Michigan Estate Planning Blog

Our Summer Place – Estate Planning For The Family Vacation Home Mid-Michigan

Ah, the family vacation home. Whether woodsy cabin, salty beach house, or just plain relaxing place out of town, few places prove to be so powerfully uniting for a family. Then again, there also are few places where it is easier to get into a family fight. As it turns out, a vacation home can become a sore spot when it comes to planning for it in your estate. Estate planning is about planning for three things: the needs of your family, the straightforward assets you have, and the difficult assets you have (whether to transfer, own or both). Curiously, planning for your vacation home is about all three of these things in one. Forbes recently considered the precarious balance between getting it right and getting the family into a fight over the vacation home in an article titled “The Family Cabin: Private Retreat Or Isolated Battleground?” To plan for the vacation home, as with the family home, the family business, or anything truly precious, it pays to plan openly with your family and to plan decisively. Some family members may not want the house, and some might not be able to keep the house even if you gave it to them. On the other hand, perhaps everyone wants it. Having an open discussion within the family, or even just one member at a time, allows you to uncover whether what they want is what you want for them and vice versa. After conducting your research, design and implement your plan. Once everything is in place and the ink has dried, then inform them of your plan and stick to it. Some legal tools to consider include trusts, like a QPRT (Qualified Personal Residence Trust), or perhaps formal business entities to own the vacation home and share it amongst your heirs. There is a lot of room for creativity. Take a look at the original article and begin exploring this subject with your family. Regardless, be sure to enjoy the rest of these warm summer days wherever your family vacation home is.

Reference: Forbes (August 12, 2013) “The Family Cabin: Private Retreat Or Isolated Battleground?”

For more invormation, see www.jerryreiflawyer.com

 

 

Our Summer Place – Estate Planning For The Family Vacation Home Saginaw, MI

Ah, the family vacation home. Whether woodsy cabin, salty beach house, or just plain relaxing place out of town, few places prove to be so powerfully uniting for a family. Then again, there also are few places where it is easier to get into a family fight. As it turns out, a vacation home can become a sore spot when it comes to planning for it in your estate. Estate planning is about planning for three things: the needs of your family, the straightforward assets you have, and the difficult assets you have (whether to transfer, own or both). Curiously, planning for your vacation home is about all three of these things in one. Forbes recently considered the precarious balance between getting it right and getting the family into a fight over the vacation home in an article titled “The Family Cabin: Private Retreat Or Isolated Battleground?” To plan for the vacation home, as with the family home, the family business, or anything truly precious, it pays to plan openly with your family and to plan decisively. Some family members may not want the house, and some might not be able to keep the house even if you gave it to them. On the other hand, perhaps everyone wants it. Having an open discussion within the family, or even just one member at a time, allows you to uncover whether what they want is what you want for them and vice versa. After conducting your research, design and implement your plan. Once everything is in place and the ink has dried, then inform them of your plan and stick to it. Some legal tools to consider include trusts, like a QPRT (Qualified Personal Residence Trust), or perhaps formal business entities to own the vacation home and share it amongst your heirs. There is a lot of room for creativity. Take a look at the original article and begin exploring this subject with your family. Regardless, be sure to enjoy the rest of these warm summer days wherever your family vacation home is.

