Although a morbid subject, with the median age of UK timeshare owners approaching 60 years if you own timeshare it’s important that you understand what happens in the event of your demise.
One often overlooked fact is that technically a timeshare is classified as an asset; although in most cases it has a zero value. That aside being an asset and forming part of an estate means it may need to be taken into account when compiling a will. Before rushing off to the family solicitor we need to look at certain areas that may alleviate the need to take the timeshare into account.
Many timeshare developers in Europe are members of the Resort Development Organisation (RDO) their advice to members is if one spouse/partner dies and the survivor no longer wishes to continue with the timeshare and the next of kin and/or siblings do not want to take it on then it may be terminated with the developer. It must be remembered that the RDO has no regulatory powers therefore their comment is not a legal requirement placed on developers it is merely advisory. Each developer will have their own rules so these need to be checked.
General advice
If a timeshare does need to be added to the will it makes sense not to amalgamate it with other assets this is because should a beneficiary decide not to accept the bequest, if it is lumped together then it won’t be possible to refuse acceptance, accept all or nothing. According to HMRC, in general law, a beneficiary has the right to
- Renounce a gift made to them under a will,
- Disclaim their interest under intestacy.
A beneficiary may disclaim by written disclaimer. The disclaimer must apply to the whole of the benefit. The beneficiary must not have received any benefit from the property being disclaimed, although they may accept one gift in a will and disclaim another.
A disclaimer must be unconditional and the beneficiary cannot redirect the interest that is being disclaimed. The disclaimed benefit falls back into residue and follows the devolution of the estate accordingly. A beneficiary who has disclaimed an interest under a will may subsequently retract their disclaimer provided no-one has altered their position in reliance on the disclaimer.
Put simply, if the timeshare is noted as an individual asset in the will, and bequeathed to a named beneficiary (ies) then it may be disclaimed and not accepted. It is of importance that no benefit is received, i.e. the timeshare must not be used and furthermore an important point is that a disclaimed timeshare will fall back into the estate (residue) and will be the task of the executor to either dispose of or continue funding maintenance fees.
Timeshare USA
Most timeshare agreements in the USA usually contain a “perpetuity clause,” saying that the timeshare is valid for the lifespan of the original owner. When the owner dies, the timeshare becomes part of the estate. The inheritors of the timeshare become the new owners, and they are obligated to take over the timeshare and inherent fees involved. In this case it is essential that steps are taken to stop the timeshare being forced on to beneficiaries.
If your children are named as inheritors of your timeshare, or they are set to inherit it by default, there’s still a way out for them. They can file a written refusal to accept the timeshare called a Disclaimer of Interest. Generally, a letter or statement is used to let all interested parties know that the heirs have no interest in the timeshare.
The disclaimer should be filed with the estate grant of probate. An estate attorney can help the children with the paperwork. Remember different states have different laws and requirements. Additional legal requirements normally require the grant of probate to be filed in the county where the timeshare is owned; unfortunately this can be quite expensive.
Leaving timeshare to a charity
Not even worth considering. To our knowledge there are no UK charities who will accept the bequest of a timeshare. With a low or nil value and a contractual liability to pay annual maintenance fees, charities have established that they are accepting a liability not an asset.
Finally
This article has been written for guidance only. Where wills and inheritance are concerned we strongly advise taking expert legal advice. An ideal position would be to terminate the timeshare ownership prior to it potentially creating problems as outlined above. In many cases this may present problems, however TCA can advise and present possible solutions.
Whilst Mum and Dad may well have enjoyed their timeshare ownership, from our experience most children are really not interested in inheriting the ownership. This being the case, take action before those who are left behind have to sort out the problem.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk