A parent’s death leaves us to deal with not only our grief in the aftermath, but also the inheritance of properties like a timeshare. Many contracts for timeshares include a clause that automates the transfer of the timeshare to the owner’s children after his or her death. Other agreements may have a provision that designates the property rights to a specified beneficiary upon the owner’s death. The owner’s will may also stipulate passing a timeshare to an heir.
If you inherit your parents’ timeshare property and you don’t want it or can’t use it, how do you get rid of it? Can you be forced to inherit a timeshare? What happens to a deeded timeshare when you die?
At EZ Exit Now, we help our clients cancel unwanted timeshares. If your parents own a timeshare, be sure to encourage them to establish an estate plan that will determine what happens to a timeshare property upon death. If you’re already facing the inheritance of an unwanted timeshare, we have the answers to a few of the questions you may be asking.
Will My Parents’ Timeshare Pass to Me?
When people sign up for timeshares, they usually do so without fully understanding what they’re getting themselves into. For a week or two throughout the year, they can enjoy a timeshare and pay into a $9.2 billion industry. Many timeshare owners find they can’t afford the required maintenance fees as they increase over time and that they can’t sell their timeshare. Many timeshare agreements last a lifetime and can be extremely challenging to get out of.
For anyone whose parents own a timeshare, you may think you should be allowed to refuse the inheritance if you didn’t sign the timeshare contract. Unfortunately, reality may not be that simple.
For the parents who signed the contract, usually, the only way out of it is death. But even death may not be a true escape, as many timeshare contracts contain what is known as a perpetuity clause. This clause essentially requires your parents to pay the ownership costs for the remainder of their lives. After death, the timeshare becomes a part of their estate and the obligation for the property’s financial upkeep falls to their next of kin or their designated beneficiary. Depending on your interest in the property and your financial ability to pay for the cost of the fees, your parents’ timeshare could be either a gift or a burden.
Financial Responsibility of the Timeshare
After your parents’ death, you, the heir of their estate, are responsible for paying the maintenance fees on their timeshare. Fees tend to increase as the timeshare’s value depreciates. That means the cost of keeping the timeshare becomes increasingly burdensome, at the same time the timeshare also becomes more difficult to sell.
The value of a timeshare depreciates faster than any car, plummeting the minute you purchase it. While your parents may have initially purchased property in a resort area for $30,000, the resale rate may only be $6,000 to $7,000. A timeshare your parents bought 30 years ago may be worth less than $500, now with an annual maintenance fee twice the property’s value.
Many older timeshare properties don’t have any value at all, but their annual fees can be astronomical and continue to climb. Annual maintenance fees average at around $900, but, depending on the property, can be over $3,000. On top of maintenance fees, timeshares also come with assessment fees, which include upgrades, repairs, management changes and weather-related damages. In the event of severe weather like hurricanes, earthquakes and tornados, repairs can cost thousands of dollars for timeshare owners.
Though the timeshare company cannot punish you, the beneficiary, if you choose not to pay, they can pursue action through your parents’ estate.
When you are not making the payments, late fees will accumulate and the resort will regain the timeshare. If your parents’ estate has assets at the time of their death, those assets will go toward satisfying the debt. Not all assets are subject to being used to repay the debt — like homestead property — but assets that can be subject to probate are usually unprotected.
If your parents named you a beneficiary when they bought their timeshare, the consequences of not paying your annual fees could be more severe.
Not paying the annual fees on the timeshare may result in a delinquency notice requesting that you pay your fees, along with a high-percentage interest rate tacked on. You may end up paying late fees on those annual $900 payments at an interest rate upward of 18%. And if you don’t, your credit may suffer.
Probate for the Timeshare
How the timeshare passes to you from your parents depends on the timeshare title. If your parents co-owned the timeshare with another tenant, it automatically transfers to the living owner, temporarily eliminating probate. If your parent is the sole owner, however, their timeshare will go to probate upon their death.
It is impossible to avoid probate with a will. Instead, a will determines the distribution of assets. The length of probate depends on the value of the assets and on the state laws. You cannot use the timeshare during probate, and during this time, the executor of the estate will be the one responsible for ensuring the maintenance fees are getting paid.
