As summer nears an end, and we are trying to enjoy as much of the sunny skies and warm beaches as we can, you may be enjoying your timeshare property. Most timeshare owners would like to pass on their property to their children, if they had the option. Owning timeshare property is not the same as owning property outright. So, clients often ask how to fund a timeshare into a trust.
The benefits of funding your timeshare to your trust
It is certainly worthwhile to include your timeshare in your estate planning, especially if you have a living trust. For most timeshare owners, the actual timeshare property is located outside their state of residence. When that is the case, including a living trust in your estate plan, and properly funding your timeshare property into that trust, can help you to avoid probate.
What if I don’t fund my timeshare to my trust?
If you do not include your timeshare property in your trust, your estate may be required to undergo probate administration in each and every state where you own property, including the state where your timeshare is located. That means your loved ones will be forced to engage in the expensive and time-consuming probate process, both in Arkansas and some distant state like Florida, Colorado or Hawaii.
Deeded vs Non-Deeded Timeshares
If you own a deeded timeshare, it means you physically own a fraction of the property. Non-deeded, or “right to use” timeshares only give you the right to stay at the property. So, if your timeshare property goes under, and you only have a “right to use,” then you would lose the ability to use whatever timeshare program you were a part of, in most cases.
Funding a Deeded Timeshare
When you own a deeded timeshare, meaning you actually have an interest in the property, you will receive a deed for the property. It is no different than receiving the deed to your home, or any other parcel of real estate you own.
When it comes time to fund a deeded timeshare to a trust, you will be required to obtain a new deed that will transfer your property ownership rights from you to the living trust you have established. Your estate planning attorney should check with your timeshare association to be sure there are no rules or requirements with which you must comply in order to properly make the transfer.
Funding a Non-Deeded Timeshare
Finding a right to use timeshare will be a very different process, because you do not actually have ownership of the real estate. Essentially, you can assign your rights to use the timeshare to someone else, including your trust. However, be sure once again to check with your timeshare association to determine whether this type of transfer is allowed.
If you have questions regarding timeshares and living trusts, or any other estate planning needs, please contact Wilcox Attorneys, PA online or by calling us at (479) 443-0062.
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