Think about a vacation home trust


January 04, 2004

Some parents own vacation homes where they share good times and happy memories with children and grandchildren. Keeping a vacation home in the family after the first generation often requires careful thought and planning.

Family members have to get along. They have to cooperate in scheduling visits, collecting money to pay bills and making additions and upgrades to the property. Parents should consider whether keeping their vacation home in the family will encourage friendly relationships or cause dissension.

Parents can reduce potential for disagreements by setting up a trust to pay for property taxes, insurance and maintenance. The trust document may include procedures for allocating vacation time among family groups and for making management decisions relating to the property.

A vacation home trust also can specify what happens if siblings no longer want to use the property or can't meet their share of expenses.

A family vacation home can be a treasure or a source of conflict for the next generations. Parents should make the disposition of their vacation home an integral part of their estate planning.

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