Timeshares to your heirs

[Dean]

No. What I'm saying is all of the wanted assets are in the main trust. Everything else is the personal property of the estate.

Bill

Then wouldn't any timeshare not in the trust have to go through probate AND potentially limit the disposition of the estate? I've seen people discuss having a separate trust for the timeshares but that seems a bit much to me.

 

[easyrider]

Then wouldn't any timeshare not in the trust have to go through probate AND potentially limit the disposition of the estate? I've seen people discuss having a separate trust for the timeshares but that seems a bit much to me.

It could but when the Trust has all of the assets, and the personal property of the estate in the WILL is less than the State requirement for probate, there isn't a need for probate. In my state the minimum State requirement for probate is $100,000. In this scenario the timeshares are personal property outside of the Trust. The object of the trust is to secure all assets, not liabilities. A timeshare is a liability, imo. If the timeshare is actually wanted by a family member they can still have it outside of the Trust or it eventually gets taken back for lack of maintenance fee payment. The repossession of the timeshare can also happen while the owner is alive if the owner decides to stop paying the maintenance fee without affecting the Trust assets only when the timeshare is held outside the Trust.

Again, this isn't legal advice and some people would consider this timeshare disposal strategy to be unfair to the developers but in a way it's the developers own fault for their inability to provide an exit to ownership.

Bill

 

[Dean]

It could but when the Trust has all of the assets, and the personal property of the estate in the WILL is less than the State requirement for probate, there isn't a need for probate. In my state the minimum State requirement for probate is $100,000. In this scenario the timeshares are personal property outside of the Trust. The object of the trust is to secure all assets, not liabilities. A timeshare is a liability, imo. If the timeshare is actually wanted by a family member they can still have it outside of the Trust or it eventually gets taken back for lack of maintenance fee payment. The repossession of the timeshare can also happen while the owner is alive if the owner decides to stop paying the maintenance fee without affecting the Trust assets only when the timeshare is held outside the Trust.

Again, this isn't legal advice and some people would consider this timeshare disposal strategy to be unfair to the developers but in a way it's the developers own fault for their inability to provide an exit to ownership.

Bill

What are the chances of anyone having less than $100K in assets in this situation by the time you consider autos, cash, taxable account, furniture, etc. I can't speak to the requirement in general. In FL I don't think there's a minimum for probate though there is a limit where summary administration is applicable, basically a simplified version. Last I saw for FL that limit was $75K as the total value.

 

[easyrider]

What are the chances of anyone having less than $100K in assets in this situation by the time you consider autos, cash, taxable account, furniture, etc. I can't speak to the requirement in general. In FL I don't think there's a minimum for probate though there is a limit where summary administration is applicable, basically a simplified version. Last I saw for FL that limit was $75K as the total value.

It's not up to chance. It's a plan. Anything of value, including all personal property, are in the Trust. All of the liabilities are kept as personal property. A liability is anything with debt which includes a maintenance fee. The other issue is the executor is responsible to place a value on the personal property. It seems reasonable that most timeshares have no value.

Even if there are assets to probate, it doesn't affect how the Trust is distributed or the requirement of the executor to notify creditors by public notice. My main point is using public notice, the resort has up to four months to respond, and even if they did, the debtor is dead. Their recourse is to take it back. It might be even better to stop paying the maintenance fee at a certain age and allow the resort to take them back while a person is alive.

Again, this isn't legal advice and some people would consider this timeshare disposal strategy to be unfair to the developers but in a way it's the developers own fault for their inability to provide an exit to ownership.

Bill

 

[jp10558]

What are the chances of anyone having less than $100K in assets in this situation by the time you consider autos, cash, taxable account, furniture, etc. I can't speak to the requirement in general. In FL I don't think there's a minimum for probate though there is a limit where summary administration is applicable, basically a simplified version. Last I saw for FL that limit was $75K as the total value.