To keep the timeshare out of probate, your parents can add you or another beneficiary as an owner on the deed or place the property in a revocable trust. Ask your attorney or financial adviser about whether to set up a timeshare deed vs. trust.
Cancellation Methods for Your Parents
Your parents may also have the option of getting rid of the timeshare while they’re still alive and the contract remains in their name. Even though agreements for timeshares last indefinitely, your parents may still have some potential exit routes, such as with an attorney or with us at EZ Exit Now. For example, an attorney may be able to look over your parents’ contract and find discrepancies. If the resort or sales representative misled your parents about facts so they could lure them in, your parents may have a legal escape route.
Another option your parents may have is selling the timeshare. They will likely lose money, but they’ll also be relieving themselves and you from the obligatory annual maintenance fees. Be aware, however, that the market for resale brokers is full of scammers who promise a quick and easy sell for thousands of dollars — then disappear with the money and no sale. Follow these tips for avoiding a scam:
- Stay away from companies that charge a costly upfront fee.
- Be wary of anyone who makes promises of a speedy sale.
- Research the company to check if anyone has made complaints against them.
- Hire an attorney so they can review the documents before you sign them.
If the resort offers a deed-back program, your parents may be able to complete a timeshare deed transfer and relinquish their rights to ownership. If the timeshare has a mortgage, your parents will need to negotiate with the lender directly.
If you’re still facing the worry of your parents’ timeshare being passed on to you, you may have a few other options at your disposal.
How To Legally Refuse a Timeshare Inheritance
If you’re unsure whether you still may be subject to a timeshare inheritance, we have a general guideline of steps you can take to legally refuse the timeshare. Keep in mind, however, that the process, laws and timeshare state definition can vary between states. Be sure to check the laws for where you live when you decide to pursue your timeshare inheritance refusal.
Follow these steps to disclaim your inherited timeshare.
1. Do Not Use the Timeshare
If you intend to disclaim a timeshare legally, you must not have used the timeshare to benefit yourself at all upon inheritance. That means you can’t receive compensation of any sort from the timeshare upon inheriting it. Even a trip to check out the property may result in you being unable to legally disclaim the timeshare.
2. Don’t Waver in Your Decision
Once you proceed with refusing the timeshare inheritance, your decision will be permanent. You won’t be able to give the timeshare to charity or to a close friend or relative once you’ve stated your disinterest and refusal.
3. Act Fast
Generally, you will have approximately nine months after the death of your parents, although laws do vary. The exception to this is if you’re a minor — then, you have nine months after you turn 21 to refuse the property.
4. Read the Contract
You’ll want to read the contract as soon as possible to get an understanding of what the timeshare contract contains, so you can avoid penalties or legal action for a breach of contract or any late fees.
5. Continue Making Payments
Though you may feel tempted to cease making payments on your unwanted, inherited timeshare property, the fees and fines can accrue quickly, and property management companies may decide to take legal action in as short a time as two months.
6. Put in a Disclaimer of Interest in the Timeshare
The Disclaimer of Interest is a refusal in writing to accept your parents’ timeshare. If you need help with the paperwork, you can contact a qualified timeshare estate planning attorney. This disclaimer should include the following elements.
- A property description: You should be able to obtain this from the estate executor if you don’t already have access to it.
- A statement of your renunciation of the property: Specify the extent of your renunciation, which is forever.
- Your name and your signature
7. Make and Send Copies of Your Disclaimer
Make several copies of your disclaimer, keeping one for yourself and sending copies via certified mail to both the timeshare company and the executor of the estate.
8. Arrange for the Executor to Send the Death Certificate to the Property Management Company
Request the estate’s executor to send a copy of the certificate so that the property management company will stop requesting maintenance fees. If the property is also under a mortgage, you’ll want to arrange for the executor to send the bank or resort a copy of the death certificate as well to prevent them from foreclosing on the property.
9. Inform Friends and Family About Your Decision
When you refuse a timeshare, the property generally goes to the person who is next in line to inherit. If they also don’t want the property, they must file a Disclaimer of Interest as well.
10. File Your Disclaimer of Interest in Probate Court
For the final step of the process, visit the county probate court that is handling the willed estate. File a copy of your timeshare renunciation here so it can serve as an official record if there is any question about your renunciation.
