If you own a timeshare, you probably purchased it so your family would have a place to vacation together and create lasting family memories. For many people, the timeshare is a place they envision their family returning to year after year. But what happens when the owner of a timeshare dies?
To know what will happen to your timeshare when you die, take a look at the deed. If it is in your sole name, or in your name as "tenants in common" or "joint tenants" with another person, without any survivorship rights mentioned, it will have to go through probate. If it's yours alone, that's one thing; if it's held together with someone else, it gets even messier.
If you own your timeshare together with someone else, say, a sibling, with no rights of survivorship, then if one of you dies, that person's interest in the timeshare goes through probate. So if your brother dies, you may find yourself owning a half-interest in the timeshare, while his half-interest passes through probate to his children.
On the other hand, if you have a joint tenancy with rights of survivorship, if one of you dies, ownership of the timeshare passes outside of probate, to the surviving joint owner. This may be the most desirable option. Even if you own the timeshare in your sole name, you can always convert it to a joint ownership with rights of survivorship so that your intended heirs will seamlessly inherit it. This is especially helpful if the timeshare is located outside your primary state of residence; otherwise, your estate might have to open a probate estate in both your home state and the state where the timeshare is.
Be aware that some states, like Florida, where many timeshares are located, require joint tenants who want to create a survivorship right to say so explicitly on the deed. Such rights may not be implied.
Before you rush out to deed your timeshare to yourself and your heirs as joint tenants with rights of survivorship, consider some risks of doing so. If your joint tenant has debt you don't know about, their creditor may sue on the debt. If the creditor gets a judgment against your joint tenant, the judgment may be recorded and create a lien against the joint tenant's property interest.
Under the law of some states, the interest of the debtor joint tenant is subject to levy and sale. This means the joint tenancy could be severed and the interest of the debtor sold, meaning that you, the original owner, could find yourself as a tenant in common with a third party you don't know. None of this, by the way, requires your consent, and you may not even know what is going on until the point of sale.
You may find this scenario unlikely, but realize that if your intended joint tenants are your adult children, they may not share their debt and financial situation with you, either out of shame or wanting to spare you worry.
A better alternative to creating a joint tenancy with a right of survivorship may be to place the timeshare in a living trust. A revocable living trust allows you to avoid probate and the potential problems of joint tenancy. Speak to an experienced estate planning attorney now to avoid problems for yourself or your heirs down the road.