Leaving your lover is a big focus of pop music. Michael Bublé sings “It’s a Beautiful Day” now that his lover is gone away. Paul Simon offers that there’s no “need to be coy, Roy. Just get yourself free.” But what if the loved thing is something only a parent could love?
Some New Yorkers find one place they know they want to return to for vacation every year and buy a timeshare. But one person’s idea of heaven could be another’s idea of the other place. So, how do you handle disposition of this kind of property in the context of a comprehensive estate plan? There may not be 50 ways, but there are a few you can explore with a skilled estate planning attorney.
What type of sharing do you have?
To start with, it’s useful to know what type of agreement you are in. It used to be that timesharing involved a purchase that yielded a property deed. These days, it’s more common to see things framed in the context of a “right to use” contract. Regardless, chances are good that the agreement includes an “in perpetuity” clause, and that is the element that could create issues for your heirs.
A timeshare becomes part of your estate and any obligations under the contract pass to whoever inherits the asset. Here are some thoughts on possible options for avoiding trouble.
- Sell it: Or perhaps gift it to someone you know will want it. This assumes the purchase obligation has been met in full. Another alternative could be to ask the resort operator to take the contract back.
- Don’t include the children on the contract: While that notion might be sold to you as a convenience so children have ease of access, it can shackle them to the deed.
- Provide for the possibility of disclaiming: You could include instructions in your estate plan on how heirs can decline the inheritance if they don’t want it. If it’s a “right to use” agreement, the executor may be able to take steps to have the resort take the timeshare back.
Some families might opt to put the timeshare interest into a trust. Heirs can be named co-trustees, shielding them from possible collection efforts from resort developers after your death. They can sell the interest or possibly just walk away from the opportunity if they desire.
