Loncor Property Solutions

Should You Inherit Your Parents' Timeshare? Legal & Financial Guide

  • Home
  • Should You Inherit Your Parents' Timeshare? Legal & Financial Guide
Should You Inherit Your Parents' Timeshare? Legal & Financial Guide

Timeshare Inheritance Decision Helper

Quick Decision Guide: This tool helps evaluate whether to Keep, Sell, Exit, or Transfer your inherited timeshare based on key factors.

Recommended Action:

Quick Take

  • Inheriting a timeshare doesn’t automatically force you to keep it.
  • You can keep, sell, exit, or transfer it-each route has legal steps.
  • Maintenance fees and contract terms survive the transfer unless you formally break them.
  • Probate, tax, and consumer‑protection laws shape your options.
  • Act quickly: missing deadlines can lock you into costly obligations.

What a Timeshare Actually Is

When most people hear timeshare is a shared‑ownership vacation arrangement where multiple buyers own the right to use a property for a set period each year. It’s sold by developers, vacation clubs, or hospitality groups and is usually tied to a fixed week or a floating schedule.

Unlike a typical condo, a timeshare comes with ongoing maintenance fees recurring charges that cover property upkeep, insurance, and management costs. Those fees survive any change in ownership unless you successfully terminate the contract.

How Inheritance Works for Real‑Estate Assets

When a parent passes away, any property they owned-including a timeshare-becomes part of the estate. If there’s a valid will, the executor follows the bequest; if not, the estate is distributed under local intestacy rules.

During probate, the court issues a deed legal document that transfers title from the deceased to the heir or heir’s estate. The deed for a timeshare works the same way, but the underlying contract (the timeshare agreement) may impose additional constraints.

Legal Obligations That Follow You

Accepting the title means you step into the shoes of the original owner. The most common obligations are:

  1. Maintenance fees: These are typically due quarterly or annually and can increase each year.
  2. Resort rules: You must obey usage policies, guest limits, and any renovation schedules.
  3. Contractual commitments: Some agreements contain escalation clauses that boost fees based on inflation or resort upgrades.

If you neglect these duties, the developer can file a lien, send collections notices, or even pursue legal action.

What Can You Do With an Inherited Timeshare?

What Can You Do With an Inherited Timeshare?

You have four realistic paths. The table below outlines the pros, cons, and typical steps for each.

Options for an Inherited Timeshare
Option Key Benefits Main Drawbacks Typical Steps
Keep & Use Guaranteed vacation slot, potential for rental income Ongoing fees, limited flexibility Update deed, register with resort, set up payment method
Sell on Secondary Market Recover part of your investment, relieve fee burden Seller fees, market can be thin, buyer vetting required Hire a reputable broker, sign resale agreement, transfer ownership
Exit Program Cancel future obligations, often lower cost than selling May involve exit fees, not all resorts offer clean exits Contact developer, submit written request, pay any exit charge
Transfer to Family/Friend Keep the asset in the family, avoid market hassle Recipient must accept fees, possible tax consequences Draft transfer deed, obtain resort approval, update records

Step‑by‑Step: Transferring or Relinquishing a Timeshare

  1. Obtain the original contract: Request a copy from the resort’s management office or from the executor’s files.
  2. Verify ownership status: Check the land registry to confirm the deed reflects the deceased’s name.
  3. Decide your route: Choose keep, sell, exit, or transfer based on your financial and personal goals.
  4. Engage a qualified attorney: A probate lawyer specialist who handles estate and real‑property matters can draft the necessary paperwork and ensure compliance with local law.
  5. File the deed change: Submit the new title to the land registry, attaching any required consent forms from the resort.
  6. Settle any outstanding fees: Pay arrears before the transfer; otherwise the buyer inherits them.
  7. Confirm release: Request a written confirmation from the resort that the contract has been updated or terminated.

Skipping any of these steps can leave you liable for hidden costs or even legal disputes.

Tax and Estate Planning Implications

In NewZealand, a timeshare is considered a personal property asset. When you inherit it, the asset’s market value at the date of death becomes the “cost base” for any future capital gains tax (CGT) considerations-though NewZealand currently has no CGT, the value still matters for depreciation and insurance purposes.

If you sell the timeshare, any profit over the cost base may be subject to income‑tax rules if the sale is deemed a “business activity.” For most casual heirs, this isn’t an issue, but it’s wise to keep a record of purchase price, fees paid, and sale proceeds.

Estate‑planning wise, you can gift the timeshare to another family member. In NewZealand, gifts over the annual exemption may trigger a “gift tax” under certain circumstances, so consult a tax adviser.

Common Pitfalls and Pro Tips

  • Assuming the contract ends with the owner: Most timeshare agreements survive death unless you explicitly terminate them.
  • Ignoring maintenance fee hikes: Fees can rise 5‑10% annually; budget accordingly.
  • Relying on “free exit” promises: Scams abound; verify the developer’s official exit program and any associated costs.
  • Not checking resort resale restrictions: Some resorts require a right‑of‑first‑refusal before you can sell to a third party.
  • Skipping professional help: A specialised lawyer can save you months of back‑and‑forth with the resort and the land registry.

Next‑Step Checklist for Heirs

  1. Locate the original timeshare contract and any related paperwork.
  2. Confirm the deed status via the local land registry.
  3. Calculate current maintenance fees and any arrears.
  4. Choose an action: keep, sell, exit, or transfer.
  5. Engage a probate or real‑estate attorney.
  6. Complete the required paperwork (deed transfer, resale agreement, exit request).
  7. Obtain written confirmation from the resort of the updated status.
  8. Update your personal financial records and insurance policies.
Frequently Asked Questions

Frequently Asked Questions

Do I have to keep paying maintenance fees if I inherit a timeshare?

Yes. The maintenance fee obligation passes with ownership unless you successfully terminate the agreement through an exit program or sell the timeshare to a new owner who assumes the fees.

Can I sell an inherited timeshare without the developer’s approval?

Many contracts include a restriction that the developer has a right‑of‑first‑refusal. You’ll need to check the original agreement; if it exists, you must offer the timeshare to the resort before selling on the open market.

What is the quickest way to exit a timeshare?

If the developer offers a formal exit program, submit a written request along with any required exit fee. Some resorts have a “cancellation window” of 30‑90days where you can back out with minimal cost.

Will inheriting a timeshare affect my taxes?

In NewZealand there is no capital gains tax, but the market value at the date of death becomes the cost base for any future sale. If you sell shortly after inheriting, keep records to prove the cost base.

Can I transfer the timeshare to a sibling without selling?

Yes. Draft a transfer deed, get the resort’s written consent, and file the new title with the land registry. The recipient will assume all future fees and contract terms.

Write a comment

Back To Top