Whether it is a humble cabin or a modern day Taj Mahal, a family vacation getaway is more than shelter. It is a place of memories. How do you keep that special place - and the memories it holds - in the family through the generations?
Careful planning, careful planning.
While vacation homes have been the backdrop for many beautiful family memories, experts say you need to be careful in planning so the home's future is not the source of feuding.
The biggest mistake owners can make is to fail to make a detailed plan for the home's future, cautions a recent Kiplinger's Retirement Report article titled "How to Pass Down a Vacation Home."
As always, besides honesty, communication is the best policy.
Owners should meet with their adult children and spouses to create a plan for either keeping the vacation house in the family or selling it. Families also should get help from an experienced estate planning lawyer to develop ideas and plans.
If you decide to keep the house, draft a written plan to detail how to pay expenses like repairs, insurance, and real estate taxes. In the process family members should develop ways to reduce tensions over the time they spend on maintenance. Some have a rotation for maintenance work so there is a sense of fairness.
Hint: Hiring a cleaning service or property manager can also reduce hard feelings.
Deciding how to transfer the property to future generations is critical. Again, you should check with an estate planning lawyer to figure out the gift- and estate-tax implications.
Working through these types of issues in the open with everyone involved will help the family enjoy the vacation home to its fullest (for generations to come).
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri) and to download free tools to help you organize your estate, visit my estate planning website.
Reference: Kiplinger's Retirement Report (December 2014) "How to Pass Down a Vacation Home"