Executor of Estate with FL Timeshare - Disposing of Unwanted Contracts

[DopeyRunr]

TLDR: What is the exit strategy for a beneficiary inheriting two unwanted contracts?

I'm the executor of my NY-resident mother's estate. I'm equal beneficiaries with my two siblings. None of us want the two timeshare contracts at Villas at Regal Palms near Orlando, FL. To deal with them, I am going through ancillary probate in FL. The FL attorney says even if the three of us file letters to disclaim the inheritance, the property will basically follow intestate succession rules in Florida, weaving through the entire family tree of aunts, uncles, nieces, nephews, cousins, etc. to find someone who will take this. He expects this will be a long and costly process. The NY estate is relatively small, it will have about $100K in cash after debts and expenses. He believes those assets could be claimed by the management company if we take a "do nothing and let them foreclose" strategy.

He is recommending one of us three beneficiaries "bite the bullet" and take ownership and figure out how to dispose of it (sell, give away, deed back, etc.)

One of the two contracts is a biennial week, the other is a triennial week. Annual maintenance fees between the two are about $1,000. They transfer into RCI as 132,600 points, and all of those points are available now with the September 1st use year.

I am not expecting the management company (Soleil Management) is willing to take it back once it's titled to one of the beneficiaries.

What are the chances of giving these contracts away (including transferring the RCI points), assuming all closing costs and MFs are paid up? Is there anything more I can offer to make this free offer more attractive? Prepaying 2025 MFs?

It will be several months before we start the FL ancillary probate process, so I'll wait to post in the Free Timeshares forum until I'm in a position to transfer ownership.

Thanks for your help and insight.

 

[Hindsite]

Nobody can be forced to take on a timeshare, that advice is poor.

Do a search of TUG for posts like this as its been answered before and you may get info that you need from those.

 

[DopeyRunr]

I've been searching posts but I haven't found the answers I'm looking for. I'm a Disney Vacation Club owner and figuring out the value of banked points and contracts is very simple. Understanding the value of these two contracts, the accumulated RCI points, etc. is far more opaque, and that's what I'm hoping for some insight on from the experienced members on this board.

To be clear, nobody is being **forced** to take on the timeshare. I'm not sure where you read that in my post. The process for identifying a distributee who is willing to inherit it, however, is likely to be long and costly. As the executor, it's my legal obligation to take this situation to resolution in a way that protects the estate for the beneficiaries.

 

[GrayFal]

Look for posts by @LeslieDet regarding this issue.
use the search function above.
@Hindsite used the word “forced” because people are often intimidated by management companies that the “must” take ownership and pay maintenance fees and this is just not true.

 

[Fido Chuckwagon]

He believes those assets could be claimed by the management company if we take a "do nothing and let them foreclose" strategy.

This seems incredibly unlikely and you may be getting bad advice. Is there a mortgage owed on these properties? If not, and all you are talking about is maintenance fees, the likelihood of any judgment is infinitesimally small (doubly so because FL is a non-judicial foreclosure state and when N-J foreclosure is used deficiency judgments are not allowed), and even if there was a judgment, the most you would ever be looking at would be any delinquent maintenance fees owed. They can't get a judgment for maintenance fees in perpetuity...

 

[DopeyRunr]

Thanks @GrayFal, I have and that's why I think I'm on the right track asking:

What are the chances of giving these contracts away (including transferring the RCI points), assuming all closing costs and MFs are paid up? Is there anything more I can offer to make this free offer more attractive? Prepaying 2025 MFs?

 

[DopeyRunr]

This seems incredibly unlikely and you may be getting bad advice. Is there a mortgage owed on these properties? If not, and all you are talking about is maintenance fees, the likelihood of any judgment is infinitesimally small (doubly so because FL is a non-judicial foreclosure state and when N-J foreclosure is used deficiency judgments are not allowed), and even if there was a judgment, the most you would ever be looking at would be any delinquent maintenance fees owed.

The contracts are owned outright, no mortgage.

Those MFs and property taxes are owed in perpetuity, though, right? I can't close the estate in NY and distribute the assets to beneficiaries while this FL real estate remains unresolved. @LeslieDet has written about the potential legal liability of an executor who tries this.

 

[jp10558]

I'm not a lawyer, but it sure seems like if everyone disclaims inheritance, the timeshare may be able to go after the estate for current MFs, but I struggle to believe it can prevent distribution of the estate inheritance for ~100 years to take all the money in the estate. And even if it did - then what? It goes into foreclosure.

EDIT: so why not have it go into foreclosure over the next 3 years by not paying, set aside ~$3,000 in the most extreme case they try and get MFs legally somehow, and let it foreclose 100 years earlier? They can't hurt the credit of an estate AFAIK.

