When you think of inherited property you'd like to receive one day, you may think of family land, a cherished heirloom, or a childhood home.
Chances are, a timeshare isn't too high on your list.
Yet, the reality is that timeshare purchases are on a steady upswing. In fact, the American Resort Development Association reports that sales for the timeshare industry have seen seven years of consistent growth, reaching 9.2 billion in 2016 .
As more Americans buy into this vacation investment, concern is mounting over the financial obligations their heirs will be saddled with and how easily they can get out of them.
Today, we're breaking down your options when it comes to handling your inherited timeshare. This way, you'll know just what to do in the event you're stuck dealing with one.
Ready to get started? Let's dive in!
Timeshare Inheritance 101
In some cases, a timeshare may hold sentimental family value.
After all, a timeshare is simply a rental program that allows a vacation "owner" the right to access a property for a specified time each year. That's plenty of time to rack up some cherished memories.
As such, many timeshare owners sign a contract when they begin that passes the property rights to their children upon their death. They may also choose to include the inheritance as part of their will.
If that's the case and you've received the timeshare, there may be a reason you want to hold onto it. Of course, you're granted that right.
Claiming your inheritance is often as simple as providing the timeshare company with a copy of the owner's death certificate . You'll also need to include details on how to contact and bill you going forward.
If you received the timeshare through a will, you'll be able to claim it through the same steps. This can occur once all the estate administration paperwork has passed the approval of the probate judge.
Yet, while some may see the value in taking on the ownership of a timeshare, for most, this is one type of inherited property that they see no issue in refusing.
The chief reason? It can carry significant financial obligations, such as ownership expenses and maintenance fees , that you as the heir didn't sign up for. If you don't foresee using the property regularly over the long-term, it often means more mess -- and more money -- than you want to deal with or spend.
If this is the case, and you're ready to legally refuse this inherited property, check out the next few paragraphs.
Legally Refuse Your Inherited Property
The good news is that you aren't legally required to accept your inherited timeshare.
To refuse it, you'll need to follow a few steps.
First, you should complete a Disclaimer of Interest form. In short, this document serves as your written intent to disclaim or refuse the inherited property. A real estate attorney can help you find and file this form.
After it's completed, you'll need to send the Disclaimer of Interest form, along with a copy of the original owner's death certificate, to the timeshare property.
The death certificate can be obtained from the executor of the estate.
It's important to include the death certificate, as this will stop the property from sending maintenance fee bills to the original owner's address.
As you begin the process, be sure you understand if the timeshare was a rental, or if it carried a mortgage. If it's the latter, you'll also need to send the bank a copy of the death certificate. Failing to do so could cause them to put the property into foreclosure if payments continue to drop.
While the process is straightforward enough, it's important to consider a few elements to make sure the paperwork is correctly processed and you're legally removed from your timeshare obligations:
File on Time
You'll have a set timeframe during which you can send in the Disclaimer of Interest and death certificate.
While this time may vary, most properties allow you up to nine months after the date of the original owner's death to get all the paperwork in. If you're a minor, that timeframe won't begin until you reach age 21.
Be Sure of Decision
Note that once your Disclaimer of Interest is received and filed, your decision cannot be undone. Moreover, you'll no longer have any say over what happens to the property, or who receives it next. This means you aren't able to gift it to someone you specifically choose, such as a favored relative or even a non-profit or charity organization.
So, before you file to refuse, consider if you or your family would ever benefit from the inherited property and if it's worth keeping. Then, make sure you're completely sure of the decision.
Let Others Know
If you're the first person in line to receive the inherited timeshare and you refuse it, it will typically pass to the next person in line. If that person also refuses it, he or she will be required to complete the same steps. So let your family members know of your intent as you file to reuse the timeshare, so they'll be ready to either accept it -- or file paperwork of their own.
Don't Use It
If you intend to forfeit the inheritance, keep in mind that you won't be able to access it at all for your own benefit after the original owner's death. Even if you visit it just once for a short period of time, you won't be able to refuse it in the future. This means you could be stuck with it until you will it to someone else upon your own death.
While brief, these steps serve as a high-level overview of the process you'll take as you seek to refuse your inherited property. A legal real estate expert will be able to provide you a more detailed view of the journey, customized to your specific circumstance.
Timeshare Exit Assistance: Simplifying the Process
If you've been bequeathed a timeshare that you'd like to refuse and would like assistance removing you from this responsibility, we'd love to help.
