Timeshare ownership can provide many years of memorable holidays and family enjoyment. However, when a timeshare owner passes away, the administration of that interest within a deceased estate can present unexpected challenges for both executors and heirs.

Unlike traditional investments or immovable property, a timeshare is often a difficult asset to realise and may become a source of frustration during the winding up of an estate. Executors frequently encounter situations where beneficiaries do not wish to inherit the timeshare, yet transferring, selling, or relinquishing the interest is not always straightforward.

A timeshare interest owned by the deceased forms part of their estate and must be reflected in the estate inventory and Liquidation and Distribution Account. The executor is responsible for determining the value of the timeshare and dealing with it as an estate asset in accordance with the deceased's Will or, where there is no Will, the Intestate Succession Act.

As with other estate assets, the executor cannot simply ignore the timeshare because it has little or no market value. The asset must be properly administered before the estate can be finalised.

What Happens If an Heir Does Not Want the Timeshare?

In many cases, beneficiaries are reluctant to accept a timeshare inheritance.

This is often because modern travellers prefer flexible accommodation options, and many timeshare interests have limited resale demand. While a holiday week may have sentimental value, an heir may not wish to assume the ongoing financial obligations associated with ownership.

When an heir declines to take transfer of a timeshare interest, the executor may need to explore alternative options, including:

• Selling the timeshare to a third party;
• Finding another beneficiary willing to accept the interest;
• Transferring the interest to another family member;
• Negotiating with the timeshare resort or management company.

Unfortunately, these solutions are not always readily available.

Timeshares Can Be Difficult to Sell

One of the biggest misconceptions surrounding timeshare ownership is that it can easily be sold after death.

In reality, the secondary market for timeshares is often extremely limited. Many timeshares attract little buyer interest and may remain unsold for extended periods. In some cases, the cost of advertising and transferring the timeshare may exceed its actual market value.

Executors frequently find themselves in the difficult position of attempting to dispose of an asset that has continuing expenses but very limited resale prospects.

This can create delays in finalising an estate, particularly where the timeshare cannot be distributed to an heir and remains registered in the deceased's name pending a suitable solution.

The Burden of Annual Levies

A significant consideration is the ongoing levy obligation.

Most timeshare schemes impose annual levies which cover maintenance, management fees, insurance, and resort operating costs. These levies continue to accrue even after the death of the owner.

During the administration process, the estate generally remains responsible for these costs until the timeshare is transferred or otherwise disposed of. Depending on the estate's liquidity, these levies can become an ongoing drain on estate funds.

In circumstances where an estate is already experiencing liquidity constraints, a timeshare can become a financial burden rather than an asset.

Can the Estate Simply Relinquish the Timeshare?

Many families assume that they can simply hand back the timeshare to the resort or management company if nobody wants it. Unfortunately, this is not always possible.

The terms of the timeshare agreement and the policies of the managing body will determine whether surrender is permitted. Some resorts may accept a relinquishment subject to certain conditions, while others may refuse to take the interest back.

Even where a relinquishment option exists, the process may involve:

• Outstanding levies being settled in full;
• Administrative fees;
• Transfer documentation;
• Formal approval by the management association or body corporate.

Consequently, a timeshare cannot always be abandoned or removed from the estate merely because it is unwanted and a deceased estate cannot be fully wound up until all assets have been properly dealt with. Where a timeshare remains unresolved, the executor may be unable to finalise the administration process.

Executors are required to account for all assets forming part of the estate and ensure they are appropriately transferred, sold, or distributed before the estate can be brought to a conclusion.

Estate Planning Considerations for Timeshare Owners

Individuals who own timeshare interests should consider discussing these assets with their heirs during their lifetime.

Important questions include:

• Do the intended beneficiaries wish to inherit the timeshare?
• What are the annual levy obligations?
• Is there a realistic resale market?
• Does the resort permit surrender or relinquishment?
• Would it be preferable to dispose of the timeshare during the owner's lifetime?

Having these discussions in advance can prevent significant delays and frustration for family members after death.