 

[dioxide45]

This seems incredibly unlikely and you may be getting bad advice. Is there a mortgage owed on these properties? If not, and all you are talking about is maintenance fees, the likelihood of any judgment is infinitesimally small (doubly so because FL is a non-judicial foreclosure state and when N-J foreclosure is used deficiency judgments are not allowed), and even if there was a judgment, the most you would ever be looking at would be any delinquent maintenance fees owed. They can't get a judgment for maintenance fees in perpetuity...

I don't think they can go through non judicial foreclosure in the situation where the current owner is deceased.

 

[DopeyRunr]

I'm not a lawyer, but it sure seems like if everyone disclaims inheritance

This is the time-consuming and costly part. "Everyone" isn't just the three named beneficiaries in FL probate. It would require identifying and contacting everyone in the successor beneficiary order of inheritance and getting documentation from them that they either do or don't want to inherit the property. With no parents, siblings, children or grandchildren in the mix, that leaves a long and complicated process of identifying aunts, uncles, nieces, nephews, cousins, etc. and documenting their disclaimer. Not at all impossible, but also not easy, fast, or cheap.

 

[Fido Chuckwagon]

The contracts are owned outright, no mortgage.

Those MFs and property taxes are owed in perpetuity, though, right? I can't close the estate in NY and distribute the assets to beneficiaries while this FL real estate remains unresolved. @LeslieDet has written about the potential legal liability of an executor who tries this.

As executor you definitely need to make a good faith effort to dispose of the assets. There is certainly disagreement about what constitutes a good faith effort in this regard. What I mean about “perpetuity” though is that, even if this were to go to foreclosure, and even if there was a deficiency judgment granted after auction (incredibly unlikely) they can’t get a deficiency judgment for future maintenance fees. All that would ever be in that judgment would be the money owed as of the date of the foreclosure plus, I suppose, potentially costs and fees.

 

[Fido Chuckwagon]

As executor you definitely need to make a good faith effort to dispose of the assets. There is certainly disagreement about what constitutes a good faith effort in this regard. What I mean about “perpetuity” though is that, even if this were to go to foreclosure, and even if there was a deficiency judgment granted after auction (incredibly unlikely) they can’t get a deficiency judgment for future maintenance fees. All that would ever be in that judgment would be the money owed as of the date of the foreclosure plus, I suppose, potentially costs and fees.

Also, the liability of an executor generally flows from an executor who fails to exercise diligence in identifying and paying legitimate creditors of the estate. I’m unaware of any reported decision anywhere ever of an executor being held liable for failing to find someone willing to accept a timeshare deed.

 

[Fido Chuckwagon]

But to answer your earlier questions, absolutely you should try to give these away on the tug giveaway board. No real downside. I’d also contact the resort and just verbally tell them no heir is willing to accept, will they take a deedback, if not they’re going to have to foreclose. Most resorts, even those without deedback programs, will take one back in these situations since it’s more costly to foreclose.

 

[Fido Chuckwagon]

Just to put a finer point on this, has there ever been a recorded instance on the TUG forums, of someone who went into foreclosure just for unpaid maintenance fees, and ended up with a deficiency judgment? Now add in the fact that this is an estate, this just seems so unlikely as to be functionally impossible, and your risk of ruin is being found liable for maybe a few years of maintenance fees. A court can’t force you to take on this timeshare.

 

[5finny]

Sounds like you are definitely trying to do the right thing (perhaps more so than I would)
On a practical basis offer the timeshares for free on Tug -- offer to pay 2025 Maintenance fees and closing costs
If no one bites offer $1000 to be paid after transaction is completed

One other thing for those Tug owners who own Florida timeshares ( in their own names and not in a trust) could you give an estimate of what a Florida ancillary probate might cost today?

 

[dioxide45]

Just to put a finer point on this, has there ever been a recorded instance on the TUG forums, of someone who went into foreclosure just for unpaid maintenance fees, and ended up with a deficiency judgment? Now add in the fact that this is an estate, this just seems so unlikely as to be functionally impossible, and your risk of ruin is being found liable for maybe a few years of maintenance fees. A court can’t force you to take on this timeshare.

I've only seen it noted about deficiency judgements in a few cases and only on timeshare loans. It also seems that these were situations where the owner enlisted the assistance of timeshare exit companies. So it was more punitive in nature. I doubt any timeshare company would go after a deficiency judgement on only maintenance fees given the usually low dollar amount in default.

 

[VacationForever]

I think based on prior threads, you can't just give away a timeshare when the deceased name is the only name on it without undergoing probate. With probate, someone's name got to be put on the deed. Thereafter that person can give contact the HOA to give it back to them or give away on TUG or anywhere. If unsuccessful, just stop paying MF on it.

 

[dioxide45]

I think based on prior threads, you can't just give away a timeshare when the deceased name is the only name on it without undergoing probate. With probate, someone's name got to be put on the deed. Thereafter that person can give contact the HOA to give it back to them or give away on TUG or anywhere. If unsuccessful, just stop paying MF on it.

Some timeshare entities, like Marriott, will only take a deed back from a living person. This may not be the case for every resort.

 

[CalGalTraveler]

@DopeyRunr They legally cannot go after the estate if you do NOT object to foreclosure for timeshare deeds in Florida. Here is how you should proceed to exit in good faith.

1) Try giving it away on TUG or Facebook but DO NOT TAKE OWNERSHIP or you could be stuck and your credit rating affected. AFAIK as executor the estate can give it away but check with your lawyer. Search for the timeshare on the TUG free giveaway thread and see a free offer needs to be sweetened with free year with your property in past listings. Offer to pay all fees, use a trusted third party escrow such as LT transfers (about $250, $350 if expedited)

2) If that fails. Read the TUG Florida Timeshare laws below and give Florida law to your lawyer who clearly does not understand Florida TS law when it comes to anti-deficiency. This will save the lawyer time researching this and charging you to find this law.

Florida – FL, inaction or non-objection results in estate, anti-deficiency foreclosure, but objection leads to judicial, deficiency action: http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0721/0721.html
https://www.flrules.org/gateway/ChapterHome.asp?Chapter=61B-37

Links to Official State Timeshare Laws and Guides/Manuals

@TUGBrian @DeniseM @CalGalTraveler take a look. This weekend, I’m creating a spreadsheet with official links to states’ timeshare laws, as well as their statuses as to non-judicial, anti-deficiency foreclosures. In the meantime, I will just keep adding notes. * Legal Disclaimer: This list...

tugbbs.com

3) Go to the HOA/Developer (or have your lawyer if you want to pay them). Tell them that no heirs want the timeshare and you tried to give it away (document that you tried to cover yourself). Tell them you are willing to

"give it back to them for free for deed in lieu of foreclosure otherwise you do NOT object to foreclosure. This will save the HOA legal fees and hassle of foreclosure because the estate will have no choice but to walk away so they can foreclose."

If they refuse then walk away. Send a follow up mail in writing indicating that the estate does not object to foreclosure and the offer of deed in lieu. Unless they are offering free deed in lieu, do not respond or you could risk being seen as objecting and then they can potentially go after assets for anti-deficiency.

Do not talk to bill collectors. If bill collectors call tell them legally to stop calling (they must conform per the law and only send letters).

After you are behind a year or two. Follow up with HOA again and offer deed in lieu but don't object to foreclosure if they refuse.

You will be rid of this in a few years either by deed in lieu or foreclosure if you do nothing.

YMMV we are not lawyers but a lawyer developed the TS law thread above and it should be considered akin to a legal journal not legal advice.

 

[CalGalTraveler]

Some timeshare entities, like Marriott, will only take a deed back from a living person. This may not be the case for every resort.

Sounds like an excuse by MVC. Why can't the executor who is charged with dispensing the estate give it away if no heirs want it?

 

[Shiba]

Can the family legally give it away since the owner is deceased? The deceased owner cannot sign over title.

 

[Fido Chuckwagon]

I think based on prior threads, you can't just give away a timeshare when the deceased name is the only name on it without undergoing probate. With probate, someone's name got to be put on the deed. Thereafter that person can give contact the HOA to give it back to them or give away on TUG or anywhere. If unsuccessful, just stop paying MF on it.

The OP has already stated they opened an ancilliary probate in FL. So they've already done that step.

 

[Fido Chuckwagon]

Can the family legally give it away since the owner is deceased? The deceased owner cannot sign over title.

That's what probate is for. The executor of the estate can convey title once letters testamentary are issued via the supplemental probate in FL.

 

[VacationForever]

The OP has already stated they opened an ancilliary probate in FL. So they've already done that step.

Yes, but with probate, someone has to take title. You don't just open probate and then nothing. I don't know if you can leave it hanging while you look for someone to take the timeshare or to have the resort take it back.

 

[Fido Chuckwagon]

Yes, but with probate, someone has to take title. You don't just open probate and then nothing. I don't know if you can leave it hanging while you look for someone to take the timeshare or to have the resort take it back.

Right, but if the OP is looking to give it away or deed it back, they can do that, because they've opened probate and presumably received letters testamentary.