Many people have fond memories of their vacation homes and would like to keep them in their families, after they pass away. That requires some considerations.
For many people, the best memories they have of spending time with their families is at a family vacation home when their children were still young. On vacation when people have few worries about work, they have more time to develop strong bonds with their children.
People remember these times fondly.
Many people would like to make sure those vacation homes remain in their families, so future generations can have similar experiences.
The Globe and Mail recently discussed some things to consider about how to do so in "How to keep the cottage in the family."
While the paper is Canadian, the considerations are applicable to the U.S. and include:
- Consider any tax implications for your estate and children. Both federal and state estate taxes might need to be paid, as well as property taxes. It is important to ensure that money is available to pay those taxes.
- You might want to use a trust to pass your vacation home down to your family, especially if you have more than one child. A trust can preserve the property for generations and can also take care of any maintenance and property taxes.
- Make sure that your children want the vacation home. One or more of your children might have good reasons for not wanting it and you may need to equalize your estate to give them something else.
Reference: Globe and Mail (April 11, 2017) "How to keep the cottage in the family."