Passing on the family cottageSubmitted by Agrawal Associates on June 5th, 2017
June 6, 2017
It’s the place where your son had his first kiss, where your daughter caught her first fish, and where you plan to spend your time painting landscapes after retirement. It’s the family cottage.
On a lake or in the mountains, there is a great deal of emotion wrapped up in your home-away-from-home. When it comes to your estate plan, future plans for your cottage can cause family stress.
Passing on your assets
How you choose to pass on your assets is a personal decision and can be done in a variety of ways. Take the time to discuss your intentions with your children and other loved ones so you can clearly convey your plans along with your philosophy about the legacy you’re leaving behind.
Discuss your concerns about inheritance and your goal to maintain family harmony. As an unbiased third party, your financial advisor can help facilitate these discussions, as well as offering practical, tangible advice to ensure your goals are protected.
If all of your children want to continue the traditions you started at the family cottage, a co-ownership agreement might be the perfect solution. The agreement can outline how the cottage will be used, who will pay for it, and who will be responsible for its upkeep.
The agreement should also address how one or more parties can buy out their siblings’ share in the case of disagreement, and what might happen with the property in case of the death of one of the siblings.
Be fair, not equal
Girish Agrawal, Principal of Agrawal Associates, recommends clients “be fair, not equal” when it comes to estate planning.
If one of your children wants to inherit the family cottage but another does not, your financial advisor can help here as well.
For example, if the cottage represents a large part of your estate, life insurance may help fill the gap. This will help address inheritance for the child who doesn’t want to take on the responsibility of maintaining the cottage or whose lifestyle doesn’t fit your slice of heaven. The life insurance policy could be paid by you, or by your children.
Manage your estate plan
Once you have an estate plan and will in place, review them regularly with your advisor to ensure that your current circumstances are reflected. Life events such as births, marriages, buying/selling property and other events should trigger a phone call to your advisor.
Managing your estate plan is one of Girish Agrawal’s prudent principles of estate planning. Learn more about what we offer clients for planning their estate.
- Agrawal Associates