Your Estate Plan and Owning a Timeshare

When it comes to your estate plan and owning a timeshare, there’s one thing that many people who purchase timeshares do not understand. Most don’t know how to properly protect these assets and/or pass them on to heirs.

If you own a timeshare, you likely understand how they work. Hopefully, yours has been and will continue to be the source of wonderful travel adventures and memories. The main source of confusion typically arises during the purchase. This is because of the “Perpetuity Clause” that exists in most contracts.

As it relates to your estate plan and owning a timeshare, the Perpetuity Clause basically states that you’re the owner of the timeshare for your life. When you pass away, ownership would become part of your estate.

At that point, responsibility to pay any fees would be inherited by your estate, next-of-kin, or a designated Beneficiary. For most timeshare owners, they think this clause is sufficient. Not so. Your timeshare needs to be included in your estate plan just as your house is, your investments, savings and other valued assets are.

The most important thing to take into consideration with timeshare are the fees associated with timeshare ownership.

Discuss your timeshare plans with the person you intend to leave it to. They should enjoy travel, be able to use it, and afford the ongoing fees.

If your beneficiary does not want the timeshare or cannot afford it, you have options. You can name them as a co-trustee of the timeshare in your estate plan.

A co-trustee can decide what to do when the time comes. They may keep it and pay the costs, sell it, or walk away. This approach can protect both the beneficiary and your estate from ongoing financial obligations.

Also, depending on how they’re originally titled, timeshares may be subject to probate.

Probate, as everyone knows is an expensive, time-consuming, often stressful (for your heirs) court proceeding that certain parts of your estate may go through after your death. It’s a process everyone wants to avoid if at all possible. Having a well written Estate Plan is one way that many people avoid probate. And there is a way to keep a timeshare out of probate. You can place it inside a Revocable Living Trust, which makes the Trust the legal owner of the timeshare and, like with all Trust-owned assets, removes probate from the scenario entirely. The terms of the Trust will have explicit instructions about how the timeshare should be transferred to a Beneficiary after your passing.

If you own a timeshare and have not yet created an Estate Plan, give my office a call. We can help you avoid the headaches many timeshare beneficiaries inherit all too frequently.

Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!