Transferring Timeshares Under a Living Trust
A living trust is a legal entity that is created during a person’s lifetime. The person who creates the trust, called a “trustor” or “settlor,” specifies who will receive the property held in the trust upon his death. If a person intends to leave her timeshare to her heirs through her living trust, it is important that she transfer her timeshare interest into the trust. If the person acquired the timeshare by way of a deed, the person must sign a new deed transferring the timeshare to her trust. If the timeshare is held by way of a lease or contract, the trust owner must list that timeshare as part of the trust property and assign her interest in the timeshare to her trust with an assignment form an Assignment of Ownership Interest.
Transferring Timeshares Under a Will
Similar to a trust, a will is a document created during a person’s life that leaves property to named individuals upon death. Unlike with a trust, the person who creates the will does not sign a deed or, if the timeshare is held by a lease or contract, sign an Assignment of Ownership Interest form. All that is required is language in the will that specifies the timeshare and the beneficiary who will ultimately receive the timeshare. The will must usually go through a court process called probate before the beneficiaries under the will can receive the timeshare interest.
Transferring Timeshares with Joint Ownership
It is possible to own a timeshare with more than one person. This form of ownership is often referred to as joint ownership. If ownership of the timeshare is held by way of a deed, the timeshare owner could sign a deed transferring the timeshare to herself and to her heirs as joint tenants. Joint tenancy allows one co-owner’s interest to automatically pass to the surviving joint tenants without probate. If the timeshare is owned by way of a lease or contract, the timeshare owner can make the ownership change through the timeshare company. It is important to note that there may be serious tax consequences involved with changing ownership to add the heirs. A timeshare owner considering this option should first consult with a tax professional.
Transferring Timeshares Through Probate
A timeshare interest can be passed to the owner’s heirs through probate without establishing a will, trust, or a joint ownership arraignment, but there are a number of disadvantages to this option. First, the probate process can take months and even years to conclude, and the court will not transfer the timeshare interest to the heir until the court process is over. Second, the probate court imposes a number of fees when handling a person’s estate. Those fees are paid out of the deceased person’s property before any property is transferred to the heirs. If there is not enough cash to pay the probate fees, the court could sell the timeshare to generate the funds. Finally, the court will distribute the timeshare interest only to those heirs specified under state law, which may not match the wishes of the timeshare owner.