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How to keep my kids from inheriting my timeshare ?

VacationForever

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Thank you so much! Yes it is a revocable living trust......and kids are listed as successor trustees. .the timeshare folks are as confused as we all are...years ago Marriott told me that if the kids were not in the trust or on the deeds they would not be be able to take advantage of any of the vacation points attached to the timeshares that is , if they just inherited the properties they could not use them to pile up vacation points or for trades to other vacation spots. ...I had to move heaven and earth to get them all deeded the same way I had to find an attorney in Hawaii and California. That is why we put them into the trust. So anyway...this is another point to consider that the timeshare entity may not honor your vacation club points if you just inherit them outright. I have discussed this at length with Marriott and can't get any definitive information. Thank you !
Children inherit full rights, using trust or no trust, on deed or not on deed.
 
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jpd88

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I am in the process of buying a 1 BD unit in Hawaii, Lawai Beach Resort. Could someone help me figure out how to keep my kids from inheriting the timeshare? I am attaching a picture of the choices on the initial paperwork. Wondering if I need to put the kids in a “trust” so that they have the decision to not inherit if they don’t want it, or is choosing the “joint tenant” option for my husband and I sufficient. They are our beneficiaries in our will. This timeshare cannot be deeded back to the resort and I would rather not burden the kids with the maintenance fees, unless they wanted to. I would like to ensure that the kids have the option of not inheriting it.
Just make a will (with the help of an attorney) and specify that you're leaving the timeshare to Bernie Sanders of Vermont. I'm sure he'll appreciate it.
 

jpd88

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Write a will (using an attorney) and specify that you're leaving your timeshare to Bernie Sanders of Vermont.
 

KossB

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Children inherits full rights, using trust or no trust, on deed or not on deed.

This statement is a little too broad, and it may not be accurate in some cases.

A deeded timeshare is a piece of real estate, and anyone who lawfully acquires that piece of real estate, whether by purchase, gift or inheritance, will, in general, have all the same rights and privileges as the previous owner.

But when the timeshare is a club membership, it is clearly possible for the timeshare company to put limitations or restrictions on what can be sold, transferred or inherited. You can read all it about here on the TUG BBS. There are many, many discussions of how various timeshare companies have imposed restrictions on resale. Owners who bought their timeshare as a resale sometimes don't get all the rights and privileges that the original owner had.

Whether this is fair, and whether it is legal, are very interesting questions, and perhaps some of these restrictions could be challenged in court. But it is very clear that with vacation club memberships, some companies have adopted rules that place restrictions on exactly what can be sold, transferred or inherited.

Suppose you become a member of a fancy country club where you play golf. Some clubs have a one-time initiation fee of $5,000, or $25,000, or even more. And the monthly dues can be hundreds or thousands of dollars. At many of these clubs, you cannot even join unless two or three existing members sponsor you.

This type of club membership often cannot be transferred to anyone at all--not even through an inheritance. The governing documents simply say that the membership, and all its rights and privileges, terminate upon the death of the member.

I don't think any of the vacation clubs go that far. This whole thread began because the problem seems to be the opposite. Many timeshares are perpetual, and the terms of the contract often go beyond the death of the owner. But especially when it is NOT real estate, the terms of the contract can limit what aspects of the timeshare can be transferred.

What Marriott told joybeckerly is not completely irrational. If the timeshare is held in a trust, then the trust, as a legal entity similar to a corporation, can pile up unused points or whatever, and the trustee can simply authorize one or more beneficiaries to use them, and that process continues, beyond the death of the original purchaser, as long as the timeshare stays inside the trust--even if the identity of the trustee changes, and even if the beneficiaries change. But if the timeshare is distributed out of the trust, to one or more beneficiaries, then that is a change in ownership that could cause the loss of accumulated points.

This might be a reason, in some cases, to put a timeshare in a trust. But the trust would have be designed to continue after the death of the original owner, at least until the accumulated points are used up. If the trust required complete dissolution and distribution of all the assets immediately after the death, then that would defeat the purpose.

