Keeping Your Vacation Home in the Family, 05-31-2010
Vacation homes hold a special place in our hearts. Everyone with a vacation home in the family has memories of special times shared with family and friends. Summer weekends and holidays at the lake or mountain home give a rare chance for families and friends to bond without the distractions of the outside world.
But, without careful planning, the vacation home can tear families apart after the passing of the parents. That’s what happened to the Jackson family. Bob and Jean had purchased a lake home shortly after they got married. They spent precious times there with their children and grandchildren. It’s where their son, Bobby, took his first steps and where their daughter, Lisa, learned to fish and appreciate the outdoors. They spent most holidays and special occasions at the lake.
But when Bob and Jean died, Bobby and Lisa could not agree on how to divide the property. Their parents’ Trust said each should get ½ the value. But did that mean they needed to sell the property? Who would pay for the upkeep and do the work? If they kept it, who could use it during the holidays? Understandably, they both were emotionally attached to it. The lake home’s increased value compounded the problem because it represented the majority of the economic value left by their parents.
When the arguments escalated, the fight became more bitter and it finally ended up in court. The judge ordered a sale of the lake home. Due to inadequate planning, the Jacksons’ cherished lake home did not stay in the family but, rather, tore the family apart.
This horrible outcome could have been avoided. Since both their kids wanted the lake home, they could have had their Trust specify a shared use arrangement. The arrangement could have specified a method to divide the use and the expenses. Their Trust could have provided a fund for shared expenses. In other family situations, life insurance could provide the liquidity to allow the vacation home to go to one child while other assets went to others.
Whether your vacation home is a cottage or an estate, by the water or in the mountains, a time share or a ranch, it is an invaluable asset and the focal point of much of your family’s history. There is a right way to plan for your vacation home – like having a shared use agreement in your estate plan. Not planning, or not planning with sufficient provisions for the vacation home, like the Jacksons, is the wrong way to plan. Request a free consultation with a qualified estate planning attorney from Morris Hall, who focuses his or her practice in estate planning, to help you keep it in the family while avoiding family discord.