Benny L. Kass
February 22, 2013
Q: My time-share maintenance fees exceed $2,000 per year. While this does not cause a real hardship on me, I was wondering what happens to the time-share ownership if the primary deed owner dies. When I die (I'm 80 now), I assume the time-share points go into my estate. And, if they do, does that obligate my heirs to continue to pay the annual maintenance fees in perpetuity?
A: I wish I had a dollar for every time-share question I receive from readers. I would take all of that money and buy all the time shares in the United States.
I am not picking only on you. People get enthusiastic about the many claims made by time-share salesmen, and sign up to buy into a week or two (or points) at some luxurious resort somewhere in the world. Sounds good, and in many cases, people have made good use and enjoyed their purchase.
But what consumers do not realize is that this is an investment (to use your words) in perpetuity.
Yes, you and your estate and your heirs will be obligated to continue to pay the maintenance fee, and as the time-share property depreciates in value, I suspect that this fee will also increase — in perpetuity.
I have learned from countless readers that it is next to impossible to sell a time share. Churches and other religious congregations don't want them as charitable contributions. A priest once wrote me, urging me not to suggest that readers give their time-shares to his religious association.
I actually thought I had found a group that would take charitable contributions, but looking at the web under "donate a time share to charity," it turns out that there were many negative comments about that company, which I will not name.
So, what can you do? My suggestion: Keep paying the maintenance fee. On your death, leave instructions that your estate administrator is not to make any payments or other arrangements with the time-share operation. What will happen? Either the time-share company will agree to take back the deed or cancel the points (in lieu of foreclosure), or it will foreclose.
What's the consequence? First, no adverse credit rating will impact your heirs since they are not being foreclosed upon. Second, the time-share lender will foreclose and, depending on your state law, the lender may or may not be able to get any deficiency (the difference between what is owed and what the foreclosure sold for) from the estate.
While I am always reluctant to recommend letting property go to foreclosure because of the long-term adverse consequences, with time-shares — and an estate — I am willing to recommend that, but only as a last resort.
Talk to your attorney about your specific situation.
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