You were lucky enough to find a vacation home years ago where your family spent time every summer and during your kids’ vacation breaks. You’ve kept it as a second home in retirement and as a place for the family to gather, with your kids now bringing their own children.
As you’re beginning to develop your estate plan, you’re determining the best way to keep this home in the family without causing stress and conflict among your children. Whether it’s a small condo at the beach or a larger property, it’s still a piece of real estate that needs to be dealt with and leaving it to multiple beneficiaries can be complicated.
One way to keep the vacation home in the family and minimize tensions is to put it in a trust. This way, the trust is the owner of the home and your children (or whomever you choose) are the beneficiaries of that trust.
The choice of a trustee is crucial
You need to choose someone who will manage and care for the property according to your instructions. They’ll also need to be able to deal fairly but firmly with the beneficiaries. That could mean managing a schedule for who gets to use the home as well as determining when the home needs repairs or upgrades and deal with its eventual sale, donation or bequeathment to others. The trustee should probably be someone outside the immediate family and perhaps a professional trustee.
Setting up a trust for a property is not inexpensive. You’ll need to compensate the trustee and also leave money for property taxes, insurance, maintenance and regular expenses.
This is one option for dealing with a vacation home in your estate plan. It’s wise to talk to your children about it to determine whether they are all interested in keeping the property. Having experienced legal guidance is essential.