Creating a Succession Plan for the Vacation Home

If you own a vacation property you hope to one day transfer to family, it is important to create a detailed succession plan for the property’s eventual transfer. The plan will establish rules regarding who may use the property and will help make the transfer of ownership an easier process. Some considerations you should make when creating your own succession plan are below:

• Determine which family members are interested in inheriting the vacation home, as some family members may not be interested at all.
• Figure out how you want the property to pass to the next owner or owners. (If the house is going to one person, you can transfer the property as a gift during life or as a bequest in a will. For property going to multiple individuals, forming an LLC or creating a trust may be a better option.)
• Create rules for the use of the property, including a schedule of use times for the owners and their children.
• You should also consider taxes when creating your plan and determine how gift and estate taxes may factor in.

See Rachel Louise Ensign, Create a Plan to Pass On the Family Cottage, The Wall Street Journal, Sep. 4, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) and Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.