At first, the idea of buying a timeshare property may seem immensely appealing. But over time, most people come to realize that a timeshare is much more of a burden than it is a blessing. Although the average age of U.S. timeshare owners is 46.8 years old, many seniors are convinced to buy or hold onto a timeshare when they’re in their twilight years. Not only can that present a huge financial problem for the owner, but it could potentially have significant consequences for the owner’s children, as well. In today’s post, we’ll discuss the idea of the timeshare inheritance and why owners should work on selling a timeshare before that ever becomes an issue.
What happens to a timeshare when the owner dies?
If you own a timeshare, you might assume that your death eliminates the possibility of ownership and the payment of maintenance fees. But that’s actually not the case. Even after the owner passes on, timeshare payments stick around — and they will continue to accrue when they aren’t paid. In that sense, it’s like a mortgage; non-payment will be reported and this can cause a multitude of problems for the owner’s estate. A timeshare resort may even take legal action against the state, which translates to an even greater financial burden for grieving families. This doesn’t have to be the case, but eliminating this possibility will require action.
Are the owner’s children forced to inherit the timeshare?
You may have heard or read that many timeshare agreements include what’s known as a “perpetuity clause.” A contract may state that an owner’s heirs, executors, administrators, or successors are legally responsible for the financial obligations of that timeshare property once the owner has passed away. Scammers who call about timeshare resales may also try to scare current owners or heirs into thinking they’re obligated to make these payments in an effort to convince them that getting rid of a timeshare through their “services” is their only option. This language is misleading, as it implicates that the next-of-kin has no say over whether or not they have to take financial responsibility for the timeshare.
The reality is that your children can (and should) decline this inheritance. Typically, they will have to write a statement or letter refusing the timeshare inheritance. This must be done within a relatively short amount of time after your death. If and when this disclaimer document is approved, the inheritance would pass on to the next beneficiary. It’s important to note that your heirs cannot continue to use the timeshare after your death if they do not intend to accept the inheritance. If they use the property after your passing, they could be forced to accept the inheritance and all financial responsibilities of your timeshare.
What’s the best way to avoid a timeshare inheritance scenario?
Selling a timeshare is the best way to avoid presenting an undue financial burden to your children after your passing. Although you do not have to designate who will receive the timeshare at the time of your death, even failing to name a beneficiary will not save your family from being saddled with this vacation property. To keep this timeshare from passing to your relatives and adding debts to your estate, you should work on selling a timeshare well before your passing. If you are not able to sell the timeshare back to the developer, you should contact timeshare lawyers prior to your death to ask about selling a timeshare with their help. Canceling or selling a timeshare prior to your death will allow your children to be freed of this financial responsibility and will grant you peace of mind.
If you need help selling your timeshare and want to explore your options, we’re here to help. Contact our firm today for more information.