You spent summers there, squishing sand between your toes while ocean breezes ruffled your hair. Your own children played under the lofty pines in the front yard while discovering the house’s secrets and building lifelong bonds. Now, your grandchildren eagerly await their time on the front porch swing with you. Preserving memories is important. Keeping your vacation home in the family starts with including it in your estate plan.
Ownership of the home matters. Some vacation homes are co-owned. For this article, though, we’ll assume you own the home outright.
Take some time to discuss the family’s vacation home with the family. You may find that younger members of the family enjoy the memories they’ve made but don’t want the financial responsibility of taxes, insurance, and maintenance. Other family members may live too far away or have no interest in the property.
However, if keeping the vacation home is your choice, it’s time to start planning.
You may want to consider the following ways to handle transferring your family’s vacation home:
Your Last Will and Testament is one option. However, it may not be the best one. Among other things, property passed on through your Will goes through probate. So, your heirs will not have immediate use of the property.
Trusts are often used to pass property to beneficiaries. A revocable living trust, for example, gives the property owner the opportunity to change their minds at some point. A Qualified Personal Resident Trust (QPRT) is irrevocable but may allow the settlors to live at the property for a time. Trusts may also offer beneficiaries some tax breaks.
The property may be sold or gifted to the owners’ children. This method can be problematic if not all the children want to participate.
Another option is to transfer the property to a limited liability company. Organizational documents could contain language about maintaining the property or buy outs. Shares in the company can be gifted to the children, reducing the size of the owners’ taxable estate.
Deciding which method best suits your needs and the needs of your loved ones can be difficult.
At Law Offices of John Mangan, P.A., we’ve helped many clients develop comprehensive estate plans that meet their goals and needs. We can set up an appointment for you if you just call 772-324-9050 or use our convenient Contact Form.
Located in Palm City, the Law Offices of John Mangan, P.A. also serves clients in Stuart, Hobe Sound, Jupiter, and Port St. Lucie.