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What can we do with a timeshare in an estate?

Discussion in 'Buying, Selling, Renting' started by dgstockwell, Jun 14, 2011.

  1. dgstockwell

    dgstockwell TUG Member

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    My dad recently passed away and owns two timeshares on Daytona Beach. We will certainly try to sell them, but does anyone know the legalities of disposing of the units if no one in the family wants them?
     
  2. T_R_Oglodyte

    T_R_Oglodyte TUG Lifetime Member

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    I believe there are procedures by which unwanted property in an estate can be abandoned. If you are the executor of the estate should investigate what those options or procedures might be. I would expect that the court has some procedures to follow to ensure that nobody truly wants the property and that it cannot be sold or given away.

    If there truly is no one who wants it and you can't sell it or give it away, you should probably contact the resort to find out if they will accept a deedback in lieu of the estate abandoning the property. I would think that it would be in the resorts interest to acquire the property directly through deedback instead of going through the more convoluted process that would be the aftermath of an abandonment.
     
  3. DeniseM

    DeniseM Moderator

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    My first step would to be to call the resort and tell them very firmly that the estate is broke and will not pay future maintenance fees and that you want to deed it back.

    Most timeshares are selling for 0-10% of original retail, so if the resort won't take them back, giving them away might be more feasible.

    To see what your timeshare is really worth on the current resale market:

    1) Register with ebay
    2) Sign in
    3) Search for your resort by exact name
    4) From the menu on the left click "completed listings"
    5) The next page will show you current selling prices

    (Be sure you look at the completed listings - those are actually SELLING prices - you will find asking prices all over the place, but what really counts is what they actually sold for.)​

    If it has no resale value - consider giving it away.

    Click here -> How can I give my timeshare away on TUG?

    WHATEVER YOU DO, DON'T PAY SOMEONE A HIGH UPFRONT FEE TO SELL THEM - THAT IS ALWAYS A SCAM!
     
    Last edited: Jun 14, 2011
  4. bilfbr245

    bilfbr245 TUG Member

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    I don't believe the OP said that the estate was broke.
     
  5. ronparise

    ronparise TUG Member

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    who cares..The message is for effect, the real message is that the estate wont pay the fees. The HOA only has two choice, accept a deed in lieu, or foreclose
     
  6. e.bram

    e.bram Guest

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    Ron:
    But the decadent's credit rating will take a bad hit.
     
  7. Talent312

    Talent312 Tug Review Crew: Rookie TUG Member

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    However, the decedent's estate could take a hit from a claim for MF's made against the estate. The heirs might not be liable for unpaid MF's, but the estate could be. Not all debts die with the decedent.

    Naturally, this would depend on the probate laws of the state in which the TS is located, but in many states, there's a procedure to run out the clock on claims by giving notice to creditors of the time in which they may file claims.
     
  8. ace2000

    ace2000 TUG Member

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    You mean to tell me that there's still some people left that haven't put their timeshares in a LLC? :eek:


    :hysterical:
     
  9. bogey21

    bogey21 TUG Member

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    Whether the estate is broke or not saying so incents the HOA to take a Deed Back.
     
  10. rickandcindy23

    rickandcindy23 TUG Review Crew: Expert TUG Member

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    It would be irresonsponsible for the management company not to take it back. I hope our resorts would. Sometimes management companies get so determined to get fees, they don't consider you cannot squeeze blood from a turnip.
     
  11. bilfbr245

    bilfbr245 TUG Member

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    I suppose that deceit can prove advantageous at times, assuming that you are comfortable with it. However, executors are charged with a duty to fully disclose and can be personally liable for failure in this regard. Also, it is not hard to inquire through county records about the solvency of an estate.
     
  12. timeos2

    timeos2 Tug Review Crew: Rookie TUG Lifetime Member

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    The estate cannot be properly closed out and any distributions made until all claims are settled. That would include the proper handling of the timeshare "assets". Hopefully the resort(s) will cooperate and, other than correctly demanding all fees be brought current, accept the deed back and thus close the case. Simply refusing to pay leaves the estate in a potentially bad situation. It shouldn't be hard to contact the resort(s), pay any current fees due & sign the deed over. Until they try they won't know and are assuming problems that really aren't there.
     
