Wills, Trusts, and Estate PlanningYour Vacation Home is a Treasured Heirloom

https://generationslawgroup.com/wp-content/uploads/2021/09/vacation-home.jpg

Vacation homes can mean many different things:  the center of cherished family memories; a reliable vacation spot; an investment for now and in the future.  Passing your beloved vacation home to future generations takes careful planning.  Not surprising, there is no one-size-fits-all planning option to ensure that this treasured real estate is protected from challenges such as estate costs and taxes, your own financial issues like lawsuits and long-term care costs, and possibly your children’s divorce, debts and/or disability.

During the time “Mom and Dad” own the home, problems are usually kept to a minimum.  They make the rules about use of the property, and they usually are footing the financial bill to keep things running smoothly.  Ensuring the successful transfer of the property to the next generation requires financial attention and extraordinary cooperation and coordination among the next level of owners.

Often a family home is left to the next generation in equal shares, just like a portfolio or cash.  However, a family home is not cash and cannot be easily divided.  Thinking about possible ownership scenarios is the first step to a successful plan.

Where to Begin

If you own a vacation home, or are thinking about investing in one, there are some questions that you should ask yourself:

Who should inherit the property?

How long do we want to plan on the next generation owning the property together?

How will the next generation of owners pay for the operating costs and upkeep?

What happens if one of the next generation of owners can’t pay their fair share?

How will ownership and management be handled?

What are the “rules” for using the property now and in the future?

Transfer using a Trust

A properly drafted trust will address important issues related to the transfer and maintenance of the property for generations to come.  This type of trust, called an Heirloom Trust, will address issues such as: allocation of ownership, governance, use of the property, stewardship of the property (setting aside enough money to maintain it) and transfer restrictions.  The purpose of an Heirloom Trust is to keep the property in the family and save it from various threats such as being sold to divide an estate or being taken in a child’s divorce.

An Heirloom Trust can also provide for a potential sale down the road.  What happens if one of the beneficiaries no longer wants to use the property?  How do they “get out”?  A well drafted Heirloom Trust will address buyout options in this circumstance and can even set the buyout price or formula.  You may also want to include optional funding sources, such as life insurance proceeds or earmark investment funds to pay for an eventual buy-out scenario.

Passing a vacation home to future generations is a wonderful, timeless legacy to leave your family.  Choosing how to pass it on is a complex process with many variables.  Working with a qualified estate planning attorney is critical to finding the most appropriate method of transferring the property to the next generation. Founded by a nurse attorney and with offices in Acton, Burlington, and Sudbury, Massachusetts, Generations Law Group helps families navigate the complex areas of estate planning and elder law to inform and protect loved ones of every generation.

 

Contact Us

GLG-logo-alt

Protecting Today What Matters Tomorrow

Locations:
179 Great Road #109, Acton, MA 01720

Law Office Map

111 Boston Post Road #101,
Sudbury, MA 01776

Law Office Map

1500 District Avenue,
Burlington, MA 01803
(978) 849-3051

Law Office Map

Website Maintenance Turek Design

© 2020 Generations Law Group | All Rights Reserved