What is a Timeshare:
A Timeshare may take different legal forms. In broad terms, a timeshare may be documented as an interest in a property for instance perhaps by deed (where you own an actual legal interest a property) or may simply be a contractual ‘right to use/ occupy’ for a certain period of time, without you having any legal interest in the property itself.
A timeshare is best described as having a ‘shared ownership’ in a property. They are typically offered by companies who own multiple vacation properties and offer allotments of use/ occupation to different people at different times. So, ownership of the properties themselves often stays on a freehold basis with the company itself, but they in turn then offer the timeshare/ lease to multiple people who then occupy those properties.
Timeshares can be offered in relation to many different types of properties, such as vacation resorts, condominiums, apartments, and campgrounds.
So in essence, a Time-share is a form of ‘fractional ownership’, where you purchase the right to occupy a property over a specified period of time.. For example, if you purchase a one week timeshare you own a 1/52th of the unit. Buying one month equates to 1/12th ownership.
How a Timeshare can operate in practice:-
So, as detailed above, timeshares confer upon you/ the buyer the right to an often-annual exclusive use of a property for a defined period that is generally measured in one-week periods. Timeshares typically use one of the following three systems:
Fixed Week
A fixed week timeshare gives you the right to exclusive use of a property for a specific week (or weeks) each year. The main advantage of this system is that you can plan an annual vacation at the same time each year, but it can be very difficult to change the fixed week to another period if required.
Floating Week
A floating week timeshare gives you exclusive use of a property for a week (or weeks) during a pre-defined period or even throughout the year. While it is more flexible than the fixed week system, the "floating week" may not be available during the busiest times of the year and may need to be reserved well in advance to ensure availability.
Types of Timeshare Ownership
Timeshares are typically owned either by Deed or lease with the particulars set out in an accompanying Legal Agreement.
Shared Deed Ownership
A shared deed ownership typically provides for each buyer a percentage share of the physical property, corresponding to the time period purchased. For example, a resort condominium which can be a luxury hotel for instance will have a number of rooms/ units which can be sold in timeshare increments of one week (so can technically have a total of 52 separate deeds). Where you have such a shared Deed ownership you can typically sell this on during your lifetime or gift it to another on your death. The Legal Agreement and Deeds themselves will make this clear and set this out in more detail.
Shared Leased Ownership Interest
Shared leased ownership interest entitles you to use a specific property for a fixed or floating week (or weeks) each year for a certain number of years. With this system, the timeshare developer retains the legal freehold title to the property, unlike the shared deed ownership system as above where you own the legal title. Property transfers or re-sales are also more restrictive than with a deeded timeshare. As a result, a leased ownership interest may have a lower value than a deeded timeshare and cannot always be passed on in the event of your death and in your Will. Again, what is relevant is the Legal Agreement itself.
Time Shares and Will Drafting
So, in essence time shares can form part of a person’s estate both in their lifetime and therefore be dealt with in their estate on death. What is relevant is the type of timeshare that is in place and what the specific legal Agreement sets out. If you have a timeshare you will need to ensure you take specific legal advice to enable your legal advisor to check the position for you and advise you accordingly.