Passing On a Vacation Home Poses Challenges
As summer comes to a close an important question for many with family summer homes is what happens when parents pass away. Often families struggle for to keep homes after parents pass away and money for upkeep is not the only or even the largest problem. Experts suggest a several methods that can help keep a family home in the family: using a limited liability company (LLC) allows the separation of ownership and management, discounts for tax purposes, and the limitation on liability in the event that a guest is injured; using a Qualified Personal Residence Trust (QPRT) may be a good fit for aging vacation home owners looking to reduce their estate but still interested in using the home for a few more years; exploring other trust frameworks like putting the house into a revocable trust, or setting aside money for the upkeep; once a plan is in place it is important to divide up the calendar in a clear way, making sure to compensate those families responsible for opening and closing the house and considering how to handle family that are unable to use the house; finally any plan will need some sort of exit option allowing those who want to get out to do so in a manner that does not force a sale of the house.
Kelly Greene, "Divvying Up the Summer House," Wall Street Journal (Sept 13, 2013).
Posted by Evin E Wick, Esq., Associate Editor, Wealth Strategies Journal.
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