Who wants to buy a vacation home that only gets to be used once a year? A wise vacation accommodation option, many families go for a timeshare for the travel and leisure opportunity. For parents, however, handing down such memorable moments to children can mean the world. So, you may be asking can you put a timeshare in a trust? Quick answer – Yes.
Putting a timeshare in a trust allows loved ones to avoid the lengthy and costly probate process. This arrangement also gives you full control of the property, allowing you to revoke or amend any previous agreement should you want to sell it instead. In a way, you are still the trustee so long as you’re breathing. This is quite useful, particularly when dealing with minor beneficiaries. Like getting insurance, this gives you an assurance that you can leave something beneficial for your family after you passed away.
Establishing Timeshare Trust
Offering practical vacation option for families, putting timeshare in a trust is akin to leaving a real estate property behind for family members to use. Just like handing down a beach house or an apartment, you also want to ensure that transfer of timeshare to a trust can be done flawlessly and with as little cost as possible to family members left behind. But even you left it in your will, it is important that a loved one knows precisely how the probate process works for a timeshare property being placed in a trust. Here’s how to do it:
- List down beneficiaries. It can either be your children, a spouse, grandchild, godchild, close friend, or a younger sibling.
- Carefully choose what type of trust you want. A revocable living trust gives you a more flexible arrangement. In various states like California, this one gives you the freedom to amend or revoke a trust.
- Appoint a trustee, the so-called “successor of the trust”. Basically, this will be the point-person to manage the trust. He or she will then, deliver said property to a designated beneficiary in accordance with the trust agreement. Commonly used trustees are family members, bank representatives, a legal counsel of the family, or close family friends.
- Make it legal. Sign the trust with the aid of an estate planning lawyer to make it a legal document. Be wary of cunning “trust specialists”. Timeshare properties can be tricky, so always look for a professional with proven credentials in handling such.
Now, you may also be wondering the difference between a timeshare deed vs a timeshare trust?
Timeshare Deed vs Trust
There’s a thin line that divides deeded timeshare property and timeshare deed in trust. The former is a common structure of timeshare ownership that conveys similar rights and stipulations as that of a real estate property. Title of the deeded timeshare property is usually granted in perpetuity, i.e., for life. This is also recorded with the land court with owners stipulated to retain a shared interest in a particular unit and common areas.
Deed in trust, on the other hand, puts the legal title of a timeshare property at a particular resort in a third-party trust. An equity ownership certificate is issued which holds guarantee in accordance with the stipulated contract term. This is quite common in countries where property ownership is denied to foreign individuals. In some vacations clubs like say Marriot’s, a collective timeshare trust is usually offered. Basically, you only pay for a certain slice of the trust but can gain access to the club’s entirety instead of just a single property. Reservations on this trust system are on a first-come, first-serve basis.
Getting back to the meat of the matter, owning a timeshare property is a valuable option for travel- and vacation- savvy families. If you already own one, you may want to consider putting it legally in a trust to ensure handing down a legacy with loved ones. When doing so, try to arrange it with a reliable timeshare trust professional to safeguard your property.