Do you have a cherished cabin, vacation home, or other property which you wish to pass down to your loved ones someday?
Surprisingly to many people, leaving a home to family members can create a number of unexpected consequences for those who don’t fully weigh their options and plan far enough ahead. The vacation home may be very valuable, in terms of money, tradition, or both. Of course, where its value lies may be different for each heir.
Let’s say that a couple in Monticello wants to leave their beloved cabin to their children. They see this as an act of love, providing future generations the opportunity to gather there and continue on the traditions that were started while the couple was still living. It’s a beautiful, romantic, and idealized way to look at passing on the property.
Unfortunately, the generations that follow may have less interest or ability to keep and maintain the property than the original owners. Once the property has been passed on, it is the heirs’ responsibility to maintain it, pay annual property taxes, etc. In many cases, the heirs may simply not be able to afford this.
And what about those heirs who live too far away to enjoy the property regularly? Should they be held just as responsible for its upkeep as siblings and cousins who live nearby and are able to use it on a regular basis? What kind of alternative might be available for them?
Working with a wills and trusts lawyer here in Monticello can offer great insight into the options available…and there are options. For example, the original couple may choose to place the property into a trust, meaning that a trustee would manage the home, and (as much as possible) maintenance, taxes, repairs, etc. would be paid for out of the trust. It may even be possible for some of the heirs to be “bought out” of their share by using funds from the trust.
Another advantage of placing the vacation property into a trust is it can help if there are family tensions at play. The trustee can be someone outside of the family whose only interest really is to preserve the property and the trust in an appropriate manner. He or she may even determine the property can be rented out to generate income if the trust is having trouble paying for maintenance.
It is possible that some members of the family will simply be uninterested in the vacation property. For this reason, the wills and trusts lawyer can set up an exit strategy that allows some heirs to purchase the shares of others, even using other assets from the estate. It’s also not unusual for the third or subsequent generations to not have the same emotional ties to it as earlier generations. In preparation for such an event, the trust can include an exit strategy that allows for the sale of the property with proceeds going to living heirs.
Vacation properties in general can be a little tricky when it comes to wills and trusts administration, so choosing a Monticello lawyer who has expertise in dealing with this type of situation can make a big difference in ensuring your wishes are clear.
Have questions about the best ways to pass your property or cherished vacation homes down to the next generation? Give our Monticello estate planning law firm a call at 763-244-2949 and ask to schedule a Personal Strategy Session.