If you wish to refuse the inheritance of your parents’ timeshare, you may be able to follow this generalized guideline to ensure you won’t have to deal with your parents’ timeshare after their death. However, if you need further assistance or a more specialized approach, EZ Exit Now is here to help you.
How to Get Out After Inheriting a Timeshare
To get rid of a timeshare you’ve already inherited, you may have a few options. You can sell the property, transfer the property or work with a timeshare cancellation company like EZ Exit Now to get out of your timeshare.
Sell the Property
You may have the option of selling the timeshare back to the company or selling it privately.
First, check to see if the timeshare company will buy back the property. Though this is rare, it does happen. However, you likely won’t receive the full value of the property via a buyback. Check your contract to see if the company buys them back and what their terms are.
You may also have the option of selling your timeshare to someone privately. Again, you will likely sell it for far less than your parents paid for it. You can use sites designed specifically for timeshare sales to list your property, though you will have to pay a fee to sell your timeshare. You may also be able to use a free website to sell your timeshare, such as Craigslist.
Transfer the Property
Another option at your disposal may be transferring the timeshare property.
If your timeshare company doesn’t offer a buyback option, they may still be willing to take a timeshare property back for free. Though it will represent an enormous financial loss, if you weren’t the one who bought the property in the first place, you won’t be losing that initial large purchase expense. Instead, you’ll be saving yourself hundreds of dollars by ridding yourself of the timeshare’s annual fees.
You may also have the option of giving your timeshare to charity. If your timeshare doesn’t seem to be selling, you may want to consider donating it to a person or an organization, like a church.
You can also transfer the property to someone else when you file a Disclaimer of Interest. When you refuse to accept the inheritance of a timeshare as a beneficiary, the property will go to the next person in line to inherit it.
Work With Us at EZ Exit Now
At EZ Exit Now, we believe a parent’s death shouldn’t saddle you with any added burdens, and we want to help you make the cancellation of your parents’ timeshare as easy and fast as possible. When you work with us, we’ll follow a step-by-step process to help you get rid of the unwanted timeshare you’ve inherited.
1. We Meet With You
Our cancellation process begins with a one-on-one meeting with you in a comfortable setting of your choosing, such as your home, a local cafe or our office. Wherever you decide to meet with us, the meeting will happen at your convenience and on your terms.
During the meeting, you’ll discuss your situation with us as we take notes and ask questions to ensure we have all the details we need. After we review the details of your circumstances, we can then start discussing options and making decisions as a team about how to proceed.
2. You Sign the Paperwork
After we decide what the next steps will be, we’ll provide you with any documents necessary for your review and signature, and send any paperwork to an attorney if necessary or to a title company to begin the cancellation of your timeshare.
Relevant documents will be recorded and filed with a transfer agency or county clerk, and we’ll then confirm records indicate you no longer are an owner of the timeshare.
3. We Call You With the Good News
The last step in the process is the phone call we make to you to let you know that you no longer own a timeshare or vacation property.
To get rid of an unwanted timeshare you’ve already inherited, consider your options and follow the steps for the path that’s right for you.
Get Help From Us at EZ Exit Now
Though purchasing a timeshare is often a bad financial move for various reasons, many people fall for the allure and end up in a situation they’re unhappy with. When you purchase a timeshare, you’re generally stuck with a single company at the same resort year after year. You may not use it frequently because your schedule conflicts with the single week you get to use the timeshare a year or because you no longer enjoy visiting the destination. Timeshares cost tens of thousands of dollars upfront, and then their annual fees continually get more expensive, even though the properties don’t appreciate in value, don’t generate any income for owners and aren’t a liquid asset.
After the death of our parents, the last thing many of us want to worry about is inheriting a timeshare and getting stuck with annual fees we can’t afford. No one should have to inherit a timeshare they don’t want, can’t use or can’t afford. If your parents own a timeshare, encourage them to either get rid of the timeshare if they have the option, or to remove you as the beneficiary from any contracts or deeds.
If your parents are unable to get rid of their timeshare, or if you’ve already inherited one, don’t panic. You have options, and we have the tools to help you.