You’ve had a great time at the family vacation home over the years, and now you want to put it into the estate plan so that it is passed on to your kids. Below are three questions to ask.
How will ownership be set up?
Of course, you can just make all of your kids joint owners, but this can get complicated. They then have to work closely together, especially when making decisions about the house like when to put on a new roof or what color to paint the kitchen. This can lead to disagreements and arguments.
Another option is to put it into a trust that gives them all the ability to use the house, but that also makes one person a trustee who can make most of the decisions.
Who will cover the costs?
Homes aren’t cheap. Someone has to pay taxes, pay for upkeep and more. If you’re not sure your kids can work it out on their own — financial issues often cause problems, especially when people don’t agree on how money is being spent — you may want to add provisions to the will or trust. These can dictate how money should be paid, or you can just set up a trust fund that puts aside part of your financial estate specifically to pay for the vacation home.
Who is interested in keeping it?
A child who moved to Maine or California may not ever use the vacation home. A child who still lives in Maricopa may want to use it all the time. Talk to your kids. Don’t just assume they all want to be owners. Some of them may prefer to opt out or get some other portion of the estate instead.
As you can see, this process can get complicated. It’s best to carefully consider all of your options and plan well in advance.
Source: Time, “4 Questions to Ask Before Passing Down the Vacation Home to Your Kids,” Tracy Craig, accessed Dec. 12, 2016