We're real estate experts dedicated to helping you navigate (and exit) the timeshare contract journey. We'll work with you throughout the process, offering a 100% money-back guarantee that we'll deliver the results you need.
Contact us today to get started and receive our free consultation. Let's take this important first step toward financial freedom together!
A timeshare can give you the freedom of a vacation without the full commitment of purchasing a home away from home.
However, a timeshare can be a costly option for you, especially if you are unprepared.
Timeshares come with maintenance fees that are used for upkeep of your timeshare unit. The fees are also used for upkeep and general management of the timeshare's resort. This is a vague and real maintenance fees may entail more than you imagined.
It is important to understand these fees, what they are, what they mean for your ownership. You also need to know what to do if the fees you are charged need disputing.
This simple guide will help you understand your timeshare maintenance fees and the real cost of ownership.
Timeshare Maintenance Fees: What Are They?
The fees that come with your timeshare can vary depending on the resort that you use. However, there are basic maintenance fees you can expect, no matter the company.
Here is what you may be paying for:
Your timeshare will need upkeep during the off season or when it isn't in use. This may include minor repairs, cleaning and even exterminating services. Your fees cover this upkeep year-round.
Fees will cover landscaping year round for upkeep of the property. This includes mowing the lawn, pruning the plants or watering of the grounds on site.
Just because you are not using your timeshare at all times, the utilities will still need to be paid to some extent. Your fees will cover the utilities for your timeshare when not in use.
Some of your maintenance fees may be kept in a separate account for upgrades to your timeshare.
This may include furniture, utility upgrades, and other building upgrades. This is kept separate to ensure you are prepared to meet this necessity with the funds available.
There may be other timeshare maintenance fees associated with your timeshare as set by your timeshare company or resort.
It is important to check with your timeshare to see what they are charging and how much they are charging you. You can ask for an itemized statement as well when your maintenance fees are due. You should keep these for your records to watch for increases and decreases.
How Much Can Maintenance Fees Be?
If you are currently an owner of a timeshare, you should already be aware of the maintenance fees you are being charged.
However, you may not understand that these can increase and decrease over time. If you are looking into purchasing, timeshare maintenance fees depend on a few factors.
Amenities differ between timeshares. If you have purchased a timeshare with fewer amenities, your maintenance fees may be less. If you have purchased a high-end timeshare with many amenities, it will be the opposite.
The location of your timeshare has a huge impact on your maintenance fees. Is your timeshare located on a huge lot with a large yard? Or, perhaps your timeshare is located in a luxurious part of town. Your maintenance fees will reflect the location you are in.
Do you own a timeshare condo? Or do you own a timeshare located within a resort hotel? The type of your timeshare will have a direct impact on your fees.
With all of this in mind, the cost of your maintenance fees can run from a few hundred up to thousands. It depends on what type of timeshare you own. It is best to check with your current timeshare or potential timeshare to get a list of your maintenance fees.
Even with a timeshare with seemingly low fees, these fees can increase over time. Contrary to popular belief, maintenance fees are not "locked in" or kept the same over time.
Your timeshare resort or company may choose to have a cap on the fees or may not, depending on their needs and type or resort. Most resorts do not have a cap on the amount that the fees can increase over time.
As a timeshare owner, you must protect yourself from a potentially dangerous situation when it comes to maintenance fees.
If you have received a bill for maintenance fees that you do not understand or may seem a bit "off" you should look into the fees.
You can always ask your timeshare resort or company for a detailed summary of your fees and what type of increase you can expect. It is your right to know how these fees are billed and why.
If you wish to dispute your fees, you can follow these steps:
1) Ask for a written or printed ledger of the fees and what they are associated with.
This includes all fees you will be paying throughout the year. You can submit a letter to your resort to have the proof for you to keep.
2) Remind your resort that you have the right to ask for this information if trouble should arise.
3) If the information is not given or refused, you can take legal action against your resort.
There are ways to cancel your timeshare if the need should arise. You may wish to cancel due to high fees that you cannot pay, or a resort that refuses to give you information about your fees. Whatever the case, legal action is available to you.
A timeshare can be a good investment for someone who is prepared for the fees that can be accrued over time. It is important to understand the fees before you purchase and during and know exactly what you are paying for each year.
It is important to remember that fees can increase each year, depending on the type, location, and upkeep of the property that you own.
You should also know how to dispute timeshare maintenance fees if the need should arise.
PMG can help you take action if you wish to cancel your timeshare or get answers regarding fees. PMG can also help you become aware of the real cost of ownership before purchasing and the cost of the timeshare ownership.