I have no idea what kind of restrictions Marriott has on the particular timeshare that joybeckerly owns. This is all educated speculation. My family has one deeded timeshare, and it actually is in a trust. We're not worried about what happens after the death of the original owner. If none of the beneficiaries wants it, we're pretty sure the resort will take it back, or the trustee will find someone else to give it away to (maybe here on the TUG BBS lol).

I don't mess around with clubs and points, so my understanding of those systems is extremely limited. But you'll find all kinds of threads on here about restrictions imposed on resale buyers.

BMK
 
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VacationForever

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This statement is a little too broad, and it may not be accurate in some cases.

A deeded timeshare is a piece of real estate, and anyone who lawfully acquires that piece of real estate, whether by purchase, gift or inheritance, will, in general, have all the same rights and privileges as the previous owner.

But when the timeshare is a club membership, it is clearly possible for the timeshare company to put limitations or restrictions on what can be sold, transferred or inherited. You can read all it about here on the TUG BBS. There are many, many discussions of how various timeshare companies have imposed restrictions on resale. Owners who bought their timeshare as a resale sometimes don't get all the rights and privileges that the original owner had.

Whether this is fair, and whether it is legal, are very interesting questions, and perhaps some of these restrictions could be challenged in court. But it is very clear that with vacation club memberships, some companies have adopted rules that place restrictions on exactly what can be sold, transferred or inherited.

Suppose you become a member of a fancy country club where you play golf. Some clubs have a one-time initiation fee of $5,000, or $25,000, or even more. And the monthly dues can be hundreds or thousands of dollars. At many of these clubs, you cannot even join unless two or three existing members sponsor you.

This type of club membership often cannot be transferred to anyone at all--not even through an inheritance. The governing documents simply say that the membership, and all its rights and privileges, terminate upon the death of the member.

I don't think any of the vacation clubs go that far. This whole thread began because the problem seems to be the opposite. Many timeshares are perpetual, and the terms of the contract often go beyond the death of the owner. But especially when it is NOT real estate, the terms of the contract can limit what aspects of the timeshare can be transferred.

What Marriott told joybeckerly is not completely irrational. If the timeshare is held in a trust, then the trust, as a legal entity similar to a corporation, can pile up unused points or whatever, and the trustee can simply authorize one or more beneficiaries to use them, and that process continues, beyond the death of the original purchaser, as long as the timeshare stays inside the trust--even if the identity of the trustee changes, and even if the beneficiaries change. But if the timeshare is distributed out of the trust, to one or more beneficiaries, then that is a change in ownership that could cause the loss of accumulated points.

This might be a reason, in some cases, to put a timeshare in a trust. But the trust would have be designed to continue after the death of the original owner, at least until the accumulated points are used up. If the trust required complete dissolution and distribution of all the assets immediately after the death, then that would defeat the purpose.

I have no idea what kind of restrictions Marriott has on the particular timeshare that joybeckerly owns. This is all educated speculation. My family has one deeded timeshare, and it actually is in a trust. We're not worried about what happens after the death of the original owner. If none of the beneficiaries wants it, we're pretty sure the resort will take it back, or the trustee will find someone else to give it away to (maybe here on the TUG BBS lol).

I don't mess around with clubs and points, so my understanding of those systems is extremely limited. But you'll find all kinds of threads on here about restrictions imposed on resale buyers.

BMk
The topic is on timeshare. Various timeshare companies which I am familar with like Marrriott and Vistana transfer full rights to children.
 

terrygee

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Just DO NOTHING.
When the maint fees go unpaid they'll come after you...or your estate.
HaHaHa.
 

mtwingcpa

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This may be a ridiculous question, but can you name the HOA as the beneficiary of the Timeshare?

I have long thought that would be a viable strategy for a timeshare that heirs don't want.

