Keeping Your Vacation House in the Family
10 Reasons You May Want to Consider Talking to an Attorney
If you own a vacation house long enough, eventually you may watch a family saga of some sort – Mom and Dad pass away, leaving the vacation house outright to four siblings who have never gotten along. The four siblings, their spouses and children squabble over use of the house – who is going to fix the front porch, who helped (or didn’t help) with opening weekend, who paid for the refrigerator repairs? Their infighting becomes well-known amongst the neighbors. If only the family had taken steps to avoid this future disharmony! You are determined to avoid this kind of mess among your own heirs and preserve the tranquility of your retreat. Consider speaking with an estate planning attorney who understands the specific hazards that can arise when a second home is left to the next generation if:
- You have more than one child who wishes to continue to use the vacation house after you are gone.
- Your children have wildly different incomes – one is a doctor, the other a schoolteacher.
- You are in a second marriage but have children from your first.
- You realize that paying for upkeep of the vacation house would financially stress the child(ren) who would most use it or want to use it.
- Your children fight over use of the vacation house now, while you’re still in charge.
- You have some children who use the vacation house and others who never do.
- Your vacation house is a significant part of your net worth after decades of improvements and appreciation in value.
- You have more than one child, and your vacation house has been the place for family vacations and holidays for decades.
- You have a child with special needs that qualifies him or her for federal or state disability benefits.
- You want to ensure that your legacy is not just a place for your family to gather, but rather a family that continues to gather and enjoy one another’s company when you’re gone.
The first step should be to ask your children what they want to happen to the vacation house. Do they want to keep it? Sell it? Turn it into an income property? Working from there, you can designate other assets to equalize the distributions to your children who may not be interested or cannot afford to retain ownership in the vacation house. Beginning the planning process now can save a lot of stress and heartache later.