The purpose of estate planning in California (or in any other state) is to express how you’d like your assets handled after your death. The goal is to take care of those you love. Yet, one consideration that many people neglect to think about is a timeshare. Although you don’t actually own the timeshare property itself, it’s important to consider what will happen to it when you die.
Review Your Timeshare Agreement
The first thing you must do to determine what happens to a timeshare when you die is to read the agreement. Look for an “in perpetuity” clause. This clause means that you’re contractually obligated to pay for the timeshare for the rest of your life. If this clause is present, the obligation is passed on to your heirs. For many, people that can create an unwanted or a non-sustainable expense.
Planning Ahead Is a Good Way to Avoid a Problem
If you’re thinking about purchasing a timeshare and decide to move forward, do not put the name(s) of your adult child(ren) on the deed or in the contract. This could make it very, very difficult for them to get out of the contract if they cannot afford or do not want the timeshare.
If you already own a timeshare, talk with your heirs to find out if they want the timeshare when you die. It’s also important to discuss the financial ramifications that come along with the property each and every year. This includes maintenance fees as well as repair fees for natural disasters. You must give all of the information your family needs so that they can make a decision. Their decision can then help you move forward with the estate planning process.
If your heirs do not want the timeshare when you die, you could also contact the timeshare company and ask about the process of giving up the property. Sometimes, the company will allow individuals to get out of the agreement for various reasons. You could also look into selling your interest as well. If necessary, you should talk with a lawyer who specializes in helping people get out of timeshare contracts.
You can also talk with your estate planning lawyer to learn some of the options available to you.
What Can Heirs Do If They Inherit a Timeshare They Don’t Want?
If your heirs inherit a timeshare when you die, they may have the legal right to disclaim the property. The heirs can tell the executor of the estate to inform the resort that the owner died and that they can reclaim the timeshare because the heirs do not want to exercise the “right to use” option or clause. The disclaim by the heirs should also be placed in writing and put on file with the probate court handling the estate. There are lawyers who specialize in helping individuals return the timeshare to the company. Of course, before taking on the additional expense of a lawyer, it is important to first contact the timeshare company and ask if they will simply take the property back.