Special Needs Trusts Often Need a Professional Trustee

May 15, 2025

When a family sets up a special needs trust (SNT), they often assume a relative will be the best person to manage it. After all, who knows the beneficiary better? However, while personal connection matters, administering a special needs trust is a complex responsibility that involves navigating benefit eligibility rules, tax laws, investment strategies and strict reporting requirements. Special needs trusts often need a professional trustee, not a family member.

A professional trustee brings the objectivity, experience and systems needed to manage the trust in the beneficiary’s best interest, while avoiding costly missteps. In many cases, appointing a professional trustee alongside a family member offers the best balance between personal care and experienced oversight.

The Role of a Trustee in a Special Needs Trust

A special needs trust is designed to preserve a beneficiary’s eligibility for means-tested public benefits, such as Supplemental Security Income (SSI) and Medicaid, while still providing for supplemental needs like transportation, education, recreation, and medical services not covered by government programs.

The trustee is legally obligated to manage and distribute funds according to the trust document and government regulations. Mistakes—such as paying for rent, giving cash to the beneficiary, or failing to keep detailed records—can result in reduced or complete loss of benefits.

The trustee must also file tax returns, monitor investments, communicate with care providers and adapt the trust’s use as the beneficiary’s needs change. This is not a one-time duty—it’s a long-term commitment, often lasting the beneficiary’s lifetime.

Why Family Members May Not Be the Best Fit

While family members may be deeply committed to the beneficiary’s well-being, they are not always equipped to handle a special needs trust’s administrative and legal responsibilities. The emotional stress of caregiving and the pressure of trust administration can lead to burnout or mistakes.

Conflicts of interest may also arise. Disagreements between siblings, caregivers, or co-trustees can create tension or lead to disputes over how funds are spent. Even well-meaning relatives may make decisions that unintentionally disqualify the beneficiary from receiving vital support.

Family members often lack experience with trust management, government benefits and the financial tools necessary to grow and preserve trust assets. Professional trustees are trained to meet these demands and provide consistent, unbiased oversight.

Benefits of a Professional Trustee

A professional trustee—whether a corporate fiduciary, bank, or attorney—offers several advantages. They are neutral, knowledgeable and focused on compliance. Their systems are designed to track distributions, file taxes and coordinate with public agencies and service providers.

They also offer continuity. A family member may age, become ill, or be unable to continue serving as trustee, especially if the trust must last for decades. A professional trustee ensures that the administration will continue smoothly regardless of family life changes.

Some families choose a hybrid approach by naming a family member as a co-trustee or trust protector. This allows the family to provide input and maintain a relationship with the beneficiary, while the professional trustee handles technical and administrative responsibilities.

Making the Right Choice

Deciding who will manage a special needs trust should not be rushed. Consider the complexity of the beneficiary’s needs, the size of the trust and the family’s long-term capacity to manage those responsibilities.

Special needs trusts often need a professional trustee, not a family member. An elder law or special needs planning attorney can help you weigh your options and structure the trust to meet both legal standards and family expectations. The goal is to preserve benefits, maintain financial security and support the beneficiary in living independently and meaningfully. If you would like to learn more about special needs issues and estate planning, please visit our previous posts.

Reference: Special Needs Alliance (October 2012) “When a Family Member Serves as Trustee – Fair and Honest Is Not Enough”

Photo by Sora Shimazaki:

Steps to Avoid Inheritance Issues in Second Marriages

May 13, 2025

Second marriages often bring joy, stability and a fresh start. However, they can also create complicated estate planning challenges. When one or both spouses have children from previous relationships, the risk of conflict over inheritance increases dramatically. Individuals often assume that love and goodwill will prevent disputes. However, without clear legal documentation, misunderstandings, unintentional disinheritance and even litigation can follow. Protecting your spouse and your children—biological and step—requires planning that accounts for family dynamics, legal priorities and financial realities. There are steps you can take to avoid inheritance issues in a second marriage.

Understand How the Law Treats Second Marriages

State intestacy laws (those that apply when someone dies without a will) typically prioritize spouses and biological children. In many cases, if a person dies without a clear estate plan, the surviving spouse will receive a significant share, possibly even everything, leaving stepchildren with little or nothing.