  13. Ridewithme38

    Ridewithme38 TUG Member

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    Hypothetical...

    So IF the resort is unwilling to take a deed-back and the estate is unable to sell the TS...Lets assume in this hypothetical that its a poor TS with with a horrible fixed week that has a super high MF...The Estate has to continue to pay all future MF's until it is completely broke? What happens after the estate is completely broke, the homes, bank accounts have been wiped out all inheritance that would have went to the family...Who's Credit score is effected by the Foreclosure? the Executor of the Estate?
     
  14. DeniseM

    DeniseM Moderator

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    Ride - You keep getting confused on this. They CANNOT go after the heirs for the maintenance fees - they can only go after the estate - a separate entity. Yes, the estate does have to get rid of the timeshare to close the estate, but that doesn't mean that the heirs cannot inherit whatever has been willed to them. No, the executor's credit score is not affected - he doesn't OWN the estate - he executes (manages) it.

    So let's say my mom leaves me a house and there is also a timeshare in her estate that no one wants. I can inherit the house - but the estate executor still has to get rid of the timeshare - two separate issues. So, I inherit the house, and the executor has the headache of figuring out what to do with the timeshare.
     
    Last edited: Jun 15, 2011
  15. Ridewithme38

    Ridewithme38 TUG Member

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    Yah i've got to admit this topic really does confuse the heck out of me

    Maybe if i ask a specific question?

    Say i die with a $2000 car a $100,000 house a $1500 bank account and a TS with a $3000 MF in my estate, the MF is due in 2 months after my death....I only have one Heir, my daughter..Lets say it takes 5 yrs to dispose of the TS by the Executor of my estate ($15,000)...Now can my daughter collect the car, house and cash from the bank account..before the TS is disposed of? Or do they have to be held in the estate until the at the MF is disposed of?

    Maybe my problem is i'm seeing a TS as a debt that would have to be paid out before assets are paid out?
     
  16. glypnirsgirl

    glypnirsgirl Tug Review Crew: Rookie TUG Member

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    I am not a probate attorney, so this is just from memory from Wills and Estates in my second year of law school (1978!!!):

    An estate is a separate entity. Kind of like a corporation.

    The executor is responsible for (1) paying all just debts and (2) distributing the assets to the heirs.

    In Texas, the executor must notify all of the creditors that the estate exists and tell them where to file their claim. The executor then has the responsibility for diligently ascertaining whether the debt is owed or not.

    I do not know if it applies in all states, but in Texas, the executor has the right to object to a claim.

    The parties that actually file a claim, get paid from the estate. Then the assets are distributed.

    Things can change in law and states vary in their probate laws.

    elaine
     
  17. Conan

    Conan TUG Review Crew: Elite TUG Member

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    A decedent's executor has three main jobs: identify and value assets, ascertain and pay valid claims, and distribute assets net of claims to the beneficiaries.

    If the claims exceed the assets, the estate is insolvent and the beneficiaries receive nothing (in an insolvent estate, neither the executor nor the beneficiaries are liable for unpaid claims as long as the available estate assets are paid out to creditors in the proper priorities). If the estate is solvent, an executor who fails to pay valid claims can be held personally liable to creditors.

    So the timeshare like any other asset needs to be identified and valued. Assuming a solvent estate, the executor needs to ascertain and pay any maintenance fees unpaid at the date of death. [A purchase money mortgage may not have to be paid off, if the property is passing to a beneficiary who takes it with the mortgage attached.]

    Unless the executor is able to negotiate a deed-back to the timeshare operator in exchange for forgiveness of past due fees, those fees need to be paid, because as noted above, an executor who distributes property (any property, even if it's property other than the timeshare) to a beneficiary without paying valid claims against estate assets can be personally liable to the decedent's creditor.

    If the timeshare company isn't willing to take it and no beneficiary wants to inherit it (and thereby go on the hook for future maintenance), the executor should be able to abandon the property (but you'd have to check state law on the subject) or, better, sell the timeshare for a nominal price or give it away to anyone willing to take it.
     
