DEAR BRUCE: Thank you for your column on time shares. My husband and I thought we were immune to buying such a thing, but we were convinced to buy one in Mexico a couple of years ago. The ownership has some sort of corporate entity in San Diego, so it is not entirely a foreign-owned corporation. We have used it a bit, so are not too unhappy that we have it, but it lasts another 20 years or more (every-other-year occupancy).
We have three children who will share in our estate, but I wonder what will happen if they collectively refuse to pay the maintenance fees? Are heirs ever taken to court for nonpayment? We hadn't thought to mention the time share in our wills. Would mentioning it (or not mentioning it) in a will be a way to dispose of it? It is not something they will compete over! -- A.K., Beverly Hills, Fla.
DEAR A.K.: I am unhappy for you to the extent that, like a lot of people, you went to a pitch and weren't as immune as you thought. At least you've enjoyed your time share for a while.
You would find it next to impossible to sell your time share. That's just the way it is. There are companies that specialize in selling them, but most, if not all, want money upfront, which I would never agree to pay.
You can leave the time share, depending on how it is established, to someone in your will. However, if your children have no interest in it, don't leave it to them.
Even if you were to leave the time share to them, be assured that the children cannot be compelled to accept the legacy. The attorney handling the estate can show them how to decline it. You should consult your attorney about whether your estate can or would be assessed for the time-share fees after your death.
DEAR BRUCE: I am a recent reader, so I don't know if you have answered my question before.
The few articles I have read on how to invest never include gold. I have been a "gold bug" for years and finally saw an opening to get back into that market when gold was just under $300.
When I suggest to my friends that they buy gold, the usual response is that it pays no dividend. Considering the huge gains in these last years, it seems you could buy gold coins and sell them at a profit, thereby making what would be considered your "dividend" at a far greater return than is now available.
I would be interested in any comments you would care to make on this subject. -- J.G., via email
DEAR J.G.: Your friends are correct when they observe that there is no dividend, and you are correct in pointing out that gold has increased a great deal over the last few years. However, in my opinion, precious metals should not be considered an investment, but a speculation. Among other things, they show a profit only when sold. They also may incur costs in storing them safely.
I have no problem suggesting that a minor part of your investment could be in metals, with you taking possession of them. I would not be interested in the firms that store the metals for you, given that a significant number of companies that offered this service went broke.
It is completely true that the values of gold and other metals have gone up, but they also have gone down. If you were around 30 years ago, you saw the silver market hit close to $50 an ounce. When there was an accusation that a couple of people were trying to corner the market, it dropped to almost $5 an ounce.
If you are trying to be a serious investor in the metals market, there are some things you should know. Expenses are involved that you may not think of, such as assaying for gold bars. A lot of people who invest restrict themselves to numismatic value, enjoying gold coins not only for their monetary value but also as works of art.
(Send questions to email@example.com or to Smart Money, P.O. Box 7150, Hudson, FL 34674. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.)
(The Bruce Williams Radio Show can now be heard 24/7 via iTunes and at www.taeradio.com.)
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