Financial considerations are necessary if you plan to leave that summer home to the kids.
While the children may have fond memories of the family vacation home, they may not be able to afford it or even want it after you pass, according to the Globe and Mail in “How to keep the cottage in the family.”
The article has a Canadian base, but the following considerations are likely to be necessary in the U.S. as well:
- Consider any tax implications for your estate and children. Both federal and state estate taxes might need to be paid as well as property taxes. It is important to ensure that money is available to pay those taxes.
- You might want to use a trust to pass your vacation home down to your family, especially if you have more than one child. A trust can preserve the property for generations and can also take care of any maintenance and property taxes.
- Make sure that your children want the vacation home. One or more of your children might have good reasons for not wanting it and you may need to equalize your estate to give them something else.
Reference: Globe and Mail (April 11, 2017) “How to keep the cottage in the family.”