Keeping The Family Vacation Home In The Family

For those of you with still-fresh memories of this past Labor Day weekend out at the family cottage, now may be the time to take action to ensure that future Labor Days and summer outings will continue to be enjoyed by your family long after you are gone. In other words, ensure the future of the family cottage and the peace and domestic tranquility of your family through proper estate planning. So, how do you do that? The Wall Street Journal Online recently touched on the topic. The best way to leave an inheritance that includes a family vacation home depends on who will be inheriting it. That is the first essential decision. For example, are you leaving it to one family member or to several? Who will be interested in the home (or more interested in your portfolio)? Who will be able to use the home? The adult child living in California might not be able to enjoy the Cape Cod cottage. This is especially true if they have their own vacation property, or if they wouldn’t be able to afford the upkeep, insurance and taxes. If you’ve settled on a single person to inherit the family vacation home, then it is relatively easy: you can either gift it during your lifetime (before 2013 would be prudent), or leave it through your Last Will and Testament or Revocable Living Trust. If you are leaving it to multiple beneficiaries, like an entire generation of your family, then perhaps consider establishing a specific arrangement for such ownership. For example, many families find the Limited Liability Company (LLC) or various forms of trusts to be practical tools. If all of the heirs are adults, then an LLC might be a better bet as it allows members a more equal say in what to do, while still providing a framework for decisions or an organizational structure through the use of a solid operating agreement. Of course, you could take it a step further and form a trust that owns an LLC that owns the home, or even specific trusts like a Qualified Personal Residence Trust (QPRT.). On the other hand, if there are young children in the family, then a trust with a long-term duration might be better. Why? Because it allows parents to pass on the vacation home to their children while still appointing an adult in charge as trustee. In addition, properly drafted with “spendthrift provisions,” such trusts can protect the family home from the potential divorces, lawsuits and bankruptcies of the heirs. For many, a family vacation cottage is a place of many happy memories shared over a long family history. As a result, it just has to stay in the family. Once you start down the path to make that happen, however, don’t wander too far without appropriate legal counsel. You will need experienced help to navigate the details, figure out what’s best for your unique situation, and eventually put ink to paper.

Reference: The Wall Street Journal Online (September 4, 2011) “Create A Plan To Pass On The Family Cottage

Keeping The Family Vacation Home In The Family

For those of you with still-fresh memories of this past Labor Day weekend out at the family cottage, now may be the time to take action to ensure that future Labor Days and summer outings will continue to be enjoyed by your family long after you are gone. In other words, ensure the future of the family cottage and the peace and domestic tranquility of your family through proper estate planning. So, how do you do that? The Wall Street Journal Online recently touched on the topic. The best way to leave an inheritance that includes a family vacation home depends on who will be inheriting it. That is the first essential decision. For example, are you leaving it to one family member or to several? Who will be interested in the home (or more interested in your portfolio)? Who will be able to use the home? The adult child living in California might not be able to enjoy the Cape Cod cottage. This is especially true if they have their own vacation property, or if they wouldn’t be able to afford the upkeep, insurance and taxes. If you’ve settled on a single person to inherit the family vacation home, then it is relatively easy: you can either gift it during your lifetime (before 2013 would be prudent), or leave it through your Last Will and Testament or Revocable Living Trust. If you are leaving it to multiple beneficiaries, like an entire generation of your family, then perhaps consider establishing a specific arrangement for such ownership. For example, many families find the Limited Liability Company (LLC) or various forms of trusts to be practical tools. If all of the heirs are adults, then an LLC might be a better bet as it allows members a more equal say in what to do, while still providing a framework for decisions or an organizational structure through the use of a solid operating agreement. Of course, you could take it a step further and form a trust that owns an LLC that owns the home, or even specific trusts like a Qualified Personal Residence Trust (QPRT.). On the other hand, if there are young children in the family, then a trust with a long-term duration might be better. Why? Because it allows parents to pass on the vacation home to their children while still appointing an adult in charge as trustee. In addition, properly drafted with “spendthrift provisions,” such trusts can protect the family home from the potential divorces, lawsuits and bankruptcies of the heirs. For many, a family vacation cottage is a place of many happy memories shared over a long family history. As a result, it just has to stay in the family. Once you start down the path to make that happen, however, don’t wander too far without appropriate legal counsel. You will need experienced help to navigate the details, figure out what’s best for your unique situation, and eventually put ink to paper.

Reference: The Wall Street Journal Online (September 4, 2011) “Create A Plan To Pass On The Family Cottage”