For more than a decade, employees of a violent Mexican Cartel, posing as sales representatives, have contacted timeshare owners and offered to buy their timeshares back for a princely sum. They persuade the owners to wire large sums to Mexico for upfront fees for listing advertisements, government fines, and other bogus costs.
Then, of course, they clean out the victims’ bank accounts.
How Does The Timeshare Scam Work?
The scheme is enormous. The cartel has dozens of call centers and has netted hundreds of millions of dollars. Its target is older, retired American and Canadian owners who want to liquidate their timeshares, so they have money to leave to their family.
Sound familiar? Timeshares are so easy to buy, so difficult to sell, and so susceptible to swindlers.
What is a Timeshare?
A timeshare is an agreement that allows multiple owners to share the right to use a property. Usually, a timeshare interest gives the owner the right to use the property during a specific week of the year.
Timeshare interests can be confusing. Sometimes they are a deeded interest in the timeshare property. Other times they are merely a contractual right to use the property.
Deeded Interest
If the timeshare is a deeded interest, it is considered real property. That means that if the timeshare property is located in another state, it is subject to that state’s laws. If you live in Texas and own a timeshare property located in another state, then we may need to do an ancillary probate in that other state when you die. Your options to dispose of the interest outside of probate are determined by the law of that state.
Contractual Right
If the timeshare is merely a contractual right, then it is considered personal property. The contract will usually address what state’s law applies to the contract.
Factoring Timeshares into Estate Planning
Timeshares are burdened by monthly or annual fees that must be paid. For that reason, a lot of people who inherit timeshare interests are not happy. The last thing they want is an obligation to pay thousands of dollars annually in exchange for a right to vacation in a place they did not choose. That, of course, is on top of the expense of traveling to the timeshare property and trying to get time off that matches with the availability of the timeshare unit.
Aside from your beneficiary’s unhappiness after your death, a timeshare can become burdensome for you during your lifetime. The associated costs do not stop just because you are ill or incapacitated. The deadlines for reserving your vacation weeks can become difficult to manage. The timeshare companies are usually reluctant to deal with your agent under a durable power of attorney.
If you are using a revocable management trust in your estate planning, then you may be able to have a deed or assignment prepared that would transfer the timeshare to the name of the revocable trust during your lifetime. Or perhaps not – there may be a restriction in your timeshare contract.
However, timeshares are notoriously difficult to get rid of, and if you do manage to sell the timeshare, often it will be at a fraction of the price and a loss.
Hammerle Finley Law Firm is Here to Help With Your Timeshare and Estate Planning
Our attorneys can help with your estate planning and ensure that your timeshare is in the proper deed or trust. Save your beneficiaries any headaches and contact the experts at Hammerle Finley Law Firm today.
Virginia Hammerle is an accredited estate planner and represents clients in estate planning, probate, guardianship, and contested litigation. She may be reached at legaltalktexas@hammerle.com. This blog contains general information only and does not constitute legal advice.
