ESTATE PLANNING FOR YOUR VACATION HOME
Your second home in Prescott, San Diego or elsewhere may have been a peaceful refuge for you but it can quickly turn into an ugly nightmare for your children in the future. A recent client faced this situation where poor planning in the transfer of a home resulted in multiple owners and a total inability to make decisions. As one recent article discusses, clients must thoughtfully consider their objectives, goals and plans to avoid nightmares in the future (ARTICLE HERE)
WHAT SHOULD YOU THINK ABOUT?
Below are some tips to consider
- Distance is one simple yet easily overlooked issue. If beneficiaries are not closely located to a property, will they still have an interest in owning, maintaining and using a property?
- Ultimate Result.
- Put simply, what is the end goal being sought? Is the goal for family to have a location to visit with one another? Is the goal to keep property in the family indefinitely? Is there an investment motivation? These varied goals can change how property should be planned for.
- Who is in charge of making decisions for the property? What is the process for making important decisions about upkeep, use or possible sale? Identifying decision makers and providing them appropriate guidance and authority is critical to avoiding disharmony among beneficiaries. If the process is unclear or undeveloped, it can quickly lead to disagreements.
- Your View and Their View
- While you may feel very attached to your second home, your children and beneficiaries may have different interests, lifestyles, schedules and feelings. It is important to consider your interests and those of others to find the right balance.
There are many ways to transfer property, whether through an entity like an LLC a revocable living trust, other types of trusts or other means. No matter how the transfer is performed, the issues outlined above need to be considered and addressed.