The weather this time of year inspires many to contemplate warm, sunny escapes. For some, this involves a timeshare property. While timeshare rights may not be as valuable as outright ownership, it is nevertheless worthwhile to consider your timeshare in planning your estate. If you have a living trust, this means taking the necessary steps to ensure that you’ve properly funded your timeshare holdings into your trust.
For many Wisconsinites who own timeshares, the timeshare property is located outside the state. In these types of situations, using a living trust as part of your estate planning can provide significant benefits. With a properly funded living trust, you may avoid probate on all your funded assets. Without it, your estate must undergo the probate administration process in each state where you own property, which would include Wisconsin, along with the state where your timeshare is located, in addition to any other states where you have assets.
This could place your loved ones in the expensive and time-consuming position of managing probate both in Wisconsin and some distant jurisdiction like Florida, Arizona, or Hawaii. While timeshares may have limited value, and sometimes maybe dealt with using a summary probate process, the process is still often expensive. Cumulative costs (including attorney’s fees) can total into the thousands of dollars for each probate process.
It is essential to fund your timeshare into your trust properly. Many timeshares are deeded. This means that you own a small fractional interest in the timeshare property and that you receive a deed for that property interest, just as you would for your house or a parcel of land. To fund a deeded timeshare, you need to secure a new deed that transfers your rights from you to your living trust. It is wise to check with your timeshare association or governing body about any rules it has related to completing this transfer.
Other timeshares are non-deeded. For these types of arrangements, you may still be able to transfer your interest into your trust. Generally, these situations simply require completing a written “assignment” document that assigns your interest in the timeshare over to your trust. Again, check with your timeshare company or association regarding what kind of rules they have.
If you have real estate holdings in multiple states, regardless of whether your properties outside Wisconsin are parcels of land, winter homes or timeshares, the prospect of multiple probate administrations can be a daunting and expensive one. A living trust may be a very helpful avenue for you, although you must take care to ensure you properly transfer your timeshares and other assets into that trust in order for it to work properly. To get thoughtful and knowledgeable answers about living trusts, trust funding, and real estate assets (including timeshares,) talk to Madison estate planning attorney Daniel J. Krause of Krause Donovan Estate Law Partners, LLC. He can help you get an effective plan that saves you and your family time, money, and stress. Contact Attorney Daniel J. Krause today.
Reach us through our website or call our office at (608) 344-5491 to schedule your confidential, no-obligation initial consultation.