My husband and I purchased several timeshares over the years. (Apparently, I can’t say no.) My husband has now died, and I am 72.
Supposedly, one of the benefits of a timeshare is that your children can inherit it. However, our adult son has no interest in inheriting these “vacation opportunities,” nor in being obligated to pay the ongoing maintenance fees. How can I protect him from inheriting the timeshares, which include the burden of paying the annual fees or risking damage to his credit rating for not paying?
-J.
Dear J.,
Timeshares are often sold on the promise of idyllic family memories that can continue for generations to come. Instead, they turn out to be a financial albatross for countless buyers. That’s why eBay is filled with listings from desperate owners seeking to unload their “vacation investments” for as little as $1.
But I have good news: Saying no to buying a timeshare can be tough after a high-pressure sales pitch that stretches on for hours. But it’s fairly easy to say no to inheriting a timeshare in most situations.
In most cases, a timeshare will become part of your estate when you die. If you included it in your will, it would go through probate and pass to the beneficiary of your choosing. You could also transfer it directly to a beneficiary through a trust or joint tenancy titling should you know someone who actually wants a timeshare. If you die without a will or the timeshare for some reason isn’t included, your state’s intestacy laws would determine who inherits it. That would probably be your son, assuming he’s your only child.
When you die, your son could file what’s called a disclaimer of interest with the probate court and send a copy of each disclaimer to your estate’s executor, along with the timeshare companies. Basically, he’d be rejecting the inheritance.
Your son wouldn’t need to reject his entire inheritance if you have other assets that you plan to leave to him. The disclaimer would apply specifically to the timeshares. As always, it’s important to consult with an attorney whenever you’re drafting a legal document.
Generally, he’ll have nine months from the time of your death to do this, though the laws vary somewhat by state. Once your son rejects the timeshares, they would likely go to the next person in line according to your state laws. That means that each person who stands to inherit your timeshares would need to file their own disclaimers of interest.
If all your potential heirs reject the timeshare, the timeshare company will probably foreclose on it. Your estate may be responsible for fees, which could eat into any other inheritance your son would receive. But your son wouldn’t personally be on the hook for any timeshare-related costs.
Your son and any other heirs should avoid using these timeshares after you die. Whenever you reject an inheritance, you can’t derive any benefit from the property you’re disclaiming. By staying for even one night at one of your timeshares, he’d risk violating this rule.
The advice I’ve given up to this point has been for your son. One thing you can do to make things easier is to make sure his name isn’t on any of the deeds. Timeshare companies frequently push buyers to put their children’s names on the deed, saying it’s more convenient. But this will make disclaiming the inheritance more complicated for your son. If your son’s name is on any of the deeds, contact the timeshare companies about removing it. They’ll often agree if there’s no loan attached.
If you don’t use these timeshares much, look into your options for getting out now to make things easier for your son later. Unfortunately, this is much easier said than done — hence all those $1 timeshare listings. Some companies may agree to take back the timeshare if you don’t have a loan.
It may also be possible to sell some units if they’re located in a popular market, albeit for a small fraction of what you originally paid. Just be aware of the many unscrupulous players involved. Don’t pay any upfront fees to a company that promises to sell your timeshare or get you out of the agreement. Use the Licensed Timeshare Resale Brokers Association website to find a broker who will charge a commission if they sell your timeshare instead of demanding an upfront payment.
You’ve probably learned the hard way that timeshares are typically a terrible deal. Otherwise, the salespeople wouldn’t have to lure you into presentations with free hotel stays and theme park tickets. They’d have a willing pool of buyers.
Fortunately, though, it’s a lot easier to say no to inheriting a timeshare. You may be stuck with your timeshares for now, but your son doesn’t need to take on the burden of these money pits.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].
