death and timeshares

My inlaws own a timeshare that will end in 2025. The are now both dead. Does anyone know if the estate (my husband) must legally continue the yearly fees? They purchased in Cancun, beautiful place but I don't want to deal with it. Thanks Lisa

lisam873 wrote:

My inlaws own a timeshare that will end in 2025. The are now both dead. Does anyone know if the estate (my husband) must legally continue the yearly fees? They purchased in Cancun, beautiful place but I don't want to deal with it. Thanks Lisa

The estate will be responsible for any debts related to the timeshare including yearly maintenance fees until the week is sold or changes ownership.

I suggest that Lisam873 (Lisa) seek the advice of a board certified probate attorney (familiary with Mexico law) concerning the question she has posed concerning who is responsible for the timeshare fees following the death of the owners, that is, her inlaws.

Jayjay continually provides incorrect legal advice on this site but the most egregious is her legal advice concerning estates, heirs, and maintenance fees. Most estates (over sixty percent varying from state to state) are not probated. There must be a probate for the Timeshare to even file a claim for maintenance fees and the claim must be filed within the brief period of time for filing claims. The creditor (timeshare) can force the opening of a probate but most are unaware of the death and additionally most would not incur the expenses related to opening a probate. I, at one time, was involved in the recovery of estate credit card debts for three of the largest banks in the nation and over a ten year period we never forced the opening of a probate. The expense/recovery ratio never justified the expense.

The probability of a Timeshare being aware of the death of an out of state owner and filing a timely claim is very remote. Certainly the heirs who inherit the timeshare must pay the fees if they expect to continue to use the timeshare but the statement that the estate "will be responsible for any debts related to the timeshare including yearly maintenance fees until the week is sold or changes ownership" is patently false.

There is an interesting article in the latest issue of "TimeSharingToday" written by an attorney . He is primarily promoting "club" ownership (e.g. Worldmark) over deeded ownership for several reasons including the difficulty involved when the owner of a deeded timeshare dies. He correctly points out that an ancillary probate must be opened in the state where the property is located - assuming the decedent resides elsewhere - and that this must be done to obtain a "deed in lieu of foreclosure" from the executor or administrator. Otherwise a foreclosure is necessary but in either event the Timeshare is out thousands of dollars.

Carvana: Welcome back. There is certainly no shortage of unfiltered "advice" in these forums, but the dearth of sound legal background or knowledge behind some of that proffered "advice" is, at times, almost painful. Thanks for trying to help correct / alleviate some of that situation.

ken1193 wrote:

Carvana: Welcome back. There is certainly no shortage of unfiltered "advice" in these forums, but the dearth of sound legal background or knowledge behind some of that proffered "advice" is, at times, almost painful. Thanks for trying to help correct / alleviate some of that situation.

All I know is what I've read on TUG .... and that same advice is still being given that the estate is responsible for any debts relating to timeshares .... some of the smartest people I know regarding timeshares are members of TUG and I trust their advice.

And, Ken, I somewhat resent your condescending attitude toward Redweek members that come here daily to try and help timeshare owners ... the same could be said of some of your wrong advice that is, at times, painful ... nothing has been corrected or alleviated by the poster above.

A timeshare debt is like any other debt the deceased owes .... why would you think it would be any different?

Dave M Moderator TUG Lifetime Member

BBS Reg. Date: Jun 16, 04 Location: Sun City Hilton Head, SC Posts: 11,305 Quote:

If the estate has no other assets when the timeshare owner dies, I believe you would be correct. The resort's only option would be to take the timeshare back.

However, the estate or heir becomes a legal entity and has all of the responsibilities of ownership. An heir can disclaim the inheritance of the timeshare, in which case, the estate still owns it and has the responsibility for paying MFs until and unless the executor/executrix or other person responsible for administration of the estate properly disposes of the timeshare.

