The benefits of owning a timeshare are numerous, and it's natural for people to want to share those benefits with their loved ones. Depending on the type of timeshare product you have, you may be able to will it to your children or other people for them to use after you pass away. However, there are a couple of things you should consider before giving away this asset to your heirs in your estate plan.
Is the Timeshare Type Right for Your Heirs?
There are a few different types of timeshares, each regulating how the shared vacation home can be used. With a fixed timeshare, the allotted weeks must be used at a specific time each year, while floating timeshares lets owners use the weeks at any time as long as the space is available.
While the timeshare type you choose may be perfect for your lifestyle, the same can't be said for your heirs. A fixed timeshare may be perfect for you because you're retired and take vacations around the same time every year, but your daughter, for instance, might work full-time and has a family so her time isn't as flexible. You may not want to give her the timeshare because she may not be able to make good use of it.
Think about whether the timeshare will fit your loved one's lifestyle. If it doesn't, see what options are available to change the plan to make it more amenable to them (e.g. change a fixed plan to one based on points).
Can Your Heirs Afford the Maintenance?
Another issue you want to consider is whether your heirs can afford the cost of maintaining the timeshare. The average maintenance fees for a two-bedroom unit in 2008 was $739 and fees tend to increase on a regular basis. Your heir will be responsible for paying these fees and any taxes that must be paid every year, not to mention any leftover balance you may have on the loan you used to finance your purchase. Thus, you need to be sure he or she has the income required to meet this financial obligation.
You can lessen the burden of the timeshare expense by either putting money in a trust that is used to pay the fees and taxes or giving the cash to the person directly. If you don't have the money to contribute to the timeshare's upkeep and your heir doesn't have resources either, then it may be best to sell the property and will the money to your beneficiary instead.
To learn more about giving your timeshare to your heir or discuss other timeshare issues, contact a company that specializes in timeshare resales.