With all of the great benefits that owning a timeshare can provide, most timeshare owners are looking for a way to pass on that valuable property to their heirs after death. Yet, timeshare ownership is not as straightforward as owning your home, for example. Nor is it the same as owning a summer home. Therefore, if you are considering establishing a living trust as part of your estate plan, you should know that funding a timeshare into a living trust takes the expertise of Los Angeles trust lawyers.
How does the law define a living trust?
A “living trust” is a trust that becomes effective during your lifetime, as opposed to only becoming effective after your death. It is very common for clients to look for different ways to avoid the lengthy and expensive court proceeding. Without a trust or some other estate planning tool, it will be necessary for your estate to go through probate. A living trust is a preferred estate planning option for many clients when it comes to probate avoidance. Like other types of trusts, property transferred to a living trust will be held and managed by your trustee until it is time to transfer the trust property to your heirs.
What are the basics steps required to create a living trust?
There are a few basic, straightforward steps necessary to create a revocable living trust. Your estate planning attorney will meet with you initially in order to discuss your situation and determine what your particular needs happen to be. After doing so, Los Angeles trust lawyers can draft the trust document, which will contain all of the terms of the trust. The purpose of the terms of the trust agreement is to set out the instructions for the trustee to follow. Once the trust document has been drafted, the property must be transferred or “funded” into the trust. It is basically that simple to create a living trust if you have the assistance of one of our Los Angeles trust lawyers.
Why is it helpful to fund your timeshare to your living trust
As Los Angeles trust lawyers can explain, including your timeshare in your estate plan is a worthwhile planning decision. For most timeshare owners, the property is located in a state other than their state of residency. In order to avoid probate involving the out-of-state timeshare property, you need to include the timeshare in your living trust. This will avoid complications down the road.
What happens if my timeshare is not included in my trust?
The consequences of leaving your timeshare out of your trust can be disconcerting for your family in the future. When your timeshare property, or any other property for that matter, is not included in your trust, then your estate must be distributed through the probate administration process.
There would be a separate probate procedure in each state where you own property, including the state where your timeshare is located, in addition to any other state where your assets may be located. In other words, your loved ones will be forced to participate in the expensive and time-consuming court process, both in California and some distant state like Florida or Hawaii.
The difference between deeded and non-Deeded timeshares
If the timeshare you own is a deeded one that means you physically own a portion or percentage of the property. Non-deeded, or “right to use” timeshares only afford the right to stay at the property. Therefore, if your timeshare property goes under, and you only have a “right to use,” then you would likely lose the ability to use the timeshare program you belong to, in most situations.
How to fund a deeded timeshare into your trust
When you own a deeded timeshare it means you actually have an interest in the property, so you will be given a deed for the property. It is no different than receiving a deed for your home, or any other real estate you own. When it comes time to fund a deeded timeshare to a trust, you must obtain a new deed. This new deed will transfer the property ownership rights from you to the living trust you have established. Los Angeles trust lawyers can ensure, through your timeshare association, that there are no rules with which you must comply in order to make the transfer.
How to fund a non-deeded timeshare
Funding a right to use timeshare, as opposed to a non-deeded timeshare, can be a more difficult process since you do not actually have an ownership interest in the real estate. Basically, you can assign your rights to use the timeshare to someone else, including your trust. However, you should consult once again with your timeshare association to confirm that this type of transfer is allowed.
If you have questions regarding living trusts and time shares, or any other estate planning issues, please contact the Schomer Law Group either online or by calling us at (310) 337-7696.