With warm weather approaching, many property owners are reminded of the value of their recreational properties, further forcing them to think about whether to pass it down to their children and when. Transferring a recreational property to the rising generation requires appropriate tax and estate planning. Keeping the asset in the family can cause a family to recognize capital gains taxes, which may force the family to sell the property if the children cannot cover the high tax bill. One way to solve this problem is to create a trust for the property and protect the asset. Creating a trust will defer capital gains taxes for the beneficiaries until it is passed on in their estate.
See Brenda Bouw, How to Keep the Cottage in the Family, Globe and Mail, April 11, 2017.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
