Family vacations are a lot of fun, and many of us have fond memories of time spent with our family in places that are special to us. Sometimes, families purchase real estate either individually or as a group to enjoy vacations together. If your family owns a beach house, a timeshare, a hunting camp, a ski cabin, or some other type of vacation property, you will want to include plans for its ownership, use, and maintenance in your estate plan.
Vacation properties can provide years of enjoyment for generations of family members. However, for that to happen, each generation of owners of a vacation property must make plans for how the property will be owned and maintained after they pass away. If clear plans are not in place, the family vacation home could become a source of family feuding and economic stress.
The first step in planning for the transfer of your vacation property is gathering information about your family’s interests in the property. Talk with family members about the property and what they would like to see in the future regarding its ownership, care, and use. As difficult as it might be to discuss finances with family members, ask those whom you are planning to transfer ownership to about their ability to bear the financial costs associated with the property. You might be surprised at the information you learn through those conversations, but all of that information will help you create a workable plan for your property when you consider it in combination with the plans you were hoping to make for your vacation home. Also, having those conversations can help interested family members begin saving money now so that they’ll be able to help keep the vacation home for their use and enjoyment.
As you work with your estate planning attorney to make provisions in your estate plan for your family’s vacation property, you may have more options available to you than you realize. Trusts and business entities, either together or separately, are examples of ways vacation property owners can plan for the future enjoyment of their properties by their families.
For example, you may be able to create a limited liability corporation or a partnership and transfer ownership of the property to that entity when you pass away. If you decide to go that route, make sure that the documents that you create to establish the business entity set out clear rules for who is responsible for managing the property as well as a budget for the property’s expenses and any rules that pertain to the use of the property. The documents should also include buyout and transfer provisions so that future owners can pass along their ownership interests to their own families or buy out the shares of family members who are no longer interested in owning their share.
Vacation homes are assets that require careful consideration in an estate plan. To learn more about how a Kansas estate planning attorney can help you plan for the future of your family’s vacation home, call Wichita attorney J. Joseph Weber at 316-265-7802, or contact us on the internet to schedule a consultation.