Timeshares are often marketed as affordable vacation ownership. However, what happens when they become part of an estate? Many heirs are surprised to learn that timeshares do not function like traditional real estate assets—instead of inheriting a valuable investment, they may be left with ongoing maintenance fees, restrictions on resale and unexpected legal obligations.

Understanding the downsides of inheriting a timeshare can help beneficiaries decide whether to keep, sell, or disclaim the property.

The Hidden Costs of Inheriting a Timeshare

Unlike traditional real estate, timeshares come with mandatory fees and restrictions, making them a financial liability rather than a valuable inheritance.

1. Ongoing Maintenance Fees

One of the most significant downsides of inheriting a timeshare is the never-ending maintenance fees, which must be paid whether you use the property. These fees:

• Increase annually, often outpacing inflation
• Can amount to thousands of dollars per year
• Must be paid even if the timeshare goes unused

Failure to pay can result in collections, credit damage, or even foreclosure.

2. Difficulty Selling or Transferring Ownership

Many assume they can sell an inherited timeshare. However, resale is notoriously difficult. Timeshares:

• Depreciate quickly and often have little to no market value
• Have limited buyer demand, even for desirable locations
• May include contract clauses that restrict resale or transfer options

Some heirs spend years trying to offload an unwanted timeshare, only to realize they are stuck paying fees indefinitely.

3. Potential Legal Liabilities

If a timeshare is deeded property, heirs become legally responsible for all associated costs. This means:

• The management company can take legal action to collect unpaid fees
• Inheritance laws may force multiple heirs to share financial obligations
• Some contracts bind heirs indefinitely, making it hard to walk away

Even if a timeshare seems appealing initially, the long-term costs and restrictions can outweigh any perceived benefits.

How to Avoid Inheriting a Timeshare

1. Disclaiming the Inheritance

Heirs are not required to accept a timeshare inheritance. If an estate includes an unwanted timeshare, beneficiaries can legally disclaim it by filing a formal refusal with the probate court before taking ownership.

However, disclaiming must be done before using the timeshare or making any payments, as this can be seen as accepting ownership.

2. Negotiating a Deed-Back with the Resort

Some resorts allow heirs to return the timeshare through a "deed-back" program. This involves:

• Contacting the timeshare company to check eligibility
• Submitting necessary paperwork to relinquish ownership
• Paying any final fees required to exit the contract

Not all resorts offer this option; some may charge a fee for releasing ownership.

3. Seeking Legal Assistance to Exit a Timeshare

If a resort refuses to take back the timeshare, an estate planning attorney can help explore other legal options. This may include:

• Reviewing the contract for loopholes
• Negotiating with the management company
• Exploring legal exit strategies that protect the estate from liability

Many families assume they must accept an inherited timeshare. However, it may be possible to legally remove this financial burden with the right approach.

Should You Keep an Inherited Timeshare?

While most heirs choose to avoid inheriting a timeshare, some may find value in keeping one under the right conditions. It may be worth keeping if:

• The location is desirable and frequently used by family members
• The maintenance fees are affordable compared to rental costs
• The contract allows for flexibility in usage and resale

However, long-term costs and restrictions should be carefully evaluated before deciding.

Protect Your Estate from Unwanted Assets

If you or a loved one owns a timeshare, addressing its future in an estate plan is essential to prevent heirs from inheriting an unwanted financial burden.

Our law firm helps clients plan for complex assets, negotiate timeshare exits and protect their heirs from unnecessary liabilities. Schedule a consultation today to discuss your estate planning options.

Key Takeaways

• Timeshares come with lifelong financial obligations: Maintenance fees increase yearly and must be paid whether the timeshare is used.
• Reselling a timeshare is difficult: The market for used timeshares is small, and many contracts restrict transfer options.
• Legal liabilities can pass to heirs: If a timeshare is accepted, the beneficiary is responsible for all associated costs and fees.
• Heirs can disclaim a timeshare inheritance: Legally refusing the inheritance before assuming ownership can prevent financial responsibility.
• Legal guidance can provide exit options: An estate planning attorney can help navigate disclaimers, deed-backs and contract negotiations.

Reference: Yahoo Finance (Aug. 16, 2024) “Inheriting a timeshare can be bad news. Here's why, and how to avoid it”