Even with a will, challenges can arise. A surviving spouse may claim an “elective share,” a legal right to a portion of the estate that can override the terms of a will. Children from a previous relationship may be unintentionally disinherited if all assets pass to the surviving spouse, who then distributes them according to their own will, or not at all.

These risks are exceptionally high in cases where only one spouse brought significant assets to the marriage or when there is a considerable age difference, business ownership, or a family history of conflict.

Use Trusts to Protect Both Spouse and Children

One of the most effective tools for second marriage estate planning is a trust. A revocable living trust allows you to maintain control over your assets during your lifetime, while outlining exactly how they should be distributed after your death.

For example, a Qualified Terminable Interest Property (QTIP) trust can provide income to a surviving spouse for life, with the remainder passing to the deceased spouse’s children. This structure protects both parties: the surviving spouse is financially supported, and the children are assured a share of the estate later.

Trusts can also help avoid probate, preserve privacy and reduce the risk of disputes. Unlike a simple will, a trust allows for more detailed instructions and layered planning.

Keep Beneficiary Designations Up to Date

Many assets—like life insurance policies, retirement accounts and bank accounts—pass directly to the person named as a beneficiary, regardless of what’s written in your will. That means an ex-spouse could still receive your IRA if you never updated the paperwork.

Review your beneficiary designations after remarriage to ensure that they reflect your current wishes. In blended families, dividing assets across multiple accounts may be appropriate to benefit both your spouse and children directly.

You should also consider how these accounts fit into your broader estate plan to ensure no one is unintentionally left out.

Communicate Your Intentions Clearly

Estate disputes often stem from unmet expectations. Children may assume they will inherit certain assets, only to learn after a parent’s death that those assets were left to a stepparent. Likewise, a surviving spouse may be surprised to learn that children from a previous marriage are co-owners of the family home.

The best way to avoid this confusion is to talk openly with family members about your wishes. Explain your decisions, address concerns and show how your plan provides for all parties involved. These conversations may be uncomfortable. However, they are often the most effective way to prevent conflict.

Taking these steps to avoid inheritance issues in a second marriage can mean the difference between family harmony and chaos. Putting these intentions in writing with the help of an estate planning attorney ensures that everyone’s rights and responsibilities are legally protected. If you would like to learn more about inheritance and estate planning, please visit our previous posts.

References: CBC News (April 1, 2025) “Director Norman Jewison’s wife cut him off from family, coerced him to change $30M will, lawsuits claimed” and Marriage.com (Oct 12, 2023) “5 Tips to Avoid Inheritance Issues in Second Marriages”

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The Estate of The Union Season 4|Episode 3 is out now!

May 7, 2025

The Estate of The Union Season 4|Episode 3 is out now! The Catholic cardinals are in the process of electing a new pope. While that can seem like a riveting process, a much quieter group, Catholic Charities of Central Texas, is working behind the scenes helping the people who need it the most.

In this edition of the Estate of the Union brought to you by Texas Trust Law, we are fortunate to have Kara Henderson, Director of Marketing, for Catholic Charities of Central Texas as a guest. Kara explains the challenges faced by our fellow Texans and how her organization provides a loving waystation to move people to more successful lives.

Plus, Kara has a manner of explaining all of this in a tone and form that make it easy to “get”.

In each episode of The Estate of The Union podcast, host and lawyer Brad Wiewel will give valuable insights into the confusing world of estate planning, making an often daunting subject easier to understand. It is Estate Planning Made Simple! The Estate of The Union Season 4|Episode 3 is out now! The episode can be found on Spotify, Apple podcasts, or anywhere you get your podcasts. If you would prefer to watch the video version, please visit our YouTube page. Please click on the links to listen to or watch the new installment of The Estate of The Union podcast. We hope you enjoy it.

Texas Trust Law focuses its practice exclusively in the area of wills, probate, estate planning, asset protection, and special needs planning. Brad Wiewel is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. We provide estate planning services, asset protection planning, business planning, and retirement exit strategies.

