Q: Is it true that Florida resort timeshares are deeded properties, and if someone dies while owning a timeshare that their heirs must hire an attorney to retain ownership?
Yes. Resort timeshares are typically structured as either shared deeded ownership or share leased ownership. If deeded, the owner receives a deed for their percentage of the unit, which is recorded the same as a home or vacant land deed. This is important to know if you’re gifting a timeshare to beneficiaries at your death. Unfortunately, nearly 95 percent of all deeded timeshares end up in the hands of attorneys and courts because the owners don’t realize their timeshare was deeded property. This can be avoided by simply recording a life estate deed.
Timeshare vacation plans have been around in the U.S. since 1969. According to the American Resort Development Association (ARDA), which represents many timeshare developments worldwide, one out of 11 Americans owned a timeshare in 2017.
Many timeshare vacation plans are sold by brokers, individuals, resorts and hotels, ranging in purchase value from $500 to thousands for single or multiple weeks plus annual maintenance and escalation fees. Much too often, the hard sell approach is used by salesmen who apply techniques of browbeating, hype, coercion, luring and intimidation to persuade you to empty your pockets of hard-earned cash in exchange for an unintended purchase.
An educational panel presented by ARDA titled “The Effects of Buyer Regret on Rescission: Recognizing, Revealing and Rectifying Regret” noted that 85 percent of buyers regret their purchase and only about 15 percent successfully cancel their contracts. Florida law permits you to cancel your timeshare contract until midnight of the 10th calendar day following the date the contract was signed or the day you received the last of the required documents, whichever occurs first.
What if you didn’t cancel the agreement? Consider the following example.
John and Mary bought a Walt Disney Resorts timeshare in 2007 for $5,366 plus an annual maintenance fee of $1,310 per year. A month later, they had buyer’s remorse. However, they owned the timeshare for life since they were past the 10 days permitted by Florida statutes for cancellation. Failure to pay the required annual fee would put a black mark on their credit, so they decided to make the most of their Disney vacation week. Due to the initial pressures at the time of purchase and the anguish that followed, John and Mary overlooked the fact that the timeshare was a deeded property.
Following their deaths, their son, David, learned that the timeshare deed was never included in his parents’ revocable trust and would need to be probated before he could take ownership. The probate costs would be equal to 2 1/2 years of the annual maintenance fees. He decided to forgo taking ownership to avoid probate.
If you own a timeshare, consult with an estate planning attorney about how to transfer ownership to beneficiaries at your death.