If the timeshare is deeded, many states now allow the inclusion of a "transfer on death" beneficiary on said deed. So simply name the HOA (being very careful to get the name correct) as the TOD beneficiary.
 

mtwingcpa

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Most of what you have been told in this thread is accurate. A trust is not the appropriate mechanism if your goal is to avoid having your children inherit your timeshare. There may be other reasons to set up a trust, but that is something you would need to discuss with an attorney. And not just any attorney, but an attorney who specializes in estate planning.

I guess I don't see a general problem with using a trust per se, but I would make it a SEPARATE TRUST containing nothing but the timeshare (plus maybe a small amount of cash). And I would name the HOA as the residual beneficiary of said trust, making it clear that the sole function of the trust is to distribute the timeshare upon your death.

Meanwhile, I definitely agree that it would be best NOT to include the timeshare (or other "problem" assets) in a living trust with the rest of your estate. Hopefully this will prevent any issues related to the timeshare from slowing down/interfering with the overall distribution of your estate.
 

riverdees05

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We are down to three timeshares. One Deeded in TN, state where we live, One Deeded in FL and one Right to Use in CA. My question is will both the one in FL and in CA need to be probated?
 

vacationtime1

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We are down to three timeshares. One Deeded in TN, state where we live, One Deeded in FL and one Right to Use in CA. My question is will both the one in FL and in CA need to be probated?

Yes -- if the interests are deeded. And if they are deeded, your executor will need to file ancillary probate proceedings in CA and FL.

Note: Ancillary probates would not be required if the FL and CA timeshares were owned by a trust.
 

CalGalTraveler

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For the Florida and California properties your estate could simply walk because deeds are protected by anti-judicial, anti-deficiency laws. See the sticky under state timeshare laws. Heck you don't need to wait until you die if you don't mind your credit taking a hit and nasty bill collector calls. Not sure about TN. Your kids should not accept the timeshare and the executor and heirs should not object to the timeshare going to foreclosure (best to avoid talking to them or have a lawyer represent to avoid being tricked and trapped into deficiency suit in Florida. In Calif. it doesn't matter.)

 
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jpd88

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As of a recent podcast by Clark Howard - whom I consider an expert on travel & money - he is very, very disappointed in just about everything pertaining to Marriott. Marriott has changed a lot in the last few years and all of the changes are considerably detrimental to customers (TIMESHARE owners included as well as BONVOY Card holders). I'm going to rid myself of two Maui Marriott timeshares that I've owned since 1999 and will also get rid of both my and my wife's Bonvoy Premier Visa cards. As a former military officer I have been impressed with Marriott's treatment of military service members ...from the 1970's onward....until recently. There must have been a management change within the last few years.
 

callwill

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For the Florida and California properties your estate could simply walk because deeds are protected by anti-judicial, anti-deficiency laws. See the sticky under state timeshare laws. Heck you don't need to wait until you die if you don't mind your credit taking a hit and nasty bill collector calls. Not sure about TN. Your kids should not accept the timeshare and the executor and heirs should not object to the timeshare going to foreclosure (best to avoid talking to them or have a lawyer represent to avoid being tricked and trapped into deficiency suit in Florida. In Calif. it doesn't matter.)

Wondering what they do to trick and trap one into the deficiency suit in Florida.
 

rickandcindy23

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As of a recent podcast by Clark Howard - whom I consider an expert on travel & money - he is very, very disappointed in just about everything pertaining to Marriott. Marriott has changed a lot in the last few years and all of the changes are considerably detrimental to customers (TIMESHARE owners included as well as BONVOY Card holders). I'm going to rid myself of two Maui Marriott timeshares that I've owned since 1999 and will also get rid of both my and my wife's Bonvoy Premier Visa cards. As a former military officer I have been impressed with Marriott's treatment of military service members ...from the 1970's onward....until recently. There must have been a management change within the last few years.
I don't see how using your timeshares as you always have is going to be any different. Can you expand on that theory? We don't even own Destination Club points and love our trading power with Marriott weeks that we own.
 

dago

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I am not an attorney. But I am a tax advisor, and I am familiar with the basic principles of estate law.

Most of what you have been told in this thread is accurate. A trust is not the appropriate mechanism if your goal is to avoid having your children inherit your timeshare. There may be other reasons to set up a trust, but that is something you would need to discuss with an attorney. And not just any attorney, but an attorney who specializes in estate planning.

It is generally true that if you leave the timeshare to someone in your will, that person has the right to refuse to accept the inheritance. They do that by sending written notice to the executor of your will. The executor then offers that property to the next person in line. If no one else is identified in your will, then it would probably be offered to the next heir according to state law. So it could pass to your children's children, or a distant cousin or something. But they also have the right to refuse it.

If no one will accept it, then by law, the estate will continue to be the owner. The resort may agree to take it back--even though they claim they don't do that--because if the estate has no money or other assets, and it can't pay the bills for the maintenance fees, then the resort has only two choices: take it back or go through foreclosure. And guess which one is easier and cheaper?

When you die, the estate becomes the legal owner of all your property. It is the responsibility of the executor of your will to distribute that property to your heirs. But the executor also has to use money and other assets in your estate to pay your bills. For example, the executor is expected to use money in your estate to pay the mortgage on your house until it is sold or refinanced by whoever is going to inherit it. And they are expected to use money in your estate for things like your funeral expenses. As long as there is money available, or something that is easy to sell, such as stocks and bonds, your estate will be required to pay the maintenance fees on the timeshare. And they have to pay current bills before distributing money or other assets to your heirs.

But the key point is that the executor cannot force anyone to accept the timeshare. And the executor cannot be expected to hold the estate open indefinitely. Once everything else is settled, and the most recent timeshare bill has been paid, and the resort has not yet sent out the next bill, the executor will distribute all the remaining money and other assets to your heirs--except for the timeshare which no one will accept. And then the estate will own nothing except the timeshare, and it will be unable to pay the next bill from the resort. The executor will inform the resort that none of the heirs will accept the timeshare, and that the estate has no funds to pay the fees. It is at that point that the resort will begin to seriously consider simply taking it back instead of filing suit or starting a foreclosure proceeding.

But you won't have to deal with any of that. (LOL) You won't be around anymore when that happens.

One of the core concepts here is that the estate functions as an independent legal entity, separate from the heirs, separate from the person who died, and separate from the executor. The estate comes into being when the person dies. It is a lot like a corporation, and the executor serves in a role that is similar to the president of a corporation.

BMK
Thanks @KossB We are updating our revocable trust with a lawyer this year and there will be a pour over in assets for a special needs trust to a disabled family member. We would hate for this disabled family member to be burdened with this.
 

Talent312

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Our wills contain this provision:
"The following applies to any property that may be classified as a timeshare: If my wife/husband does not survive me, then [named beneficiaries] who survive me shall be asked to accept each timeshare and those who accept shall be given the same in equal shares; provided, however, that if any beneficiary disclaims or fails accept an interest in a timeshare within 60 days of my death, his or her share shall be given to those who accept in equal shares. If all beneficiaries disclaim or fail to accept a timeshare, my Personal Representative shall dispose of the timeshare by sale, gift, deed-back, foreclosure or abandonment, at his sole discretion."

... but I also like the idea of making each HOA a contingent beneficiary, as it give the executor more guidance.
.
 
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Patri

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Our wills contain this provision:
“If all beneficiaries disclaim or fail to accept a timeshare, my Personal Representative shall dispose of the timeshare by sale, gift, deed-back, foreclosure or abandonment, at his sole discretion."

... but I also like the idea of making each HOA a contingent beneficiary, as it give the executor more guidance.
.
Still a nuisance for the kids, personal rep. I hope you have explained to them clearly how to abandon or let it foreclose. The other choices involve bureaucracy, perhaps a cost against the estate, or a risk of scamming.
 
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