I'm not going to give legal advice either - but what worked really well for my grandmother (and we're in the process of replicating with my mother) is to transfer all real property well before death - this is what the trust is, though my grandmother just gave it to her kids. That could be simpler / cheaper if you trust your kids to not kick you out. If not, Trust all the way. Anyway, so when you die you're basically insolvent as all assets are already disposed of. Easy peasy, no where near $100k in assets. Personally, I recommend this strategy - you get to make sure your assets go to who you want them to go to - way less options for "well, mom didn't say in the will, but would have wanted X" arguments. They can just ask you. And even better, if you do the trust or disbursement NOW, you do it while you're mentally competent and sharp, so again, you can make the decisions you feel are best with all the facts. You also IMHO protect yourselves and kids from losing a house or whatever to nursing homes etc. As far as I can tell, the only real disadvantage to this is actually having to think about it and spend the lawyer money NOW vs leaving a mess for your executor / kids.

On the TS angle, I've gone back and forth on putting them in their own trust. I don't think they're worth the thousands of dollars that would cost. What I do intend to do is if they ever stop working for me, I plan to give them away on TUG if possible given I paid so little up front (all resale) and I want to pay that forward to future owners. I actually think they're a great deal IF you learn to use them effectively and you like to go on trips and can do so. Like so many on TUG, I've already more than broken even by my calculations and certainly they've caused me to go on way more trips and enjoy lots of resorts.

 

[1Kflyerguy]

Our regular trust includes our timeshares with all of our other main assets. We decided to go that route based on what I read and a conversation with our estate attorney at the time. Our attorney felt that more expensive timeshares such as Hawaii etc would benefit from being in a trust. Now, 15 years later, our original attorney has retired, and when we updated our trust with a new attorney, he was not as big a fan of that approach and raised some of the issues Dean mentioned. Not to mention that some of the timeshares have not held their resale value over the past few years.

We did keep the timeshares in the revised trust. I am not sure if my son will want the timeshares or not. I will discuss that with him at some future point, but the plan will be to sell or give them away once we stop using them, if he does not want them.

 

[Dean]

On the TS angle, I've gone back and forth on putting them in their own trust. I don't think they're worth the thousands of dollars that would cost. What I do intend to do is if they ever stop working for me, I plan to give them away on TUG if possible given I paid so little up front (all resale) and I want to pay that forward to future owners. I actually think they're a great deal IF you learn to use them effectively and you like to go on trips and can do so. Like so many on TUG, I've already more than broken even by my calculations and certainly they've caused me to go on way more trips and enjoy lots of resorts.

This was our take as well. Not worth the cost to do so in creating a trust and managing it yearly. We've orchestrated our life such that the only things that will be in probate are our timeshares currently, cars, minor stuff. Checking POD to children, all IRA's with beneficiaries, House TOD deed to daughter, Living Will, Power of attorney (medical and durable). We do plan to change the timeshares at some point but only once we're sure we can leave enough assets so they are a blessing and not a curse. If they end up in probate before then so be it. Thanks all for the discussion.

 

[1Kflyerguy]

I'm not going to give legal advice either - but what worked really well for my grandmother (and we're in the process of replicating with my mother) is to transfer all real property well before death - this is what the trust is, though my grandmother just gave it to her kids. That could be simpler / cheaper if you trust your kids to not kick you out. If not, Trust all the way. Anyway, so when you die you're basically insolvent as all assets are already disposed of.

I think the main downside to giving assets away prior to death is that kids or other recipients won't receive the step-up in cost basis, which can result in a lot of additional taxes when the assets are ultimately sold.

 

[rapmarks]

What are the chances of anyone having less than $100K in assets in this situation by the time you consider autos, cash, taxable account, furniture, etc. I can't speak to the requirement in general. In FL I don't think there's a minimum for probate though there is a limit where summary administration is applicable, basically a simplified version. Last I saw for FL that limit was $75K as the total value.

If items are in the trust, then they don’t go through probate, or if they are in a payable at death, Will auto and furniture be worth over 100,000

 

[daviator]

I'm not an attorney, but I think most trusts of this sort are set up with an accompanying "pour over will" in which, at death, all the other posessions, money, vehicles, etc. which are outside of the trust are transferred to the trust. The result is an "empty estate" which does not require probate, and everything gets distributed according to the terms of the trust.

So if you have tried to intentionally leave your timeshare VOIs outside of your trust, be sure that your will does not circumvent your wishes by transferring them (along with everything else) into the trust when you die.

