If you’re making an estate plan, you may find yourself wondering what to do with a vacation property. Maybe your family owns a cabin or a beachfront property that has been in the family for generations. How do you include this in your estate plan?
There certainly are options that you can use, but it is important to note that this can be complicated. Let’s look at some of the potential complications that may arise.
The impact of sentimental value
First and foremost, a vacation home can have a lot of sentimental value. People have fond memories of going there when they were younger or bringing their children on vacation. This can make people very emotional when trying to decide if they should sell the property or what should happen with it – but different beneficiaries may have different levels of sentimental connection.
There are different ways to transfer the property
Another complexity is just deciding how you want to transfer it to the next generation. Do you want to give it to multiple people directly so that they are co-owners? Do you want to put the vacation property in a trust? Are you interested in setting up an LLC to own the property and then giving your beneficiaries access? There are many options to consider.
It can be expensive
It’s also wise just to consider that disputes often arise due to financial expenses. Your beneficiaries and adult children may have never covered the costs of property insurance or maintenance and upkeep, even if the vacation home is entirely paid off. They need a plan to do this or it may not go smoothly.
You need to address all of these areas when creating a comprehensive estate plan. Carefully consider the legal options at your disposal.