Ah, the holidays—good food, gifts, crafts, and more food. There’s nothing quite like being able to gather together as a family and reminisce about the past. For many people these holiday gatherings take place at a family cabin or vacation home. Oftentimes, these locations carry significant meaning for everyone in the family. Because of this, it is important for families to discuss how vacation homes will be handled when Grandma and Grandpa pass away.
All planning like this should start with bringing everyone to the table and talking. It may sound simple, but all too often, families skip this step–assuming they already know what everyone wants. However, many times adult children and their spouses have different plans in mind than what others may think. In a family with four adult children, it may be that only two of those children are interested in taking on the ongoing responsibility of maintaining the family cabin. An honest conversation about this can help avoid unnecessary difficulties in the future.
Once the family members have shared their individual thoughts on the matter, the current owners of the property (usually Grandma and Grandpa) should meet with an attorney to talk about the best way to achieve their future wishes for the cabin. There are numerous options, including a Trust, an LLC, individual owner, etc. A clear understanding of the advantages and disadvantages associated with each of these options is essential to making an informed decision about which option is right for
After Grandma and Grandpa have put a plan in place, it is essential the plan is communicated to the rest of the family. Nothing is worse than the mass confusion that ensues when someone realizes the property taxes on the family cabin are due one week after Grandma passed away and no one knows who’s supposed to pay taxes, or who actually owns the cabin now.
This holiday season, bake the cookies, wrap the gifts, put the kids to bed, open a bottle of wine, and gather around the table. Talk about your favorite childhood memories—laugh, cry, eat a cookie, and talk about the future. Talk about your kids sitting around that same table someday, and then talk about how to make it happen.