Cottage Law & Vacation Home Planning
The word “cottage” conjures up nostalgic visions of a small rustic home on a body of water where family and friends have spent fun-filled days creating memories over many years. It could actually be any home or property that a person wants to keep in the family after they are gone. The goal of vacation home succession planning is to establish a legal entity that keeps the vacation home in the family over multiple generations without causing family discord.
Why do vacation home planning?
Leaving the vacation home to all members of the next generation “in equal shares,” means everybody has to agree on everything. Virtually every family will have members of the next generation with different emotional ties, different economic resources, different views of how much they can afford to spend on vacation property, and different opinions on how to make decisions affecting the property moving forward. Parents need to consider all these issues. Failing to plan simply means the next generation will be left to “duke it out.” The long term consequences of this can be disastrous to family relationships.
Vacation home planning falls under the legal practice area known as “Cottage Law” and is a fairly new practice area. It gained momentum in the early 1990s when states created public acts which provide a legal framework for changing the ownership relationship of cottage property owners. Michigan lawmakers created the “Michigan Limited Liability Company Act” (LLC) in 1993, and most states have since adopted similar limited liability company statutes.
We will work with you to develop short and long term strategies for your vacation home as part of your overall estate plan. Having a succession plan in place for your vacation home will avoid real estate surprises for your heirs and preserve family harmony.
Call 574.232.3538 for an appointment to discuss your options for keeping your vacation home or cottage in your family for future generations.