Thousands of families across Minnesota own lake cabins and vacation homes. These properties are the source of many memories. Even when children pass into adulthood, a cabin will still retain significant emotional value, to say nothing of its financial value. Any parent who owns a vacation property must consider many factors when deciding whether to pass on the property or sell it.
A careful, clear-headed strategy will help you maximize enjoyment of the property and minimize family strife. A lawyer with experience in both real estate and estate planning can be instrumental in helping you achieve your goals.
Issues To Consider With Vacation Property
First and foremost, if you plan on passing your vacation home to your adult children, there are a few key factors to look at. These issues are:
- Which children are most likely to use the property?
- Can each child afford the expenses associated with owning or maintaining the property?
If not all of the children use the property, it may be sensible for only the children who use the property to inherit it. The child who does not inherit the property could receive other estate assets to offset the value of the property.
Maintenance and property taxes are another potential issue, particularly if one adult child earns substantially more than another. These costs can total many thousands of dollars a year. It may be that the adult child who earns less money would contribute his or her services in lieu of money. The key in creating a workable plan is to have candid discussions with all family members as to their wants and needs.
Above All, Put It In Writing
Whatever decision you ultimately make, it will be critical to create a written document outlining your plan. A written document will clearly set out each party’s rights and responsibilities and minimize the potential for later family resentment. Creating a limited liability company (LLC) or a trust may be the most effective method of passing on a property.
For years, cabin owners across the Twin Cities have put their trust in the Lang Law Office. Attorney Greg Lang has extensive knowledge of both real estate and estate planning. As a Minnesota State Bar Association Board-Certified Real Property Specialist, he has a distinct understanding of the many legal issues involved in these transactions. Call 952-470-6361 to schedule a consultation.