Cottage Succession Planning
Succession Planning for Cottage Properties
When preparing your estate plan, it is essential to carefully plan for the transfer of your cottage or vacation home. Without an estate plan in place, your cottage could place a significant financial and emotional burden on your loved ones, and at the extreme could become a source for family dissension and disputes.
At the Toronto, Ontario law firm of O’Sullivan Estate Lawyers LLP, we assist clients to ensure a smooth succession of their cottage or vacation home through tailored estate planning.
Strategic Techniques for Passing On Vacation Property
We work with you to help you understand appropriate options for cottage succession planning, such as transferring your cottage or vacation home to your beneficiaries, during your lifetime and on death, including:
- Joint ownership: This can allow you to minimize probate taxes by directly passing the property to the joint owner at the time of your death; however, many considerations must be reviewed, including the tax implications of such a transfer.
- Selling the property to members of the next generation can allow you to pass ownership down, and various options for financing such a transfer can be used, including taking back a mortgage to minimize immediate cash obstacles for your beneficiary.
- Passing the property under your will, and available options, including processes to determine who will be an owner, how the property will be valued, terms for transfer, and procedures to avoid disputes as well as using a trust to hold a cottage for a desired time period.
Navigating Tax Implications for Cottage Properties
Tax on death and probate fees on a cottage or vacation home can be considerable, particularly if your property has increased in value since it was purchased, and can place a burden on your beneficiaries. Additionally, if your vacation home is in the U.S., it may be subject to U.S. estate tax. Our lawyers can help you understand the tax considerations of planning succession to your property to minimize the impact of taxes on your beneficiaries through appropriate estate planning solutions.
Consult With Our Lawyers
If you have a multigenerational vacation home or cottage and wish to continue your family tradition, our lawyers can work with you to develop co-ownership agreements, cottage and vacation home trusts and property and maintenance funds, complex wills and other estate planning tools to ensure a successful succession of your property. For more information about our estate planning services, contact our lawyers.