For some people, deciding what to do with the family vacation home is one of the most difficult decisions in their estate planning. Whether you have a place up in New England where you spend holiday vacations, a beach house in the Hamptons where you spend part of every summer or someplace upstate that’s been handed down through the generations, you may feel strongly about keeping it in the family.
So what are your options? It depends on your family.
You may want to first find out if one of your adult children wants it. If you have just one child, or just one who wants the home, that’s a fairly easy conversation. If they do want it, you can leave it to them or go ahead and gift it to them now. Just be aware of the tax implications for them.
Placing the property in a trust
If you have two or more children, and they are unanimous in wanting to keep the home in the family, your best option may be to place the property in a trust. When people choose this option, it’s often best to choose a third-party trustee.
This can help eliminate the possibility of family squabbles because the trustee would be the one managing and making decisions about the property based on the wishes you detail for them. You’ll need to provide some amount of compensation for the trustee (which can be a financial institution or other corporate entity) for the time and work.
These are just a couple of options. Whether either of them applies to your family or you’re looking at a completely different scenario, it’s crucial to have experienced legal guidance as you handle this and other assets in your estate plan.