 

The owner, or the
deceased owner’s estate, is liable for all time share maintenance fees and real
property taxes.  These continue after
death and can pile up if unpaid; regardless of whether anyone uses the time
share, your estate remains obligated to pay these expenses.  A decedent’s estate will often wish to sell
its timeshare(s).

Unfortunately, timeshares
are very difficult to sell.  Perhaps the
best place to start is with the timeshare company itself.  Sometimes, for a large fee or commission,
they can assist in selling an existing timeshare.  Otherwise, other possible avenues are to
lease the time share, cancel the timeshare, or sell the timeshare through a
time share market.   Aside from leasing,
the other options all involve losses.  So
essentially, the timeshare is more of a luxury expense than an asset.

Time shares, if they
are deeded (as opposed to leased) are real property interests.  Accordingly, once the owner dies, just like owning
real property, the laws of the state where the time share is located control.  If title is held in joint tenancy with right
of survivorship, then the surviving joint tenant(s) file an affidavit of death
of joint tenant to remove the deceased joint tenant’s name from title.  Alternatively, if title is held in the name
of a trust, then the trust controls who inherits the timeshare without probate. 

However, if title is
held in the deceased owner’s name alone, then a probate may be triggered. This depends
on the size of the decedent’s estate, whether the property is in the decedent’s
state of residence, and the laws of the state.
In California, if the combined value of the timeshare and any other probate
assets belonging to the decedent (excluding real property located outside
California) are equal or exceed $150,000, a probate is required.

 If the deceased California resident owns a timeshare(s)
outside California, it is possible that ancillary probate(s) may be required
under the laws of the other state(s) in order to transfer the deeded timeshare(s)
— either according to the deceased owner’s will or the laws of intestacy of
the state(s) where the deeded property is (are) situated. 

To avoid triggering a
probate in any state deeded timeshares, just like any other interests in real
property, are often transferred into the owner’s living trust, prior to the
owner’s death.  A living trust can hold
all of a person’s real property assets located anywhere in the United States,
including time shares.

Next, the death
beneficiaries oftentimes do not even wish to inherit time shares because of their
expenses, including travel to reach their locations.  If, however, there is a willing beneficiary
who has the time, money and desire to use the time share, then that person
could inherit directly from the deceased owner’s trust provided that the time
share has been transferred to the trustee.

 Timeshares are just another reason to hold
assets inside one’s living trust and get one’s affairs in order.  This in turn will provide a peace of mind more
conducive to fully enjoying all those wonderful vacations.