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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