Many Ways to Include a Charity in Your Estate Plan

May 6, 2025

Many people want to give back to their communities or support causes that reflect their values. Including charitable giving in your estate plan is one of the most meaningful ways to do that. Whether you’re passionate about education, health, the arts, or social justice, your legacy can continue to make an impact long after you’re gone. There are many ways to include a charity in your estate plan.

There’s no single right way to give. The best method depends on your financial situation, the assets you hold and your goals for your family and chosen charities. Thoughtful planning not only helps maximize your impact but can also provide tax advantages and avoid complications for your heirs.

1. Make a Bequest in Your Will

One of the most straightforward ways to give is by naming a charity in your will. This is known as a bequest. You can designate a specific dollar amount, a percentage of your estate, or a particular asset such as property or stocks. Bequests are flexible—you can update them at any time, and they allow you to support causes you care about without affecting your current finances.

2. Name a Charity as a Beneficiary

You can also name a charitable organization as a beneficiary on retirement accounts, life insurance policies, or payable-on-death bank accounts. This approach bypasses probate and allows the charity to receive the funds directly. It’s a simple and effective way to leave a gift without altering your will or trust.

3. Create a Charitable Remainder Trust

A charitable remainder trust (CRT) allows you to provide income to a beneficiary, such as a spouse or child, for a set number of years or for their lifetime. After that period ends, the remaining assets go to a designated charity. CRTs are useful for people who want to support loved ones during their lifetime and still give back to charity in the long run.

4. Set Up a Donor-Advised Fund

A donor-advised fund (DAF) lets you make a charitable contribution now, receive an immediate tax deduction, and recommend grants to charities over time. DAFs are especially appealing for people who want to involve family members in charitable decisions or support multiple causes over several years.

5. Donate Appreciated Assets

Gifting appreciated stock, real estate, or other valuable assets directly to a charity can be more tax-efficient than donating cash. When you donate an asset that has increased in value, you may avoid capital gains taxes while also claiming a charitable deduction based on the full market value.

6. Fund a Scholarship or Endowment

If you want your gift to support a specific purpose, such as education or research, consider funding a scholarship or endowment. These gifts often come with naming opportunities and provide long-term support for institutions or programs that align with your goals.

7. Involve Your Family in Your Giving Plan

Estate planning is also an opportunity to share your values with future generations. Involving your children or grandchildren in charitable giving decisions can help them understand your priorities and foster a spirit of generosity. It also helps reduce misunderstandings and promotes unity around your legacy.

There are many ways to include a charity in your estate plan. No matter how you choose to give, working with an estate planning attorney is important to ensure that your intentions are clearly documented and legally enforceable. Contact our estate planning firm to put the right planning in place now so that your charitable legacy can live on for generations. If you would like to learn more about charitable giving, please visit our previous posts.

Reference: Ameriprise Financial “Estate planning and charitable giving: Strategies to make an impact with your estate”

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Estate Planning for Single Dads

April 23, 2025

Estate planning is essential for all parents. However, when it comes to estate planning for single dads, the stakes are even higher. Without a co-parent to step in, ensuring that guardianship, financial stability and legal protections are in place is critical. A well-structured estate plan provides peace of mind by securing an inheritance, appointing a guardian and safeguarding financial assets to protect children in the event of unexpected circumstances.

Choosing a Guardian for Minor Children

For single dads, one of the most important estate planning decisions is naming a guardian for their children. If a father passes away or becomes incapacitated without legal documentation, the court will decide who assumes parental responsibilities. This process can be lengthy, stressful and may not reflect the father’s wishes.

Selecting a guardian requires considering factors such as financial stability, parenting values and the individual’s willingness to take on the responsibility. It is also wise to name an alternate guardian in case the first choice is unable to serve. Once a guardian is chosen, the decision should be legally documented in a will to ensure clarity and prevent disputes.

Creating a Financial Safety Net

Single fathers often bear full financial responsibility for their children, making it crucial to ensure that funds are available for their long-term needs. A life insurance policy is a key tool that provides financial security in the event of an untimely death. The policy’s payout can cover living expenses, education and healthcare costs, easing the financial burden on guardians or surviving family members.

