All in the family: Transferring your vacation home

by Adler Pollock & Sheehan P.C.
Contact

Adler Pollock & Sheehan P.C.

Vacation homes are typically treasured by families and often pass down from generation to generation. But there may be more to transferring the family lake cottage or beach house than first meets the eye. If you plunge ahead without careful planning, it could disrupt harmony and lead to a “family feud.” In some cases, relationships may be severed forever.

Potential sources of conflict

Why would transferring a vacation home lead to conflict? The possible reasons are numerous and sundry and, of course, depend on whom you choose to name as your successors. For starters, the home may elicit strong emotions, with precious memories for different family members. Due to this connection, someone who’s excluded from ownership may harbor resentment. Or, if the ownership is divided equally — say, one-third to each of three siblings — one party might feel they have a greater right to the property than the others.

In addition, adult children are often married with children of their own, which can complicate matters, especially if any of the siblings and the respective spouses don’t get along. Existing sibling rivalries or other long-standing tensions may come into play.

Once ownership of the home is legally transferred to one or more of your kids, it can be subject to the claims of creditors. Or, if a married adult child gets divorced, his or her spouse might attempt to claim a portion of the home’s ownership.

The costs of operating a vacation home can’t be ignored, either. Not even counting property taxes and mortgage interest (when applicable), some family members may be stretched thin by outlays for repairs, maintenance and insurance. If siblings have disparate incomes, arguments about money can boil over.

Finally, assuming you divide ownership equally among your adult children, your decision may not be embraced by everyone concerned. While some may want to keep the home, and preserve the traditions associated with it, others might want to sell it and use the proceeds for other purposes. Thus, the family is divided.  

Communication is critical

Much of this potential discord can be avoided by talking things out before taking action. For example, you may learn that one child has no desire to continue using the home while another intends to keep it for him- or herself and his or her kids as long as possible.

Consider seeking a practical solution that benefits everyone without causing financial hardships. Get your family together face-to-face to hash out all the issues. Depending on the circumstances, spouses may — or may not — be invited. As a result of these talks, you might arrange a division of expenses or ownership that differs from the usual equal allocation.

In addition, you might want to discuss the possibility of renting the home to tenants, at least part of the time. This can be a lucrative source of income for your children while providing certain tax benefits. However, some family members may feel strongly about maintaining the home for personal use.

Other issues at stake

Before transferring ownership of your vacation home, consider all of the legal and tax ramifications. Although the most common method is to leave a home to children as tenants in common, this may not be the best approach if it causes discord. In that case, you may use a trust instead, thereby maximizing the available tax benefits under the prevailing laws. Contact your estate planning advisor for help addressing your vacation home in your estate plan.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Adler Pollock & Sheehan P.C. | Attorney Advertising

Written by:

Adler Pollock & Sheehan P.C.
Contact
more
less

Adler Pollock & Sheehan P.C. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.