TimeSharing Today Page 14 May / Jun , 2018
An orphan timeshare
What happens if nobody wants the timeshare and the heirs can ’ t sell it ? If they don ’ t pay maintenance fees , the account goes to collections and then to foreclosure . The estate shouldn ’ t be closed until the timeshare is resolved .
If the estate is prematurely closed , any foreclosure would necessarily name the heirs . This isn ’ t punitive .
Say this was a $ 500,000 vacation home . The owner passed away , and it was going to be foreclosed on for $ 10,000 worth of unpaid assessments . If you were the owner ’ s second cousin twice removed , wouldn ’ t you want a chance to redeem that property ?
The purpose of these laws is to protect heirs , not punish them . Naming the heirs in the foreclosure suit gives them the opportunity to claim the property by paying off the debt .
Of course , if nobody wants the timeshare , then getting named in a foreclosure lawsuit is not a nice last gift to leave for your heirs .
Let ’ s take a closer look at what usually happens . Generally , when a married couple is listed on a deed together as husband and wife ( or similar language ), and one predeceases the other , the surviving spouse automatically takes full ownership of the timeshare .
If your husband who was on the timeshare deed with you passed away , you could transfer your timeshare to your neighbor by signing a deed and adding an affidavit and death certificate setting forth that your husband has passed away . This only works for married people , though .
Alphabet soup
For people who aren ’ t married , language exists to treat them more like married people . It ’ s called joint tenants with rights of survivorship ( JTWROS ).
Say Joe and Susan bought a week together , and Joe dies before Susan . Susan doesn ’ t get Joe ’ s half . Joe ’ s estate and heirs do — unless Joe and Susan are on the deed together as JTWROS .
Then if Joe dies before Susan , Susan gets Joe ’ s half of the timeshare similar to the way a widow or widower would take ownership of the surviving spouse ’ s share .
If the timeshare ’ s state doesn ’ t allow for personal representative deeds , parents can add their child ( over the age of 18 ) to their deed . The new deed includes mom and dad and junior as JT- WROS . Then , when mom and dad pass away , junior takes ownership without having to go through mini probate and all the associated expense .
This isn ’ t a solution to every problem . If this was a $ 500,000 vacation home and you put your kid on the deed , you better hope your kid doesn ’ t get in a car accident or run up his / her credit cards or get divorced , because a creditor will come after that property . Since a timeshare has no value to a creditor , this isn ’ t a problem .
Transfer on death
Many states now also allow for a Transfer on Death ( TOD ) or beneficiary deed . California , Hawaii , Missouri , and Nevada allow forms of this . Florida , North Carolina , South Carolina , and Tennessee do not .
You execute the deed while you ’ re alive . Once you pass away , ownership of your timeshare transfers to whoever you ’ ve named on the deed . This works best when you know somebody who wants your timeshare .
You could also just deed your week to a friend or relative who wants it before you die . This is the simplest solution .
Other options include deeding your timeshare to a trust or a corporation . Remember that transferring a timeshare from you to a trust requires the same formality as selling it to a stranger , and your local estate-planning attorney must comply with the legal requirements of the state where the timeshare is located .
Even after you ’ re gone , the trust or corporate entity survives . As the owner , it must pay maintenance fees . If it doesn ’ t , collections and foreclosure may result .
Do the right thing
Making plans for your timeshare as part of your estate is important . Find out what laws apply to your situation , and take steps while you can to ensure that you do not stick your heirs with unnecessary expenses to inherit your timeshare if they want it . Deed it to them while you are alive , or if personal representative ’ s deeds are allowed , designate it in your will .
Alternatively , use a TOD deed if it is allowed . Consider adding an heir to your deed as JTWROS if TOD deeds aren ’ t allowed . Use a family trust or corporate entity if that makes sense for you .
Please , if nobody wants it , then be kind and don ’ t leave it in your estate . Deal with it while you ’ re alive and don ’ t leave a mess for your family to clean up .
Alex Chris Costopoulos , J . D ., is the in-house counsel at FantasyWorld Resort in Kissimmee , FL . Jeffrey T . Weinland , Ph . D ., CHA , CHE , CHAE , is board president at FantasyWorld Resort and a lecturer at the University of Central Florida ’ s Rosen College of Hospitality Management .
Editor ’ s note : The contents of this article are intended to convey general information only and not to provide legal advice or opinions . Always consult with your own attorney and financial advisor on matters described herein .
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