If you have ever traveled to a resort associated with a timeshare, it’s likely you have been approached with a presentation about timeshare ownership. You’ve enjoyed the amenities and accommodations throughout the week and daydream about how nice it would be take a similar vacation every year. Timeshares give you the ability to return and relive your travel experiences or, for an additional fee, you may opt to exchange for a different resort location expanding your vacation options. You are able to enjoy home-like accommodations and your long-term savings over hotels may even outweigh the upfront purchase price. Many are drawn to the appeal of owning a timeshare; however, once purchased, you own an asset that could become more of a hassle than you originally planned for.
Over time, your situation may change and you may find that you are unable to use your timeshare as much as you would like. At that time, you may want to sell it or simply walk away. Or perhaps you have enjoyed your timeshare for many years and have no plans to sell, but start to wonder, “What will happen when I pass away?”
If you are ready to sell, be wary of scams asking for large upfront fees to assist in selling your unit or claiming to already have a buyer lined up. Selling or giving away your timeshare will largely depend on the location as well as the condition of the resort. Unlike other real estate investments, timeshares are likely to depreciate in value. Visit Sharket.com to find out your unit’s “saleability score”. If it is marketable, contact a real estate agent with experience in listing timeshares. If your timeshare doesn’t score well, inquire with the resort if they will buy or take back your unit. Stay persistent in asking the resort to cancel your contract but do not simply walk away. You will be turned over to a collection agency if you stop paying your annual dues.
If you plan to hold on to your timeshare, it is a part of your estate and will pass to your heirs following your estate plan. Consider who may want this asset and if they will be able to pay the annual dues. Timeshares are often held as joint tenants between couples; when one spouse passes away, sole ownership is transferred to the surviving spouse. You can add an adult child to the title, but be cautious of the pitfalls that come with having additional owners. This includes the loss of independent control over the asset, additional exposure to creditor claims, and disagreements on how the asset and fees should be shared. Alternatively, you may create a separate revocable living trust with the timeshare being the only asset owned by the trust. This gives your heirs more flexibility in inheriting or disclaiming the asset and prevents the timeshare from being comingled with other estate assets that may ultimately have to be used to pay the dues on the timeshare if no one wants it.
In a saturated market, timeshares can be very difficult to sell and your heirs may not want to inherit the responsibility of paying the association fees. If you have a timeshare, meet with your estate planning attorney to discuss your options on how best to pass down the asset. If you do not have a timeshare, consider booking your travel accommodations on websites like Airbnb or VRBO before purchasing a potentially tainted asset.