  18. T_R_Oglodyte

    T_R_Oglodyte TUG Lifetime Member

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    The situation of estates having unwanted and unsellable property has existed long before timeshares ever came on the scene. Not surprisingly, procedures have been devised to deal with that exact situation. Imagine that!!!!

    In my post upthread I mentioned that an estate can abandon property that is unwanted and for which no takers can be found. It is not necessary (nor is it good public policy) to keep an estate open until it is bled dry because there is unwanted property that requires continuing payment.
     
  19. DeniseM

    DeniseM Moderator

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    A paid off timeshare (even a worthless one) isn't a debt - it is a deeded asset. So, just like any other asset in the estate, it has to be disposed of to close the estate.

    I am not an attorney, but I was the executor of my mom's estate, and you don't have to disburse all the assets all at one time. In fact it's impossible. It usually takes mos. to close an estate.

    Yes, there may be a maintenance fee before the property is disposed of, but that's no big deal - it's normal for an estate to have debts to pay after someone dies - the bills don't go away just because someone dies. But it's part of the executors job to tie up all those strings, pay the bills, and shut down the services that are generating the bills. The MF would just be one more bill.

    For instance, after my mom died, I had to bring all her bills up to date and close the Accts. - her insurances, her phone service, her cell phone, her credit cards, medical bills, etc. That did not keep people from inheriting. We kept a certain amount of cash for about a year to make sure everything was paid off, and then we were done.

    Now, if she owned a TS, paying the MF, and disposing of the asset would have just been one step in the whole process - it doesn't hold up the whole process.

    Remember all those credit card debts you posted on TUG? Your estate would have to pay those off. That would be a much bigger issue than the MF, because of the high interest rate, and the fact that the estate wouldn't have enough cash to pay them off. So I think your worries about leaving a TS to your daughter are minor, when you look at the big picture.
     
    Last edited: Jun 15, 2011
  20. Conan

    Conan TUG Review Crew: Elite TUG Member

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    Unless your executor is able to negotiate a particular deal with the timeshare company, and if your executor really thinks he/she needs 5 years to dispose of the timeshare (I don't know why that would be so), then he/she needs to hold back $15,000 as protection against having to make those maintenance payments out of the executor's own pocket.

    I guess there isn't already a mortgage against your house? If there isn't $15,000 cash in the estate, maybe the executor mortgages the house for $15,000 (if your daughter appears able to make those payments in exchange for inheriting the house). If your daughter doesn't appear able to make the $100 per month or so payment to carry the new mortgage (not to mention carrying any mortgage you might already have against it) only then might the executor have to sell the house, pay off your debts, reserve the $15,000, and distribute what remains to your daughter.

    By the way, if you have these concerns and you're reasonably healthy, you could buy a few hundred thousand dollars of life insurance. Term insurance, I would suggest the five-year level premium type, should be cheap enough. Five years from now, when the premium is about to adjust, you could decide whether to keep it another five years or drop it.
     
    Last edited: Jun 15, 2011
  21. e.bram

    e.bram Guest

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    What happens if the TS is willed to the HOA or developer?
     
  22. DeniseM

    DeniseM Moderator

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    I was wondering the same thing, but I am guessing that just like any heir, they don't have to accept property they don't want.
     
  23. ace2000

    ace2000 TUG Member

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    You mean a HOA or developer wouldn't even want their own unit? LOL - how bad is that???
     
  24. DeniseM

    DeniseM Moderator

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    If they take it back they have to pay the maintenance fees, and then have to try to resale it. In this economy where TS foreclosures are at an all-time high, why would they want to take back a TS with no resale value? The would much rather have a MF paying owner on the hook.
     
  25. Talent312

    Talent312 Tug Review Crew: Rookie TUG Member

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    They might want it back to resell to some neophyte as a "new" TS at full-frieght.
    (Its been done.)

    ---------------------------
    When my ex-wife inherited property from a relative, the heirs selected shares of the deceased's furnishings and effects. They each agreed on who got what and signed a releases.

    One unclaimed item was a large, pink flower vase, about the ugliest thing I'd ever seen. Just as the executor was about to toss it, my ex spoke up for it. I was aghast. But she did us a great kindness by convincing her mother to accept it as a "gift." (At least it didn't carry MF's.)
     
    Last edited: Jun 15, 2011

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