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Wednesday, January 21, 2015

Top Ten Reasons Why Estate Planning Should Top Your New Year's Resolutions

Did you make any New Year's Resolutions this year? If you're one of the millions of people who like to get organized and set priorities at the beginning of each new year, take a look at this article by Ontario lawyer Donna Neff. She gives ten good reasons why estate planning should be on your list of must-do plans for this year.

4 comments:

  1. Dear Lynne,

    Thank you for so generously sharing your knowledge and expertise on this blog. One piece of advice I would like to pass on to your readers is to consider the disposition of any timeshare property in their estate plans.

    I am currently the executor of a near-insolvent estate with a timeshare property in Florida. (The other assets of the estate are a house with encumbrances that exceed its current appraised value and some promissory notes that are proving difficult (probably impossible) to collect.There are also two unsecured lines of credit.)

    The timeshare has a market value of nil, as far as I can determine (searching EBay for sold listings in that area.) To sell or give the property back to the resort or to transfer the title to a beneficiary, it would have to go through ancillary probate in Florida ($1500-$2000 USD), maintenance fees would have to be paid ($1050 USD), as would transfer/closing costs (est. $500 USD).

    So, if your readers own timeshare property, my advice would be:

    - find out the current market value of the timeshare and its ongoing maintenance fees

    - determine the probate laws of the place where the timeshare is located

    - estimate any other costs such as transfer fees, closing costs

    - ask if any potential beneficiaries would like to own the timeshare and its associated costs.

    Then decide if your best bet is to dispose of the timeshare before you die. Had the friend for whom I am executor had done so, the cost would probably have been under $500 USD.

    Thank you!

    p.s. I have given this advice to two friends who also own timeshares. They have ignored it, believing their timeshares have more value than the market shows and that their children really want this ongoing "perpetual" obligation.

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    Replies
    1. Thanks very much for this advice to readers, and I support your comments completely.

      You raise a couple of really interesting questions in your last paragraph. One is that people ignore your advice, regardless of the fact that it's accurate and timely. Welcome to my world! :) People are really good at convincing themselves that assets "must" have value. I've seen someone leave a mineral title worth $1.39 to four kids because it "must" be worth more than I'm telling them. The same holds true for time shares. They generally don't have a lot of value compared to the cost of transfer and administration.

      Your other excellent point is that they believe the kids really want to own the timeshare. If they only knew how wrong almost everyone is about that assumption. Maybe one of the kids will value it. Maybe none will. But they simply cannot even fathom the pain in the ass the kids will have if they ALL own a title that has little or no value, and that they can't all use during the time available. Putting all the kids' names on an asset doesn't even work for local, easily accessible assets; putting them all on a timeshare is absolute punishment.

      When people ask me if they should leave assets like this to all the kids, I usually answer, "sure, if you hate them".

      Lynne

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  2. Just came across this discussion as we SO would love NOT to have our timeshare left to our children upon our death(s) since we find it a pain in the ars and we know that they don't want the burden of it. Problem is, how do we avoid this. When it was mentioned....."So, if your readers own timeshare property, my advice would be: dispose of the timeshare before you die."

    How in the world can we do this.??(dispose of it).
    NO ONE wants it!!!

    I would love to just walk away from it and avoid paying the yearly maintenance fee but fear the repercussions(collection agency)since we have impeccable credit.

    HELP!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    ReplyDelete
    Replies
    1. Wow. I've heard some stories from timeshare owners having problems getting rid of them, but yours sounds pretty bad. Do I think you should walk away and risk your credit? No. Do I have any ideas about how to sell something nobody wants? No. I wish I could be of more help, but there isn't much I can do.

      Lynne

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