The Listen to Lawrence Letter: Burdened by the Family Timeshare

CLIENT QUESTION:

My husband and I own a timeshare in the Berkshires. We are trying to sell it, but it’s next to impossible. When we pass, is there a way our heirs can disclaim it so they are not burdened by the annual maintenance fee forever? Will our estate be responsible for the fees? Any suggestions?

MY RESPONSE:

If it were only that simple.

Disclaiming is probably not the answer. A disclaimer basically says, “I don’t want this inheritance, so let it pass to whoever is next in line.” You don’t get to direct where it goes. It goes to the next beneficiary named in the will, trust, or other governing document. Period. If that person doesn’t want the timeshare either, then they can disclaim it, too. Good luck!

If you cannot sell the timeshare, first check your contract and see whether the timeshare company will simply take it back. I have also heard of clients who simply stopped paying the maintenance fees, and eventually, the timeshare company took the property back. Obviously, check the contract before doing that.

What I would NOT do is what I did when I inherited a Cancun timeshare from my father 18 years ago. After he died, I retitled the timeshare in my own name. Big mistake. Now they have a direct line to me rather than having to deal with my father’s estate.

A better idea may be this: when you die, DON’T have your representative retitle the timeshare into your children’s names. Leave it in the estate. If nobody wants it, stop paying the maintenance fees and let the timeshare company figure out what it wants to do.

Could the timeshare company make a claim against the estate for the unpaid fees? Sure. Could it ultimately try to pursue your children anyway? Possibly. But that could be a cumbersome and expensive road for the timeshare company to travel, particularly if the estate has otherwise been properly administered and distributed, and the only thing left is a timeshare nobody wants. At some point, the timeshare company may simply decide it isn’t worth the effort and take the timeshare back.

Frankly, I don’t have great advice here. These timeshares are a pain in the *&^!

On the other hand, the Berkshires are beautiful!

And I will be thinking about this while I’m drinking a margarita on the beach in Cancun this November. 😊

I hope this helps!

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