Tuesday, May 27, 2014
As summer rolls around, many people make trips to their second homes by the beach or mountains for some rest and relaxation. However, a family vacation home can become a source of tension in the family unless you have a plan for transitioning the property to your heirs. Provided below are three tips to help minimize the family friction when deciding how to convert your vacation home:
- Trust but authenticate. Hold a family meeting to discuss how each of your children feels about your vacation home. It is possible that your children may want to preserve this tradition. Knowing their feelings will make it easier to decide what to do with your vacation home when you are gone.
- Look at your options. Proper planning can ensure a smooth transfer of the property. If your vacation home is owned outright, a transfer by will or deed may be easiest. However, you must also consider potential risks. For example, gifts made during life are subject to gift taxes. Make sure you look at your options and take everything into consideration.
- Set expectations. Transferring is property is easy, whereas maintaining harmony can be the challenge. In order to do this you must engage your children by writing down basic guidelines for how the house should be used and operated today and in the future.
See Northwestern Mutual, Making Memories: Keeping The Vacation Home In The Family, Forbes, May 26, 2014.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.