A trust can also help manage assets for children until they reach adulthood. Unlike a simple will, a trust allows the father to specify how and when funds should be distributed. This prevents young beneficiaries from receiving a large sum of money before they are mature enough to handle it responsibly. Naming a trustee ensures that assets are managed according to the father’s instructions and used solely for the benefit of the children.

Establishing Power of Attorney and Healthcare Directives

Incapacity is often overlooked in estate planning. However, single fathers must prepare for situations where they cannot make medical or financial decisions. A power of attorney (POA) designates a trusted person to handle financial affairs if the father becomes unable to do so. This prevents accounts from being frozen and ensures that bills, mortgages and other obligations continue to be paid.

A healthcare proxy, also known as an advance directive, outlines medical treatment preferences in the event of a serious illness or accident. This document ensures that medical decisions align with an individual’s personal values and wishes, thereby avoiding confusion and unnecessary disputes among family members.

Planning for a Child’s Inheritance

Inheritance planning is another critical aspect of estate planning for single fathers. If no legal documentation is in place, assets may be subject to probate, a court-supervised process that can delay inheritance and incur unnecessary costs. A will clearly specifies how assets should be distributed and who should manage the estate.

For fathers with minor children, a custodial account or trust provides additional control over how funds are used. This ensures that money is allocated toward education, housing and daily expenses rather than being mismanaged. By structuring the inheritance properly, fathers can preserve wealth for their children’s future, while minimizing legal complications.

Updating Beneficiary Designations

Many assets, such as retirement accounts, life insurance policies and investment accounts, allow account holders to designate beneficiaries. Single fathers should review these designations regularly to ensure that the correct individuals are listed. Failure to update these documents after major life events, such as a divorce, can result in assets unintentionally passing to an ex-spouse instead of children or other intended heirs.

Beneficiary designations take precedence over wills, making them one of the most important aspects of estate planning. Keeping them up to date ensures that assets pass directly to the designated recipients without going through probate. Estate planning for single dads does not have to be daunting. Work carefully with an experienced estate planning attorney to do it right. If you are interested in learning more about estate planning for single parents. please visit our previous posts.

Reference: Fidelity (July 12, 2024) “Single parents estate planning”

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Tell Designated Representative Where to Access Your Estate Planning Documents

April 15, 2025

Estate planning ensures that your assets, medical decisions and financial affairs are handled according to your wishes. Those plans can only be carried out if your designated representative—whether an executor, trustee, or power of attorney—knows where to access critical documents. If estate planning materials are lost, misplaced, or inaccessible, it can create confusion, legal delays and unnecessary stress for your loved ones. Taking the time to securely store your plan and tell your designated representative where to access your estate planning documents ensures that your estate plan functions as intended when the time comes.

Why Document Accessibility Matters

Many families assume that having a will or trust in place is enough. However, if those documents cannot be located, probate courts may default to intestacy laws, meaning assets could be distributed in a way that contradicts your wishes. Similarly, if a healthcare proxy or financial power of attorney cannot be found in an emergency, your designated representative may be unable to make urgent decisions on your behalf.

Common problems arise when:

Family members are unaware that estate planning documents exist
Digital copies are stored without providing access credentials
The original signed documents are locked away in a place no one can reach
The wrong version of a will or trust is used because outdated copies were not replaced

Avoiding these pitfalls requires proactive planning and clear communication with the individuals responsible for managing your estate.

Where to Store Estate Planning Documents

Estate planning documents should be secure yet accessible to those who will need them. Some of the best storage options include:

A fireproof and waterproof home safe – Provides security while allowing easy access for trusted individuals
A safe deposit box at a bank – Offers high security but may require legal documentation to access after death
With an estate planning attorney – Ensures documents are professionally stored and available when needed
Secure digital storage – Online vaults or encrypted cloud storage can provide a backup. However, access credentials must be shared

The chosen storage location should be clearly communicated to the executor, trustee, or agent named in your estate plan to prevent any complications.

