Beware the timeshare trap

Beware the timeshare trap

June 10, 2022

Summer is fast approaching and that means timeshare traps are being set. I am sure you have seen them—unbelievable vacation deals where all you have to do is sit through a short “informational presentation.” We all know the vacation deal is too good to be true. And we all know the presentation will be a sales pitch. Still, every year thousands of people deliberately step into the timeshare trap and lock themselves into a lifetime of maintenance fees.

Some timeshare owners bristle when I call their beloved vacation club a trap, especially new owners. However, many of my clients find that timeshare ownership eventually becomes a burden. Ongoing annual fees and their inability to sell, or even give away, their ownership leaves them feeling trapped and frustrated. My goal with this week’s column is to help you gain some perspective before you step into the timeshare trap. The few minutes it takes to read this column may save you a lot of money and aggravation.

Stepping into the timeshare trap is easy to do. You take a nice vacation and have a wonderful time. Still glowing from the experience, you attend an informational presentation in exchange for a nice dinner or another attractive gift. The pitch is compelling. Despite your resolve, you feel a deep emotional response and think, “Wouldn’t it be lovely for my family to experience this every year? Think of the memories we would make!” Before you know it, you are signing on the dotted line.

Unfortunately, the reality is often very different. If you want to see the other side of timeshare ownership, take some time to browse the timeshare listings on eBay. Hundreds of timeshares are for sale, many for as little as one dollar. All the listings, even those for some very high-end resort names, are available for a fraction of their original selling price. Would the selling price be discounted so heavily if the owners were happy?

Maintenance fees seem to be the biggest source of dissatisfaction. One problem is maintenance fee inflation. Prior to COVID, studies show that maintenance fees have been increasing between 2 and 5 percent per year. How those fees will increase in the post-COVID world remains to be seen. However, the 2 to 5 percent inflation rate masks a more significant problem at some older resorts where fees have been rising at double-digit rates because of special assessments on owners.

Maintenance fees are relentless. Timeshare owners soon discover that the old saying about death and taxes also applies to timeshare maintenance fees—only more so. Death will relieve you of some taxes, but it will not relieve your estate or your heirs from timeshare maintenance fees. As soon as you buy a timeshare (or inherit one), you are obligated to pay maintenance fees and any other assessment levied by the board of directors. This obligation continues as long as you own the timeshare, whether you use the timeshare or not.

Dying with a timeshare in your estate complicates things for your heirs. Leaving your timeshare to your heirs means you also bequeath to them the obligation to pay the annual maintenance fees. An heir can disclaim the inheritance, but the estate is still liable for the maintenance fees. Since the executor of an estate is responsible to pay all claims on an estate before a final distribution of the assets, settling the estate may be drawn out until the disclaimed timeshare can be sold or given away. With this in mind, if you have a timeshare in your estate, you may want to have a conversation with your heirs regarding how the timeshare might complicate their lives.

What is the solution? The best strategy is to stay clear of timeshares. If you already own a timeshare, you have three choices: 1) try to sell it using a broker or a website like; 2) try to rent it; or 3) contact the owner services department of your timeshare to see if they will buy it back or cancel it. In recent years, more timeshare managers have opted for the third choice. If these options fail, you may benefit from engaging a timeshare cancellation firm. But be careful! There are plenty of timeshare exit scammers that promise a lot more than they deliver. With timeshares, it seems like the scammers get you coming and going.

Steven C. Merrell MBA, CFP®, AIF® is a Partner at Monterey Private Wealth, Inc., a Wealth Management Firm in Monterey. He welcomes questions that you may have concerning investments, taxes, retirement, or estate planning. Send your questions to: Steve Merrell, 2340 Garden Road Suite 202, Monterey, CA 93940 or email them to