Hawaiian Timeshares in California Divorce

In dissolution of marriages and divorces timeshares in Hawaii are awarded to one spouse. Tip Sheet by Mark W. Bidwell on how to transfer Hawaiian timeshare ownership due to divorce.

Marital settlement agreements for dissolution of marriage and divorce divide ownership of assets of the marriage between the spouses.  But the change of ownership of a Hawaiian timeshare is not complete until the State of Hawaii’s database and the resort management’s accounting records are updated.

Hawaii maintains a statewide database of who owns each timeshare in Hawaii. This database is final and conclusive. The database is maintained by the Bureau of Conveyances. The Bureau of Conveyances will only update its records upon receipt of a “deed.”

A deed is at a minimum a 8 ½ inch by 11 inch paper in a format defined by the laws of Hawaii. The deed is signed by the non-owning spouse. His or her signature must be notarized and the notary must be either on the deed or attached to the deed.

 

The deed must also include the “interval control number” and “legal description.”  The legal description for timeshares in Hawaii is most often several pages in length and uniquely identifies the timeshare.

There are two types of deeds, warranty deeds and quit claim deeds. Warranty deeds promise good title and the absence of debt and liens. Quit claim deeds convey property “as is.” Because the spouses in the divorce have established the condition and value of the timeshare in the divorce process, the best deed is the quit claim deed.  The conveying spouse is basically saying: “here is the timeshare as it is, in whatever condition it is in as we agreed in the divorce settlement.”

 

The deed must be recorded with the Bureau of Conveyances.  With the deed “Form P64B — Exemption from Conveyance Tax” must be submitted.  The Bureau records the deed and assigns a unique number and date of recording. A copy of the recorded deed is submitted to the resort management for them to update their records. The resort management may have its own forms to be completed and may charge a fee for updating their files and accounting records.

 

Until ownership of the Hawaiian timeshare is changed both spouses are responsible for the maintenance fees. The owning spouse cannot sell or transfer ownership.  On the death of the owning spouse the other spouse will inherit the Hawaiian timeshare. To make the divorce final and complete the quit claim deed must be prepared and recorded with the Bureau of Conveyances.

Posted on Dec 20, 2013

Use quit claim deeds for transfers

This Tip Sheet advocates the use of quit claim deeds to fund trusts, remove a spouse as co-owner pursuant to divorce or dissolution of marriage, and to give away a timeshare.

A quit claim deed transfers property ‘as is.’ Quit claim deeds do not contain any implied warranties of debt outstanding or good title. An owner who ‘quit claims’ real property simply conveys whatever ownership interest he or she has along with any debt or loans secured by the property. A quit claim is the easiest and cheapest way to transfer ownership between parties who personally know each other.

Quit claim deeds can be used to give away timeshares in Hawaii. Timeshares are most often gifted to children of the owners. Other owners want to gift to nieces, nephews, other relatives or friends. Sometimes a ‘gift’ occurs when the timeshare owner sells the timeshare for nominal value.  

A quit claim deed works in gifting because little or no money is exchanged and the parties know each other. Gifting may have income tax, capital gains tax or gift tax consequences. Owners are advised to consult with a tax accountant for tax consequences of gifting a timeshare by quit claim deed.

Quit claim deeds can be used to fund trusts and avoid probate. Hawaiian timeshares not owned or titled in a trust are at risk for probate.  A timeshare must be transferred into trust while the person is still living.  A quit claim deed works to fund a trust because no real change in ownership occurs. What is changed is how title is held.

Use quit claim deeds to remove a former spouse as owner of a timeshare. A timeshare awarded to one spouse in a divorce must have the non-owning spouse removed as owner. Until the former spouse is removed from title the owning spouse cannot sell or transfer the timeshare and the former spouse will inherit the timeshare in the event of death.  Quit claim deeds work in divorce because the parties have complete information and disclosure on the value of the timeshare and amount of debt outstanding.

Posted on Dec 20, 2013

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