When you have a child with special needs, estate planning requires special consideration. You'll need…
You didn’t think twice when Mom and Dad bought a timeshare in a holiday resort. But what you didn’t know, is the resort agent suggested that they sign a deed leaving the share to their children, so that when the parents passed, the kids could continue to enjoy the property. It seemed like a good idea at the time.
Unfortunately, once Mom and Dad did pass, the children were shocked to receive demand letters from the resort charging them hefty annual maintenance fees.
Those fees typically start at around $1,000.00 a year and go up. Additional charges could be imposed for extraordinary events like hurricane damage. Routine annual hikes of as much as four percent could outpace inflation. At four percent, in ten years’ time the kids would be paying $1,477.00, an increase of around 48%!
And the kids would be liable for those fees, on and on into the future, regardless whether they actually used the property.
None of the kids wanted that obligation, so they simply ignored the demand letters. They then found themselves in a world of hurt, when the resort sued them and their credit reports were blackened.
The only way to unload this obligation is to get rid of the timeshare.
If you are caught in this dilemma, act promptly. You should pay the resort’s demands while contesting them, sending a protest letter along with payments. If your parents have left an estate, use estate money to pay the fees, not money from your own bank account. You must not use the share, or you may jeopardize your ability to escape from it. If you end up having to sue, you have only a limited time under state statutes of limitations.
The resort might have a resale program, but unfortunately many do not. The contract may say something about giving or selling the share back to the resort. Unfortunately, this may come along with additional fees.
Do not pay in advance for termination services, and you should not submit to threats.
It is highly advisable to hire your own local legal counsel to represent you. Of course as lawyers we would say that, but please, beware of online hypes that promise to sell your share or get you out of the obligation by “exit” services. This seems to be an area particularly attractive to outright scams, or enterprises that fail to deliver on promises.
If you do negotiate a sale or exit on your own, don’t sign anything without your own lawyer’s prior approval. Your lawyer will make sure that the deal really will work as a complete “renunciation of property.” That is, any agreement you sign must deed all of the real estate interest to the new owner or back to the resort, and it must expressly, completely, and immediately free you from the relationship with the resort as a release, termination, and cancellation of contract.
It’s too bad that a timeshare given with such good intentions can be a gift horse better looked at in the mouth.
If you have questions about a timeshare interest or any other property interest you own or may inherit, please give us a call. We would be honored to speak to you confidentially to see how we might help. If you have questions or would like to discuss your estate planning options, please contact our Heber Springs, Arkansas office at 501-365-3934.