If that person distributes other estate assets without properly taking care of the MF responsibility, the resort should have a legal claim against that person.

timeos2 Moderator

TUG Lifetime Member

BBS Reg. Date: Apr 11, 05 Location: Rochester, NY Posts: 4,990

Resorts: Cypress Pointe, Wastegate, Orlando, FF, RCI Points, Diamond Club, Cove@Yarmouth, Rayburn County,Tx, Kingsgate Williamsbu Be careful - the estate is liable

Wrong. If the resort won't take a deed back (and they don't have to) then it's the ESTATE that has to find a new owner. It can be one of the famly or a third party but the estate cannot be closed until it has a new home with someone. Plus any fees due have to be paid by the estate until that new owner is found. It cannot simply be ignored. An individual can disclaim an inheritance but the estate has to deal with all assets and liabilities - even those of questionable value - before being finalized. __________________ John Chase

DeniseM Moderator TUG Lifetime Member

BBS Reg. Date: Jun 6, 05 Location: Northern, CA Posts: 13,779

I'm not a lawyer, and I didn't stay at a Holiday Inn last night, but based on previous discussions on this topic I believe that the estate is still liable, as long as the deed is in her parent's name. If your wife is the executor, then she is responsible for the estate and the estate's debts. __________________ DeniseM

timeos2 Moderator TUG Lifetime Member

BBS Reg. Date: Apr 11, 05 Location: Rochester, NY Posts: 4,990

No, the estate cannot be closed out until ALL assets (even one that maybe near zero value) are properly disbursed. And until someone is willing to accept the timeshare by inheritance, sale or gift the estate is open and responsible for the fees. Any other assets it holds (cash, real estate, etc) will be used to pay costs until it is closed. As the executor your wife cannot assign other assets until the estate is properly closed. Check with a lawyer and State laws. Probate / estates have extremely complex and strict rules. You cannot simply walk away from an obligation of the estate without proper actions. The question comes up every so often but the laws/rules that apply are hundreds of years old and apply to timeshares just like any other obligation. __________________ John Chase

Dave M Moderator TUG Lifetime Member

BBS Reg. Date: Jun 16, 04 Location: Sun City Hilton Head, SC Posts: 11,305 I agree with John's response.

One of two situations exists.

1) The estate was not properly closed and the estate still owns the timeshare, making the executor responsible for properly transferring the timeshare. If the executor allowed other assets to be distributed, the executor likely has responsibility for those MFs.

2). The estate was properly closed out with the timeshare transferred to an heir. If that's what happened, the heir is responsible for the MFs, even though the name on the title hasn't been changed.

To just stop paying fees invites the resort to start a collection action, a process that could be very expensive for whoever is responsible for the fees, especially since the legal documents for most timeshare homeowner associations allow the resort to collect the fees associated with the collection effort, including attorney fees and court costs, if any.

I don't have time to copy and paste anymore replies from very knowledgable TUG members .... why don't you and carvana take this up with TUG members and see how far you get.

DaveM, is a retired CPA .... I believe he, of all people, would know what happens when a timeshare is left to an estate.

Also, you have to remember that timeshares are DEEDED PROPERTIES registered in the county where the timeshare resort is located.

jayjay wrote:

Also, you have to remember that timeshares are DEEDED PROPERTIES registered in the county where the timeshare resort is located.

Just for the record, the original poster in this thread actually made very specific reference to the timeshare at issue being a RTU (i.e., with an identified expiration date, located in Cancun, Mexico) as the basis for the question posed. Accordingly, it's obviously not a deeded ownership at all in the first place. It is instead a contractual "right to use" at a Mexican facility, so neither "deed" nor "County" are factually applicable or relevant to the OP's actual posted inquiry...

ken1193 wrote:

Just for the record, the original poster in this thread actually made very specific reference to the timeshare at issue being a RTU (i.e., with an identified expiration date, located in Cancun, Mexico) as the basis for the question posed. Accordingly, it's obviously not a deeded ownership at all in the first place. It is instead a contractual "right to use" at a Mexican facility, so neither "deed" nor "County" are factually applicable or relevant to the OP's actual posted inquiry...