@easyrider suggests that leaving timeshares outside the trust to be foreclosed upon after death is unfair to the developer. It's not, it's unfair to the HOA and to other owners. The HOA/VOA – owned by the weeks owners – is the entity that has to deal with unpaid maintenance fees (and essentially charge all the other owners for them) and go through the expense of foreclosure. At most of the MVC properties, there is an agreement with the developer and once the HOA recovers ownership of a VOI, they give it to MVC who can resell it, but also MVC starts covering the MFs from that point. So MVC essentially BENEFITS from foreclosures (they eventually get the inventory back on their shelf, free of charge!) and hurts the other owners who have to pay the missing MFs and the legal fees to foreclose.

 

[Dean]

If items are in the trust, then they don’t go through probate, or if they are in a payable at death, Will auto and furniture be worth over 100,000

if there are enough assets to make this a real issue I think it likely there are enough miscellaneous assets to reach the level to require probate. My info for FL is that Probate is required regardless but that it's much less involved under $75K.

 

[Fasttr]

I'm not an attorney, but I think most trusts of this sort are set up with an accompanying "pour over will" in which, at death, all the other posessions, money, vehicles, etc. which are outside of the trust are transferred to the trust. The result is an "empty estate" which does not require probate, and everything gets distributed according to the terms of the trust.

I’m not sure this is true. While the pour over will directs where the assets go per the will, if the probatable assets of the estate are of sufficient size, the probate process may still be needed to validate your will, manage the transfer process, etc.

It’s best to list your trust as a beneficiary, or contingent beneficiary as the case may be, as a probate avoidance process, for things like bank accounts, taxable brokerage accounts, life insurance proceeds, etc., to keep your probatable assets as small as possible.

** I’m not an attorney either.

 

[rapmarks]

if there are enough assets to make this a real issue I think it likely there are enough miscellaneous assets to reach the level to require probate. My info for FL is that Probate is required regardless but that it's much less involved under $75K.

When my husband died, my lawyer said I didn’t need to go through probate, everything was in trust or had a beneficiary. I live in Florida.

 

[Dean]

When my husband dies, my lawyer said I didn’t need to go through probate, everything was in trust or had a beneficiary. I live in Florida.

As long as there are no other assets that would be true.

Florida law requires formal probate proceedings for any estate worth more than $75,000. If the estate is worth less than $75,000, or if the person has been deceased for over two years, it may qualify for a shorter version of probate called Summary Administration.

 

[easyrider]

We did keep the timeshares in the revised trust. I am not sure if my son will want the timeshares or not. I will discuss that with him at some future point, but the plan will be to sell or give them away once we stop using them, if he does not want them.

What I think is that the timeshare in the Trust will need to be dealt with. If the family members don't want them then the person in charge of the Trust will have to give it back if that is even an option or give it away. Either option forces your Trustee to take extra time and adds an extra cost.

If the timeshares are not in the Trust, the Executor of the WILL can pay the $50 to place a public notice in a newspaper and after four months be done with it if no creditors reply. If a Timeshare creditor does reply, the WILL Executor can provide a death certificate and allow the timeshare to be taken back with a quit claim if the creditor doesn't want to go through the foreclosure process. If the timeshare isn't deeded and is a points or credits membership they just cancel the membership.

Again, this isn't legal advice and some people would consider this timeshare disposal strategy to be unfair to the developers, hoa's and other owners but in a way it's the developers fault for their inability to provide an exit to ownership.

Bill

 

[easyrider]

@easyrider suggests that leaving timeshares outside the trust to be foreclosed upon after death is unfair to the developer. It's not, it's unfair to the HOA and to other owners. The HOA/VOA – owned by the weeks owners – is the entity that has to deal with unpaid maintenance fees (and essentially charge all the other owners for them) and go through the expense of foreclosure. At most of the MVC properties, there is an agreement with the developer and once the HOA recovers ownership of a VOI, they give it to MVC who can resell it, but also MVC starts covering the MFs from that point. So MVC essentially BENEFITS from foreclosures (they eventually get the inventory back on their shelf, free of charge!) and hurts the other owners who have to pay the missing MFs and the legal fees to foreclose.

Unfortunately, this is how it works. Many resort systems are trying to go to points systems instead of a deeded ownership to reduce costs of taking a timeshare back.