Documents to Keep Readily Available

While some documents, such as property deeds or financial statements, may not require immediate access, others are time-sensitive and should be readily retrievable. Key estate planning documents include:

Last Will and Testament – Guides asset distribution and executor responsibilities
Revocable or Irrevocable Trust Documents – Directs how assets in a trust are managed and distributed
Power of Attorney Forms – Authorizes financial decisions in case of incapacity
Healthcare Proxy or Medical Power of Attorney – Grants decision-making authority for medical care
Advance Directives (Living Will) – Outlines medical treatment preferences
Insurance Policies and Beneficiary Designations – Ensures quick access to life insurance claims
Funeral and Burial Instructions – Prevents family disputes and provides clarity on end-of-life wishes

Providing copies or access to these documents ensures that designated representatives can act swiftly when needed.

How to Inform Your Designated Representative

Choosing someone to manage your estate and medical decisions is a crucial part of estate planning. However, they must be properly informed about their role. Have a conversation to discuss:

The responsibilities and expectations of their position
Where estate planning documents are stored
Who else should be involved in financial or medical decisions
The process for updating or modifying documents in the future

If digital records are used, ensure that you share any necessary login credentials or security codes to prevent access issues. Many people choose to provide their attorney or executor with copies of their estate documents, ensuring that the most up-to-date versions are readily available. Telling your designated representative where to access your estate planning documents will give you and your loved ones the peace of mind knowing that your planning will be addressed properly. If you would like to learn more about the role of the executor, or trustee, please visit our previous posts.

Reference: Charles Schwab (Jan. 21, 2025) “How to Store Estate Planning Documents”

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The Estate of The Union Season 4|Episode 2 is out now!

April 10, 2025

The Estate of The Union Season 4|Episode 2 is out now! In this episode of the ESTATE OF THE UNION, Brad Wiewel is going to discuss gifting to grandchildren – is it a blessing or a curse?

As a great general rule, people who have grandchildren are entranced by them! They typically have plenty of photographs to share and stories to tell. These kids are perfect and always will be – right?

In this edition of the Estate of the Union bought to you by Texas Trust Law, Brad Wiewel has some advice for grandparents which may seem to be contrary to the general idea that making substantial gifts to those adorable grandkids is always the right and proper thing to do. Maybe Brad is getting a little bit jaded as he ages, or maybe his advice is worth considering – you get to decide! Is gifting to grandchildren a blessing or a curse?

In each episode of The Estate of The Union podcast, host and lawyer Brad Wiewel will give valuable insights into the confusing world of estate planning, making an often daunting subject easier to understand. It is Estate Planning Made Simple! The Estate of The Union Season 4|Episode 2 is out now! The episode can be found on Spotify, Apple podcasts, or anywhere you get your podcasts. If you would prefer to watch the video version, please visit our YouTube page. Please click on the links to listen to or watch the new installment of The Estate of The Union podcast. We hope you enjoy it.

How Does a No-Contest Clause Protect Your Will?

April 8, 2025

In a perfect world, you create your will with the guidance of an experienced estate planning attorney, your heirs inherit their legacy and everyone lives happily ever after. In the real world, however, it doesn’t always work out that way. Every year, families scrap over inheritances, says a recent article from Market Watch, “Avoid drama with your will by adding this to your estate plan.” What can you do? Consult with your estate planning attorney about the possibility of including a no-contest clause in your estate plan. How does a no-contest clause protect your will?

This can deter heirs from challenging your will by creating a no-win situation if they challenge the will in court. When a no-contest clause is included in the will, the beneficiary risks losing their entire inheritance.

The goal is to avoid challenges resulting from an emotional response to grief, which is not unusual, or a long-standing family resentment emerging after the death of a parent. People who are quick to pursue litigation will think twice with a no-contest clause.

Is it possible your heirs might challenge your will? Even if the likelihood is low, it’s worth adding the clause. Estate litigation is lengthy, expensive and emotionally draining. Second marriages, economic disparities among siblings, or estranged offspring provide fertile grounds for will challenges. However, even happy families sometimes find themselves in court battles when large inheritances are at stake.

