I recently spoke to a client who had an interesting situation. Their father died with very few assets. Maybe the total was $5,000. One of the assets was a timeshare with no value but ongoing maintenance fees. Nobody in the family wanted the timeshare and they didn’t know what to do. I told them roughly the following:

My instinct is that the timeshare is just another of your father’s creditors. It’s no different than a credit card or any other creditor. You are technically liable for all creditors to the extent you receive assets. However, I believe the creditors (including the timeshare) would have to open probate to try and go after you and I think the odds of this happening are close to 0%.

You mentioned the idea of filing a disclaimer.  A disclaimer wouldn’t work as a disclaimer just pushes the problem to your kids.  Then the timeshare people might start hounding your kids.  I know you don’t want that!  Although, there are some days when I might wish to do something like that to my 7 year old daughter.  Ok, I am joking.

The way to properly fix it would be to do a small estate affidavit (California Probate Code section 13200), in Court, 6 months after death. That would get the timeshare into your name. Then give the timeshare company a deed in lieu of foreclosure. Of course you would want to set up that agreement, in writing with the timeshare company, before going through the process. Would probably cost you $1,000 in total assuming the attorney is not involved with negotiating the agreement with the timeshare company. Is it worth it to spend $1,000 to get rid of this potential liability? I don’t know. It’s the safe way of handling it. However, no guarantee the timeshare company would agree to the deed in lieu.

Plus, it’s hard to give away the timeshare, even if you found someone that wanted it, as it’s still in your dad’s name. That is where the California Probate Code section 13200 small estate affidavit would work. That can be filed 6 months after death and covers real property worth up to $20,000 (going to $50,000 on January 1, 2012).  This all assuming the timeshare is a real estate timeshare rather than a points timeshare. If it’s point then just do a California probate code section 13100 small estate affidavit which does not require the Court involvement.

Good luck. -John