Let's come out and say it: timeshares are a bad investment.
These 'investments' are a thing of the past. They're costly, have little flexibility, aren't earning the owner income. Plus, there are better alternatives.
This article isn't to knock those within the industry. But peddling timeshares in 2017 is groan-inducing. There are better options -- ones that aren't a bad investment.
Get ready to read about the harsh realities of the timeshare industry.
Three Reasons why Timeshares are a Bad Investment
Hopefully, those reading that haven't yet gotten wrapped up in the timeshare game will learn how and why avoid it. For those sitting on one, well, maybe it'll be convincing enough to dump the bad investment.
The Limited Flexibility
Which sounds like a better choice when spending thousands to vacation:
Purchasing a timeshare where there's a two-week block that's always going to be the same location?
Spending the same amount of money for flights, hotel, dining, and experiences at a place that has been part of the bucket list?
A timeshare is a bad investment right from the get-go. This is because the money invested could have paid for a wonderful vacation that's not limited on time.
Wouldn't going to the same place, year-after-year, get boring?
That's not to mention that some timeshares have blackout dates and/or the customer is out of luck if plans change.
Modern timeshare companies try to distance themselves from the past .
They do this by expanding the options on timeshares offered to the customer. The new standard is that a timeshare company owns many properties around the world. It's to give their customers a variety of destinations.
The new standard also uses a 'point system' whereas a customer can 'spend' their points for access to specific days and locations. The points often roll over into the following year if a vacation has not been made.
The problem? It's an illusion of choice .
It sounds good on paper but it carries the same problems of the past. Costs are still high as ever. A customer won't always get what they want. They're still stuck with the limited selection offered by the management company.
The Costly Upkeep
Dump the timeshare and recoup the costs of the upkeep by throwing that money toward hiring a lawyer to bail on this bad investment.
Remember that the upkeep is the real money burner when it comes to timeshares. These costs add up and catch a lot of people off guard. It happens because they didn't read the small print or the salesperson was too aggressive and shifty in their presentation.
The common things that are included in this upkeep:
These upkeep costs are usually bundled together. On average the costs are close to $1,000 a year and higher for luxury properties. If you don't pay? They're coming after you with collections, interest, and late fees.
Getting out isn't so easy, either since they are quick to send the costs to a collections agency. That agency will report it to credit companies. Dinging your credit score like being kicked when you're down.
There are also membership fees for certain timeshare organizations and exchange companies (like RCI and II). This membership goes for around $90. Then there's a $125 cost to make an exchange.
The costs keep adding up and up.
USNews did a nice breakdown of the timeshare pros and cons with a highlight on how the upkeep costs are atrocious. Still, as opposed to the split decision, we feel they could have been firmer with discouraging people from buying timeshares.
While it's your money, you should always aim to be on the lookout for...
The Better Alternatives
We all know someone that bought into a timeshare back in the early 2000's. They likely say they spent around $8k+ at the time and a typical $5-800 for regular maintenance. They learned their lesson and got out.
Now, there are far better options if someone is willing to take the time to do research. These include things like:
Any of these are better options for travel because they cost a fraction of what a timeshare will be. Plus, there are thousands upon thousands of options to choose from... all over the World.
Take that $8k that person spent and compare it to:
Right away it's clear: Timeshares are a bad investment if you want to enjoy an awesome vacation.
Not to mention the other factor that they aren't investment properties . Down goes the money and the only thing it'll do is depreciate in value.
A time share is a financial lock down that could have been spent on any number of vacation packages or income properties. Just imagine if that money was placed into a high-interest savings account or contributed to a retirement fund .
Normal property passes on and has real value to a surviving spouse or family member. A timeshare continues to incur payments no matter what. It's easy to see that this could slip into late fees and extra charges. The unfortunate death of the owner creates financial instability to the one stuck with the contract.
This isn't just stressful -- it's incredibly unfair. When you look at situations like this, you can see that more often than not, timeshares are just a way to take advantage of people.
All-in-all, timeshares are a thing of the past.
Nowadays we have unlimited access to travel booking online, house swaps, Airbnb and similar services, and couch surfing. There's no reason to get stuck with a piece of property that limits the usage. One which costs a fortune to maintain. One that has little resale value when compared to the alternatives.
What Do You Think?
Do you believe timeshares are a bad investment? Let us know! Also, be sure to check out our website and blog for more information and advice on how to get your finances back on track.