Another factor: seniors who live longer than expected may have heirs who thought they were receiving a substantial inheritance. When there’s a smaller inheritance, the surprise can lead to litigation. Unfortunately, the cost of estate litigation can significantly reduce the value of an inheritance, making it even smaller.

Warren Buffett’s advice to talk about your estate plan with your adult children is a straightforward and sound approach for most families. Offspring taken by surprise in a time of emotional turmoil are more likely to become contentious.

You don’t have to reveal every detail to your heirs. However, you can educate them about the contents of the will and the estate in general. Letting them know about the no-contest cause and your reasons for adding it may preempt strong reactions if they don’t learn about it until after you’ve passed, and they can’t get answers to their questions.

If the family is a blended one, someone is going to be left out entirely, or there are nuances, such as one person inheriting outright while another receives distribution through a trust over time, there’s the possibility of a challenge. If you plan to give assets to someone who isn’t a family member, like a charity or a close friend, the family may unite to challenge the will.

Work with an estate planning attorney to discuss how a no-contest clause can protect your will. A no-contest clause isn’t a guarantee there won’t be a challenge after you’ve died. However, it’s a simple thing to insert into your will and reduces the risk. If you would like to learn more about no-contest clauses, please visit our previous posts.

Reference: Market Watch (March 14, 2026) “Avoid drama with your will by adding this to your estate plan”

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Managing Inherited Property can be Complicated

April 1, 2025

When a loved one passes away, their home is often one of the most significant assets left behind. However, managing an inherited property can be complicated, involving legal procedures, financial obligations and potential family conflicts.

Knowing what steps to take can help heirs navigate the probate process, handle property expenses and decide whether to sell, rent, or keep the home.

Understanding Probate and Property Transfers

1. Determining Ownership and Title

Before making any decisions, confirming who legally owns the property is essential. Ownership depends on:

Whether the deceased had a will or trust specifying beneficiaries
The state’s inheritance laws if no will exists (intestate succession)
Whether the home was jointly owned by a surviving spouse or co-owner

If the property is included in a will, it must go through probate before transferring it to heirs. However, probate may not be necessary if it was placed in a living trust or owned jointly with survivorship rights.

2. Navigating the Probate Process

If the home is subject to probate, the executor of the estate is responsible for:

Filing legal documents to initiate probate
Paying outstanding debts and property taxes before distributing assets
Determining if the house must be sold to settle debts or be transferred to heirs

Probate can take months or even years, depending on the complexity of the estate. If multiple heirs inherit the home, they must agree on how to proceed with the property.

Financial Responsibilities of Inheriting a Home

1. Covering Mortgage and Property Expenses

If the home still has a mortgage, the heir must continue making payments or risk foreclosure. Other financial obligations include:

Property taxes and homeowner’s insurance
Utility bills and maintenance costs
Homeowners’ association (HOA) fees, if applicable

If the deceased had a reverse mortgage, the estate may need to sell the home or pay off the loan before inheriting it.

2. Selling vs. Keeping the Home

Once ownership is settled, heirs must decide whether to:

Keep the home – Ideal if a family member plans to live in it or use it as an investment.
Sell the property – A common choice to divide assets among heirs and cover expenses.
Rent the home – Provides an income stream but requires property management.

A legal dispute may arise if multiple heirs inherit the home but disagree on what to do. Having a clear estate plan can help prevent these conflicts.

Steps to Take When Managing an Inherited Home

Secure the Property – Change locks, check for damages and notify homeowners insurance of the owner’s passing.
Review Debts and Expenses – Determine if the home has outstanding loans, unpaid taxes, or liens.
Get a Home Appraisal – Assess the market value to guide selling, renting, or estate distribution decisions.
Settle Ownership and Probate Issues – Work with an attorney to transfer the title to heirs or sell the property.
Decide on Next Steps – Weigh financial and personal factors before keeping, selling, or renting the home.

Get Legal Guidance for Managing an Inherited Home

Managing an inherited property can be complicated, requiring careful legal and financial planning. Whether you need to navigate probate, resolve title issues, or explore selling options, and experienced estate planning law firm can help ensure a smooth transition. Id you would like to learn more about inherited property, please visit our previous posts.

