As vacation home purchases increase drastically across the country, it’s important to consider how this asset impacts your estate plan. While inheriting a vacation home can be an incredible gift, it can also cause problems and division within a family. Advance planning is vital to help prevent any potential family conflict.
Whether it’s an argument of keeping or selling the property, a difference of opinion can cause great division and hurt feelings in a family. So, how can you prevent this from happening?
There are several ways you can resolve this within your estate plan. It depends on what works best for your family. However, it’s important to talk about your options with your family now. Discuss if everyone agrees with how to proceed and make those decisions before updating your estate plan.
Below are a few options for incorporating your vacation home into your plan.
Trust
When you put property into a trust, it will allow you to name one or two heirs to manage the property for the family. You can choose from several trusts (living, irrevocable or qualified personal residence), each offering their own benefits depending on your needs. A trust will avoid probate and allow your vacation home to remain in the family. You can choose to put funds into the trust for upkeep and repairs or leave a trustee responsible for those decisions.
Life Estate
If someone in your family wants to keep the vacation home, you can transfer it to them now as a life estate. This allows you to continue using it during your lifetime but leaves it to them upon your death.
Sell
Sometimes keeping the property in the family simply isn’t the best option. You can direct the vacation home be sold within a year of your death. This gives your family the option to purchase the home in a “first right of refusal,” but allows it to be sold if it isn’t the right fit for your loved ones.
Whichever option you choose, it’s important to speak with an estate planning attorney to make sure you are choosing the right options for your situation. To book your personalized planning session to discuss your situation, contact us today. We’ll help you create a plan that ensures your assets are protected for your family.
