Berge & Berge, LLP Blog

Saturday, September 17, 2016

Vacation Home Memories May Be All the Kids Want

Q: Should I leave my vacation home to the children?

Estate planning is designed to plan for the distribution of your assets after you’ve passed away. Facing your own mortality can be unsettling for some, but the peace of mind you get after putting your affairs in order is priceless, particularly if your situation involves special needs, MediCal, or other specialized planning.

When you inventory your assets and think of whom you’d like to leave certain items to, nostalgia can take over. That’s especially the case when you own a vacation home.

You may fondly remember that summer a few decades ago when little Johnny learned to swim in the lake or when freckle-faced Amy finally graduated from the bunny slope. Wistfully, you think how wonderful it would be to leave them the lake house, family cabin, or ski condo that holds so many memories from their childhoods.

But think twice.

It’s entirely possible that not-so-little Johnny actually had nightmares about being thrown off the floating deck or that now-grown Amy resents never fully regaining feeling in that frostbitten toe. In short, they may not want it. So be sure to ask them first.

Even if they’d love nothing more than to continue those traditional vacations with their own children, it may not be financially or geographically feasible for them to do so. The costs of the vacation home’s real estate taxes, maintenance/repairs, utilities, homeowner’s association or common charges, and other related costs may be out of their budgets. Or they may have moved away—or plan to soon—so they really can’t make the trip any longer.

So it’s important to ask your children, grandchildren, (or whoever you’d like to leave the vacation home to) if they’re interested in it. Go over the anticipated costs associated with ownership and, if you’re able to do so, consider setting some funds aside in your estate plan to carry those costs for some time. Consider whether renting the home is a good option based on your particular circumstances. Maybe the children could make better use of the proceeds of that home’s sale instead, to possibly buy a needed home or car or help pay for a grandchild’s college tuition.

And if they do want it, there are ownership issues to consider. If you have multiple children taking equal ownership interests outright, there’s potential for disagreement among them on issues relating to the use, rental, upkeep, or sale of the home. A way to minimize that conflict may be by placing the vacation home in a trust wherein the trustee you designate would make the decisions regarding the property for the benefit of the children who are the beneficiaries of the trust.

The estate planning attorneys at the Law Offices of Berge & Berge can put your mind at ease.  We serve clients in San Jose and Santa Clara Counties.  Call us at (408) 985-9918 for a consultation today or contact us here.


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