Reference: AllLaw (Aug. 03, 2022) “Transferring Real Estate After Death”

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Understanding the Downsides of Inheriting a Timeshare

March 24, 2025

Timeshares are often marketed as affordable vacation ownership. However, what happens when they become part of an estate? Many heirs are surprised to learn that timeshares do not function like traditional real estate assets—instead of inheriting a valuable investment, they may be left with ongoing maintenance fees, restrictions on resale and unexpected legal obligations. Understanding the downsides of inheriting a timeshare can help beneficiaries decide whether to keep, sell, or disclaim the property.

The Hidden Costs of Inheriting a Timeshare

Unlike traditional real estate, timeshares come with mandatory fees and restrictions, making them a financial liability rather than a valuable inheritance.

1. Ongoing Maintenance Fees

One of the most significant downsides of inheriting a timeshare is the never-ending maintenance fees, which must be paid whether you use the property. These fees:

Increase annually, often outpacing inflation
Can amount to thousands of dollars per year
Must be paid even if the timeshare goes unused

Failure to pay can result in collections, credit damage, or even foreclosure.

2. Difficulty Selling or Transferring Ownership

Many assume they can sell an inherited timeshare. However, resale is notoriously difficult. Timeshares:

Depreciate quickly and often have little to no market value
Have limited buyer demand, even for desirable locations
May include contract clauses that restrict resale or transfer options

Some heirs spend years trying to offload an unwanted timeshare, only to realize they are stuck paying fees indefinitely.

3. Potential Legal Liabilities

If a timeshare is deeded property, heirs become legally responsible for all associated costs. This means:

The management company can take legal action to collect unpaid fees
Inheritance laws may force multiple heirs to share financial obligations
Some contracts bind heirs indefinitely, making it hard to walk away

Even if a timeshare seems appealing initially, the long-term costs and restrictions can outweigh any perceived benefits.

How to Avoid Inheriting a Timeshare

1. Disclaiming the Inheritance

Heirs are not required to accept a timeshare inheritance. If an estate includes an unwanted timeshare, beneficiaries can legally disclaim it by filing a formal refusal with the probate court before taking ownership.

However, disclaiming must be done before using the timeshare or making any payments, as this can be seen as accepting ownership.

2. Negotiating a Deed-Back with the Resort

Some resorts allow heirs to return the timeshare through a “deed-back” program. This involves:

Contacting the timeshare company to check eligibility
Submitting necessary paperwork to relinquish ownership
Paying any final fees required to exit the contract

Not all resorts offer this option; some may charge a fee for releasing ownership.

3. Seeking Legal Assistance to Exit a Timeshare

If a resort refuses to take back the timeshare, an estate planning attorney can help explore other legal options. This may include:

Reviewing the contract for loopholes
Negotiating with the management company
Exploring legal exit strategies that protect the estate from liability

Many families assume they must accept an inherited timeshare. However, it may be possible to legally remove this financial burden with the right approach.

Should You Keep an Inherited Timeshare?

While most heirs choose to avoid inheriting a timeshare, some may find value in keeping one under the right conditions. It may be worth keeping if:

The location is desirable and frequently used by family members
The maintenance fees are affordable compared to rental costs
The contract allows for flexibility in usage and resale

However, long-term costs and restrictions should be carefully evaluated before deciding. Understanding the downsides of inheriting a timeshare can help you avoid a potentially costly and difficult headache. If you would like to learn more about managing inherited property, please visit our previous posts.

Reference: Yahoo Finance (Aug. 16, 2024) “Inheriting a timeshare can be bad news. Here’s why, and how to avoid it”

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Category: Beneficiaries

Steps to Avoid Inheritance Issues in Second Marriages

The Estate of The Union Season 4|Episode 3 is out now!

Many Ways to Include a Charity in Your Estate Plan

Estate Planning for Single Dads

Tell Designated Representative Where to Access Your Estate Planning Documents

The Estate of The Union Season 4|Episode 2 is out now!

How Does a No-Contest Clause Protect Your Will?

Managing Inherited Property can be Complicated

Understanding the Downsides of Inheriting a Timeshare

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