Inheriting a timeshare and wondering if you should sell it? Check with an estate attorney to see if you can sell the timeshare.
By: Ilyce Glink and Samuel Tamkin
Q: I just read an article from 2011 on thinkglink.com where you answered a timeshare question. In that question, you said that if a person died without any assets, the time-share company would be unable to get anything from that person’s estate and should not be able to get anything from that person’s family.
The article also stated that if the owner purchased the timeshare in her name, her debts would not pass on to the heirs.
My mom’s timeshare is paid in full. Do the maintenance fees now stop and is there a difference if the timeshare was placed into a trust?
A: You raise some interesting questions. Timeshare expenses continue whether or not a person is living. The timeshare operator continues to maintain the building and grounds and real estate taxes continue to be billed. When you buy a timeshare property, you will incur ownership expenses whether you live in the property or not. The same is true for most any real estate purchase.
Even when you own your own home and no longer have a mortgage, you continue to incur expenses associated with the home, including electric, water, gas and other utility expenses. Not only that, the property will always need maintenance and improvements.
The death of an owner won’t eliminate those expenses from existing and continuing to accrue.
In the question we answered several years ago, the children of a deceased parent couldn’t afford to keep a timeshare and their mother died without any assets other than the timeshare property. In that situation, the relatives could elect not to inherit the timeshare property and the management company for the timeshare development could take the timeshare over to settle any debts owed to it by reselling the timeshare.
For that family, the real issue would have been to investigate whether they could have sold the timeshare unit. In some situations, it is quite difficult to sell timeshares and a couple of years ago, in the midst of the financial crisis, that family decided they would not try to sell it and would rather let the unit go.
Turning to your situation, if your mom’s timeshare can be sold, you’d want to do that. See what the market is like for sales of timeshares like your moms. If you find that you no longer want it and can sell it, you’re better off getting money from the sale.
However, please understand that your situation is a bit different. When your mom died, her ability to use the timeshare ceased but she actually did not own the timeshare. Her timeshare was owned by a living trust.
Living trusts are a great vehicle for estate planning purposes. These trusts allow homes and other assets to avoid probate and to move from owner to owner without having to go to court and get a court’s approval to change the ownership from a relative who has died to survivors. However, for your purposes, your mother might have personally signed documents with the timeshare company and if she had assets and left a will, the executor of her will and the successor trustee under her living trust have an obligation to settle the affairs of the deceased owner.
If your mom had substantial assets in her name and those assets were owned by the trust, the trust continues to own the timeshare and continues to have the obligation to pay the assessments and other costs of owning the timeshare. If your mom had wealth that was outside of the living trust that passed to her kids through her will, her executor might have an obligation to settle debts she had. One of those debts could have been the debt relating to the timeshare ownership.
Given these circumstances, you might want to talk to an estate attorney further about any specifics that might affect you and your mother’s estate. There may be specific circumstances that may change your situation that you might discover with that attorney. (If you can talk to the attorney who drafted your mom’s trust, all the better. That attorney may have some idea about what your mom was thinking when she put certain assets into the trust.)
Start by seeing if you can sell the timeshare. You should check with the timeshare operator what options you might have to sell it. If the timeshare is part of a large hotel chain, they may be willing to sell it for you and keep a hefty commission. At least you’ll get something out of it. Otherwise, the operator might suggest names of companies you might be able to use to sell it.
If you can’t sell it, have you considered using it? Perhaps you could use the time allotted for your timeshare and exchange it for a different property? Depending on the type and quality of timeshare, you might end up seeing a benefit in keeping the timeshare but using other properties that could be of greater interest to you and your relatives.