You and carvana have flatly stated that a deceased's timeshare is NOT the responsibility of his/her estate ... that was my point.

I can almost assure you that RTU resorts have some legal means to assure maintenance fees are paid upon an owner's demise by the estate, if the estate has assets, until the RTU expires or is sold.

Jayjay says "Carvana . . . flatly stated that a deceased's timeshares is Not the responsibility of his/her estate" I never said that. I said you were wrong when you said the estate is responsible for the fees until the timeshare is sold or retitled. The estate is responsible only for paying the claims that are timely filed and that applies to maintenance fees as well as any other debt. Miss the deadline for an unsecured debt (maintenance fee) and the Timeshare is out of luck. Their only recourse is foreclosure.

Many creditors subscribe to services that continually screen probate records in all fifty states to identify newly opened probates and this information is then in turn filtered against their customer base to ensure that a probate claim, if appropriate, is timely filed. This is a sophisticated and expensive service and is typically not used by Timeshare Owner's Associations because of the expense involved. Plus, this works only if there is an open probate. One of my clients recently died with a multiple million dollar estate. There will be no probate because we structured his estate so that all property including his residence passed outside of probate. We used inter vivos trusts and life estate ownership and there was no need for a probate. This client did not have a timeshare but I am certain that no Timeshare Ownership Association would have been aware of his death since there was no probate and in the highly unlikely event they were aware of his death they would not have incurred the expense of forcing the opening of a probate to collect a one time $500 to $1,000 maintenance fee.

Please read the artilcle, by an attorney, I referenced in "Timesharing Today" and it may help you understand the difficultry Timeshare Owners Associations encounter on the death of a owner when the heirs do not voluntarily pay the fees Your lack of a legal background and your reliance on TUG CPAs to answer legal questions may be too much of a roadblock to your understanding the legal complexities involved but please for your sake and that of those who read your posts, give it a try.

Do your TUG advisors somehow think that in the absence of a probate the ownership is magically retitled in the name of an unwilling heir and at the same time the mangement company is notified of the filing of this deed and the name of the new owner? If you really believe that, I have a bridge for you at a bargain price. It was formerly in London but is now in Arizona. I will even allow you pay for the bridge over the next few years at two points over prime. Interested?

Please let go of this issue and do not continue to embarrass yourself. Stick to the areas where you excel including advising people not to pay unfront advertising fees.

carvana wrote:

Please let go of this issue and do not continue to embarrass yourself. Stick to the areas where you excel including advising people not to pay unfront advertising fees.

Thanks for the veiled compliment, but you need to take the 'death and timeshare' topic up at Tug with the knowledgable members there ... it would be interesting to see the debate ... if I am embarrassing myself, then those knowledgable Tug members are also embarrassing themselves.

I am a probate and estate attorney and two legal points you all overlooked with timeshares in estates are: 1. If the decedent has no probate estate opened in the court but they had a Grantor Trust (Living Trust or any number of similar names) that trust liable for the timeshare fees even if the timeshare is not owned by the trust - true in all states by law.

2. Creditor periods never end unless all "known or reasonable ascertainable creditors" are properly noticed - and this is a biggie most people don't understand.

The reality is that many timeshare companies won't go after the estate however they've been known to go after the Executor/Personal Representative personally.

annem296 wrote:

If the decedent has no probate estate opened in the court but they had a Grantor Trust (Living Trust or any number of similar names) that trust liable for the timeshare fees even if the timeshare is not owned by the trust - true in all states by law.

Creditor periods never end unless all "known or reasonable ascertainable creditors" are properly noticed - and this is a biggie most people don't understand.

I have never once professed (nor do I for one moment profess now) ANY expertise OR position whatsoever on estate or probate matters --- timeshares included.

That much clearly stated, I must repeat my earlier observation that the matter of inquiry initially posed by lisam873 on 10/30/09 very clearly and very specifically referenced a "right to use" contract executed in Cancun, Mexico. Accordingly (or so it seems to me) Mexican law (...such as it may be) would prevail in this matter and the subsequent references to deeds, Counties and/or state laws may very well be completely irrelevant to the actual facts and circumstances presented.

