Timeshares and Trusts: Are You Leaving a Gift or a Burden?
Timeshares are among the most commonly inherited assets that beneficiaries do not want. They carry ongoing maintenance fees, have limited resale value, and can complicate estate administration. Before leaving a timeshare in your trust, talk to your beneficiaries and understand your options for exiting ownership while you are still alive.
For many retirees, a timeshare represents years of family vacations, traditions, and good memories. It is natural to assume it should pass down to the next generation.
But here is what estate planning experience shows: a timeshare is one of the most commonly inherited assets that beneficiaries did not ask for and often do not want. And unlike most assets, it is not easy to sell, give away, or simply walk away from.
If you have a timeshare and a trust, this is a conversation worth having before your estate plan is finalized or your next trust accounting is prepared.
Why Timeshares Create Problems in Trust and Estate Planning
Timeshares are unique among estate assets because they carry ongoing financial obligations rather than simple ownership.
The Core Issue: Ongoing Fees and Limited Exit Options
A timeshare is not a traditional real estate investment. When it passes to your beneficiaries, it brings:
- Annual maintenance fees that typically range from several hundred to several thousand dollars per year and often increase over time
- Limited resale value: the secondary market for timeshares is extremely thin, and many timeshares sell for a fraction of the original purchase price or nothing at all
- Transfer restrictions: some timeshare companies limit or complicate ownership transfers, making it difficult even to give the timeshare away
- Perpetual obligations: depending on the contract, the financial commitment does not simply expire
What feels like a meaningful asset can quickly become a recurring expense your beneficiaries did not agree to carry.
The Gap Between Purchase Price and Current Value
This is where expectations and reality frequently diverge.
Many timeshare owners reason: we paid $20,000 or more for this, so it must still be worth something.
In practice, many timeshares sell for a few hundred dollars on the secondary market. Some have no buyers at any price. In certain cases, owners must pay a third party to accept a transfer.
That is not just an estate planning concern. It is a liability that could land in your beneficiaries’ hands when they are least prepared to manage it.
What Beneficiaries Actually Inherit When a Timeshare Is in the Trust
If a timeshare is included in your trust and passes to beneficiaries upon your death, they typically have three options:
| Option | What It Means | Common Challenges |
| Accept ownership | Take on all obligations, fees, and responsibilities | Ongoing annual cost with uncertain exit path |
| Attempt to sell or transfer | Find a buyer or transferee willing to take it | Thin market; many properties have no ready buyers |
| Disclaim the inheritance | Formally decline the asset | Must follow state-specific timing and legal requirements; disclaimed asset then goes back to the estate |
Each option involves cost, time, or legal process. None of them are simple.
When multiple beneficiaries are involved and they disagree about what to do, timeshares can become a source of estate administration friction that extends settlement and increases costs.
Related reading: Three Ways Trust Beneficiaries Receive Their Inheritance
Before You Leave a Timeshare to Your Beneficiaries
The most important step is also the most frequently skipped: have the conversation before anything is finalized.
Do not assume your beneficiaries want the timeshare. Ask directly:
- Are they willing to use it consistently enough to justify the ongoing cost?
- Can they afford the annual maintenance fees, which may increase each year?
- Do they understand the long-term commitment and the difficulty of exiting?
If the answer to any of these questions is unclear or hesitant, that is the signal. A timeshare should never be a surprise inheritance.
Four Alternatives to Simply Leaving a Timeshare in Your Trust
If your beneficiaries do not want the timeshare, or if you are uncertain, you have options. These decisions are worth discussing with your estate attorney and a CPA who supports trust and estate planning.
1. Exit While You Are Still Alive
Work with the timeshare company directly, or with a reputable exit firm, to terminate ownership during your lifetime.
This approach may involve a fee or negotiated settlement. But it allows you to control the outcome rather than leaving the problem for your executor or trustee to manage after your death.
Be cautious: the timeshare exit industry includes fraudulent operators. Verify any exit firm thoroughly before signing anything or paying fees upfront. The Federal Trade Commission has published guidance on avoiding timeshare exit scams.
2. Do Not Specifically Allocate It in the Trust
Rather than naming a specific beneficiary for the timeshare, allow it to pass through the general estate structure. This gives your trustee more flexibility to manage or dispose of the asset rather than forcing a specific individual into ownership.
3. Build Trustee Discretion Into the Trust Language
Your trust document can authorize the trustee to sell, transfer, or abandon an asset when retaining it is not in the best interest of the beneficiaries.
This is particularly useful for assets like timeshares where the future market is uncertain. Trustees without this authority may be required to hold the asset even when it is losing value.
Consult your trust attorney to review whether your current trust language provides this flexibility. Smith Marion supports the accounting and fiduciary side of trust administration; trust document structure is a legal matter.
4. Offset the Cost for a Willing Beneficiary
If one beneficiary actively wants the timeshare and plans to use it:
- Consider allocating additional assets to offset the ongoing maintenance obligation
- Or set aside a defined fund to cover maintenance fees for a specified period
This acknowledges the asset’s real cost and avoids creating an imbalance among beneficiaries.
Timeshare Estate Planning Decision Guide
Use this to clarify your situation before making a decision.
| Question | If Yes | If No or Uncertain |
| Do my beneficiaries actively want the timeshare? | It can be part of the plan | Do not pass it on without a conversation |
| Can they afford the ongoing maintenance fees? | Proceed with planning | Consider exit or trustee discretion |
| Is the timeshare easy to sell or transfer? | Standard asset planning applies | Build in trustee flexibility |
| Does my trust allow trustee discretion on disposal? | Trustee has appropriate authority | Review with trust attorney |
| Have I explored exit options while still alive? | No further action needed | Contact the timeshare company or a verified exit firm |
What This Means for Your Trust and Your Beneficiaries
Timeshares are emotional assets. Estate planning is a financial and practical exercise.
The goal is not just to pass things down. It is to pass down value. And sometimes, the most valuable decision is what you choose to resolve ahead of time rather than leave behind.
At Smith Marion, we support clients through trust and estate accounting, fiduciary assistance, and court accounting for estates and trust matters in California. If you have a timeshare or any asset with uncertain value or ongoing obligations, we can help you understand how it fits into your estate structure from an accounting and fiduciary reporting perspective.
Contact Smith Marion to walk through your situation and move forward with a clearer picture of what you are leaving behind.
Frequently Asked Questions About Timeshares and Trust Planning
Can a beneficiary refuse to inherit a timeshare?
Yes, through a formal legal process called a disclaimer. However, timing requirements are strict. In California, a disclaimer must generally be filed within nine months of the date of death. Consult a trust attorney promptly if a beneficiary intends to disclaim.
What happens to a timeshare if no one wants it and no one disclaims it?
It becomes part of the estate or trust and must be administered. The trustee may have authority to sell or abandon it, depending on the trust document. If the trust does not address this, the trustee may need to petition the court for guidance.
Are timeshare maintenance fees a deductible estate expense?
The tax treatment of timeshare-related expenses in an estate context depends on the specific facts and circumstances. Tax outcomes vary, and this is an area to discuss with your CPA before assuming deductibility.
What if the timeshare company refuses to accept a transfer back?
Many timeshare companies do not accept voluntary returns. Your options in that case are negotiated exit, resale on the secondary market, or engaging a verified exit firm. Be aware that some exit companies are fraudulent; verify carefully before paying fees.
Does a timeshare in a trust go through probate?
Assets held in a properly funded trust generally do not go through probate. However, the trustee still has an obligation to inventory, manage, and account for all trust assets, including timeshares.