A timeshare is a form of ownership in a vacation residence that lasts for a specified period of time. When asked to identify their assets, clients will typically tend to overlook their interests in timeshares. How a timeshare is funded will depend on how the timeshare was created. The best starting point is to have your estate planning attorney review copies of all documentation in your possession regarding your timeshare. An examination of the documents should identify how the timeshare was created.

Timeshares are created in one of three different methods: license, lease, or deed:

Ownership by License: Ownership of a timeshare created by a license typically gives the owner the right to use a vacation unit at a specific resort during predetermined time during the year for a specified period of years. If the timeshare is created by a license, the license agreement needs to be examined by your estate planning attorney to determine whether there are any restrictions that would prevent it from being assigned. Some license agreements may require the consent of the company that owns the resort to provide written consent in advance of any assignments. Your estate planning attorney can contact the resort company to determine what procedures they require and, if necessary, obtain their written consent to the assignment. Your attorney can also create an Assignment to effectuate the transfer to trust. Due to the complexities of time shares, we strongly recommend that you consult an experienced estate planning attorney.

Ownership by Lease: Ownership of a timeshare may also be created by a lease. The primary method of funding this type of timeshare is through assignment of the lease, but may also be accomplished by executing a new lease. Your estate planning attorney should review the original lease for any restrictions that would prevent it from being assigned. Some lease agreements may require the consent of the company that owns the resort to provide written consent in advance of lease transfer to the trust. Once consent (if necessary) is obtained, your attorney will either prepare an assignment, or a new lease that transfers the interest into the name of the trust. If the timeshare is located out of state, your estate planning attorney can secure local counsel to prepare the lease and assure that it conforms with all state laws. The lease should be recorded in the county where the timeshare is located.

Ownership by Deed: Ownership of a timeshare may also be created by a deed. Your estate planning attorney should review the original deed for any restrictions that would prevent it from being assigned. Some deed agreements may require the consent of the company that owns the resort to provide written consent in advance of deed transfer to the trust. Once consent (if necessary) is obtained, a new deed then needs to be prepared that transfers the interest into the name of the trust. If the timeshare is located out of state, your estate planning attorney can secure local counsel to prepare the deed and assure that it conforms with all state laws. The deed should be recorded in the county where the timeshare is located.

Some timeshare lease agreements may require that a title search be performed prior to assigning the lease. It is not uncommon for a lease agreement of this type to require that the title search be conducted by a particular title company. This process can be expensive and may cost in excess of a thousand dollars. Some resort companies will waive the title search requirement, however, if the new lease is prepared by their legal counsel. Although the cost of their attorneys preparing the new lease may still be substantial, it will still result in substantial savings to the client as opposed to performing a full title search.