How To Keep Your Vacation Property In The Family

If you are like many people in Michigan, you have real estate “up north” where you spend holidays and weekends. With special planning you can ensure that your children and grandchildren will be able to continue to use this real estate after you and your spouse are gone. However, this kind of control requires planning ahead of time with the use of a living trust, containing special provisions. The trust can be drafted with either specific instructions to your children, or so that your children are given flexibility regarding certain decisions after your death.

The trust should provide: 1) whether your children will pay the property expenses or whether money will be put in trust set to pay the annual expenses, 2) whether your children can opt out of taking the property, 3) who will manage the property, 4) when each child can use the property each year, 5) who the property will go to after your children have died, and 6) whether your grandchildren can also use the property. Usually , if any of your children opt out of taking the property, the trust provides that they will receive an equal amount of other assets as their share of your estate.

Regarding the use of the property, you can have the Trustee set a schedule each year, or rotate the selection power to a different child each year. The Trustee can be a person you choose or can be selected by some other method. You should also include provisions allowing the children to terminate the trust if they wish to do so. Done correctly, including provisions in your living trust regarding a vacation property will allow you to leave a wonderful legacy for your children.

Categories: Estate Planning
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