Estate Planning and Vacation Homes
A vacation home is piece of property that can cause a lot of headaches for loved one if the owner suddenly passes away. This is especially true if the home has been in the family for many years. To that end, it’s it’s important to have it very clearly laid out in your estate plan exactly what will happen to the property after you’re no longer here.
Research suggests that the vast majority of cottages and vacation homes throughout the United States are owned completely free of mortgage debt. Thus, these properties account for a significant percentage of the value of one’s estate.
For some potential beneficiaries, however, using the property is far more valuable than the amount of cash they could get from selling it. However, other beneficiaries could believe the cash value is far more worthwhile, especially if they intend to sell the property to help put their children through college. Add in the emotions that beneficiaries might have if they have spent time there themselves, and it could quickly become a difficult situation.
Planning out the transition
Keep in mind that any co-owner of a piece of real estate can force a sale. If you intend to keep the property in your family, you should be sure to leave it behind to a person or people who do not want to sell it off.
One option is to form your own limited liability company (LLC) to own the property, rather than passing it directly to your children or beneficiaries. The obligations of your children who use the property are then determined and regulated by the operating agreement of the LLC. This agreement includes owners, renting, maintenance, expense contributions, scheduling and a variety of other important considerations related to ownership of the property.
For more information on how to plan for a vacation home in your estate plan, work with the skilled Tampa will and trust lawyers at BaumannKangas Estate Law.