It may seem selfish but I'm looking out for my family way before looking out for a resort system that traps me into ownership with no easy exit program. Really, it's a shame on them situation for making their problem ours.

Bill

 

[jancurious]

Well thank you everyone for weighing in on this issue. I'm more convinced since beginning this thread that we will try to offer the timeshare weeks again to our grown children when the first person dies and then sell them at that time. But I loved the advice to put in the letter attached to our estate plan to log-in to tugs and offer them for free in case we both die simultaneously.

Also, you should do an AI search about how much of an estate avoids probate as it changes over time. In California, estates valued at $208,850 or less (for deaths occurring on or after April 1, 2025) can typically avoid formal probate. If you are sure your bank and brokerage accounts have been designated as (POD) pay on death or (TOD) transfer on death to your heirs, most people can avoid probate on the pour over stuff.

Also.... in most cases don't transfer your appreciated assets before you die as the step-up in basis rules can save your heirs large amounts in tax savings when they are sold after your death.

Jan

 

[rapmarks]

Good points Jan.

 

[jimf41]

Anything of value, including all personal property, are in the Trust. All of the liabilities are kept as personal property.

Not so in NY anyway. I doubt any where else either. What is specifically written in the trust is in the trust is in the trust, anything else is in the will. You do not have to accept anything you inherit in the will. I would not put timeshares in a trust.

 

[easyrider]

Not so in NY anyway. I doubt any where else either. What is specifically written in the trust is in the trust is in the trust, anything else is in the will. You do not have to accept anything you inherit in the will. I would not put timeshares in a trust.

I agree 100% Jim.

What I posted meant to me that the things I think are valuable are in my Trust. Everything else is in my WILL. I don't find my timeshares having any monetary value so they are in my WILL as personal property that any of my heirs can have if they like. If they don't want them , which they don't, the executor of my WILL will place a public notice to creditors and after four months they will not belong to anyone and the timeshare will eventually go back to the resort systems in which they came from.

Bill

 

[pedro47]

I would not leave my timeshare to anyone.

 

[dioxide45]

Not so in NY anyway. I doubt any where else either. What is specifically written in the trust is in the trust is in the trust, anything else is in the will. You do not have to accept anything you inherit in the will. I would not put timeshares in a trust.

Shouldn't everything go into the will? The will just designates who the deceased wanted to have the item. The trust is the entity owns the items. The trust is primarily there to make transferring the items easier and avoiding probate. You still don't have to accept something inherited that is in a trust, it just makes it a little more problematic for the trustee to close everything down if the timeshare hasn't been transferred to anyone.

 

[easyrider]

You still don't have to accept something inherited that is in a trust, it just makes it a little more problematic for the trustee to close everything down if the timeshare hasn't been transferred to anyone.

This is my thought too. If no one wants the timeshare in a Trust , the Trustee still has a fiduciary duty to dispose of it. If the timeshare is in the WILL, it's pretty easy to do the public notice and be done with it if no one wants it when there isn't many assets left as personal property in the WILL.

Bill

 

[rapmarks]

You have to title anything that is in the trust. Listing things in the trust doesn’t do any good
You have to have the property, house, bank or brokerage accounts titled in the trust and show the trust or an affidavit of trust when you open them. So if you want a timeshare in the trust, you have to do that step, you can’t just list it in the trust.
There are people that pay for a trust but never transfer anything into it.
If everything is in the trust or payable on death, you don’t have much to probate and possibly nothing to probate.
I don’t know if leaving a timeshare out of the trust is easier. Leslie Det would say no.

 

[dioxide45]

This is my thought too. If no one wants the timeshare in a Trust , the Trustee still has a fiduciary duty to dispose of it. If the timeshare is in the WILL, it's pretty easy to do the public notice and be done with it if no one wants it when there isn't many assets left as personal property in the WILL.

Bill

I am not sure what you mean about public notice. In an estate or in a trust, someone still has a responsibility to dispose of the asset or item. That doesn't change. A will is also not a legal entity, it doesn't hold anything. What is left after someone passes becomes part of their estate. Not really any different than a trust, except items in a trust are easier to transfer without the need of probate. They all still require disposition.