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Timeshares: Secondary assets that can complicate Texas probate

Everyone in Texas probably has an ideal notion of what a vacation getaway should be. For some it might be a second home on the Gulf coast. For others, it might be a condo in the desert. Timeshare properties may be the allure for others. But as we wrote about back in February, such purchases can make things complicated in probate if the owner dies.

This is especially true for any real estate that might exist in a state other than Texas. Whether it is a business asset, some sort of investment or a vacation property, the fact that it is in another state means another jurisdiction is involved. Every state has its own laws regarding probate and they can raise questions about estate administration.

The specific issue of timeshare property is one that can create particularly knotty problems. When you sign that purchase agreement you are not only signing on for the opportunity of glorious recreation time, you are likely taking on much more. You will likely face fees that go along with association living, and those fees may well increase over time. Do you know what will happen to all that in probate?

Many timeshare operations sell buyers on the idea that it is an investment opportunity. The truth is that it is a contract, and when the signatory to that contract dies the obligation for fulfilling its terms doesn't disappear. It runs for as long as the term of the contract, which could effectively be in perpetuity.

After you die, that obligation transfers to your estate and any heirs who might inherit. If bills go unpaid for too long, the timeshare management company could begin proceedings against the estate to collect what is owed. There is also the possibility that none of your heirs will want the asset. Regardless, the existence of the obligation can mean a lot of inconvenience for your estate administrator.

There may be strategies that can be employed to prevent handing these issues off to loved ones, but to know which might apply and to take advantage of them, it's important to consult an estate planning attorney.

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