...Or am I somehow just missing something here???

Hey Lisa here, the originator of this debate weighing in. Thanks for all the chatter, it all raises good questions to be asked,and interesting points. I have read the contract signed by my inlaws. First off we are in Mexico about (15 years ago), I say about because there are no dates anywhere on the contract. The contract never addresses death or transfer of the contract. It does state that failure to pay for 2 years will result in the ownership reverting back to the company. I'm all for that! The estate has no money, other than a life estate on the house. Which is to pass to my husband without probate. I speak with our attorney tomorrow and will see where that takes us. I would think in our current economy the amount of money these timeshares charge for maintainence should be decreasing or at least negotiable!

As Ken has twice stated all the chatter on death and timeshares is irrelevant in that the timeshare Iin question is governed by Mexico law.

Annem296, with due respect, I disagree with the points you raise.

1. A common mistake made by many who create a Grantor Trust and/or Living Trust is the failure to fund the trust. They create a trust for a multitude of purposes but fail to fund it. That is, property is never transferred to the trust. For example, a husband creates an irrevocable trust granting the surviving spouse the power of invasion limited by an ascertainable standard (section 2041 of IRC) but fails to fund the trust. The intended purpose of saving estate tax fails because the trust holds no corpus for the surviving spouse to invade. A trust is a legal entity and must own the timeshare to be liable for any debts related thereto. This is true unless the plaintiff can prove the trust is merely the alter ego of the heir but again that requires expensive litigation. Please furnish a cite from the statutes of any state that makes a trust liable for timeshare maintenance fees for which there is no signed document by the decendent wherein they promised to pay the maintenance fee. The bottom line is the trust must be funded and you know that. For the sake of argument, assume the trust is in fact liable for the in rem maintenance fees, how does the Timeshare collect these fees from a trust with no assets? If your answer is by taking legal action to force the opening of a probate or legal action against the trusts or the "person in possession" then we are back to square one of my argument that a Timeshare Owners Association will not incur this expense.

Certainly an heir who wishes to continue to use a timeshare owned by their deceased parent must pay the maintenance fees. There is no personal liability in that the the buyer did not sign a "promise to pay" at the time of purchase but the buyer does purchase the timeshare subject to the declaration on file creating a liability (in rem) that runs with the land. That is, if you fail to pay the maintenance fee provided in the recorded declaration you lose the land through a foreclosure.

2. The operative word is "properly noticed". The "properly noticed" requirements for an executor or administrator or even a "person in possession" are clearly set out in the various state probate codes. Once the legal notice is published the clock starts running on filing a claim. The creditor is responsible for filing the claim and their failure to do so is fatal and that is "a biggie" apparently some probate attorneys do not understand. Closing an estate while a "known or reasonably acertainable creditor" has not been paid could constitute civil fraud but here again the burden would be on the creditor to institute legal action to prove this point and this brings us back to square one of my argument. The expenses related to filing suit to recover a $500 maintenance fee for which thre is no signed promise to pay is not worth the expense involved.

Lastly, you say "that many timeshare companies won't go after the esate however they've been known to go after the Excutor/Personal Representative personally." This is highly doubtful but easily proven. Please provide the case number of any case - just one - where the timeshare company went after the Executor/Personal Representative personally. I recall collection agencies especially one in the Chevy Chase section of Washington D.C. that called family members with the purpose of intimidating them into believing they were personally liable for the decedent's debts but they never actually filed a suit against the faimily member. To suggest "many" timeshare companies incur the legal expense by filing a suit to collect a $500 fee is ludicrous. The truth is and a little due diligence on your part will validate that they simply seek a deed in lieu of foreclosure or actually foreclose. Unscrupulous collection agencies frequently make incorrect claims in an attempt to collect a debt but that does not mean their actions are not in violation of the FDCPA.

This is my -30- on this topic.