Make an appointment today 405-814-6524 800-575-6838

How a vacation home fits into your estate plan

After years, maybe decades, of saving and planning, you were finally able to afford a vacation home. Now your children bring their children to spend summers with you on the lake or at the shore. It seems like a dream come true to have your family taking pleasure in this special place. You take pride in knowing you have created this getaway for them, and you want to make sure this treasured asset remains in the family after you are gone.

Leaving it in a will vs. passing it through a trust

The simplest way for you to pass along your vacation home may be to leave it to your children in your will. You can name one child or leave it equally to all your children. However, no matter how friendly the relationships are among your children, such a gift - with its responsibilities and benefits - may be the cause of disputes if the children or their spouses disagree about how best to manage the property.

Another alternative is to leave the property to a trust and make your children the beneficiaries of the trust. A designated trustee would handle the decisions about the care and management of the property, and the beneficiaries would enjoy the home according to your instructions.

Unless you specify otherwise in your trust, the children may decide to rent out the property to help with the cost of maintaining it. To avoid this, you may want to include operating costs in the trust. For example, you may calculate the cost of taxes, insurance, utilities and repairs for a certain number of years and pay that to the trust with instructions for the money's use.

Is it worth it?

Before going to the effort of setting up a trust or adding the property to your will, it is important to discuss with your children the possibility that they may not want to own the vacation home. Some concerns they could have about taking over may include:

  • Distance they may have to travel
  • Amount of money needed to maintain and repair the house
  • Unpredictability of property taxes
  • Desire for more liquid assets for their inheritance

If your children are already struggling to maintain their own homes, having your vacation home to care for may be a burden they are not eager to take on indefinitely, no matter how sentimental you feel about it. Having an honest conversation will help you determine the best course of action to take when you begin your estate planning.

Getting started on your plan

If your children seem interested in accepting the vacation home as part of their inheritance, you may want to arrange it so that they have the choice to sell their interest to their siblings or sell the property out right and split the proceeds if it becomes too much to manage.

Once you and your family have discussed the fate of the vacation home, you may feel it is time to meet with an estate planning attorney. Such an attorney will assess your circumstances and advise you on the best options for your particular needs. You will then have the peace of mind of knowing you have provided well for your future and the future of your loved ones.

No Comments

Leave a comment
Comment Information

Don't Wait Any Longer

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy