You finally bought that vacation home you’ve always wanted. How can you add it to your estate plan? When it comes to planning your estate, a vacation home is very different from your primary home. Here are some things you should consider.
Who Is on the Title?
When you purchase the property, you should consider thoughtfully whose name will be on the title. Should the property be titled in just your name, your and your spouse’s names, or your and your child’s names? If the title is held jointly between you and another family member, you will need to decide if the co-owner will automatically inherit your rights to the property after your passing (called “right of survivorship”) or if you will designate an inheritor of your share of the property (called “tenants in common”). Another option is for a trust or limited liability company to hold the title.
Each family is different, and similarly, certain titling decisions will work for some but not for others. An experienced estate planning lawyer can help advise you about the best solution for your situation.
Where Is it Located?
If your vacation home is in a different state from where you reside, you may want to consider owning the property through a trust or limited liability company or co-owning the property with another family member, such as your spouse. This will prevent your heirs from having to go through a second or ancillary probate process for the vacation property.
Probate is the legal process of administering a decedent’s estate. Probate rules differ by state, so if you own real property in multiple states, your family may find themselves dealing with multiple probates. This places an unnecessary burden on them because they’ll have to spend additional time and money to resolve the probate estate in another venue.
There are multiple strategies for avoiding ancillary probate, which an estate planning attorney can help you evaluate.
Do Any Descendants Want It?
As you consider co-ownership and other estate planning arrangements for your vacation property, you should have an honest conversation with your heirs about their interest in the property. You may cherish the home, but your children could feel differently.
Furthermore, your children could disagree about how to use, manage, and maintain the home. If you leave the property to your children jointly, they will need to make unanimous decisions. Leaving it to them altogether could be setting them up for potential familial strife. The last thing you want is to give your children an asset that will tear them apart. Talk to them about how they feel about the place, and work with them to create a co-ownership agreement for the property that they can all agree upon.
What Are the Upkeep Costs?
You should also consider how your beneficiaries will manage the upkeep costs of your vacation property, especially if it is large and valuable. If these costs are substantial, you could provide for these fees through proper estate planning. An attorney can help you with these arrangements.
Ask an Estate Planning Lawyer About your Vacation Home
There are many options for adding your vacation home to your estate plan. An estate planning lawyer can help you consider the options and determine the most appropriate estate plan for your family. If we can help you get started, please schedule a consultation at our law firm. Simply call (718) 875-2191 and mention this blog post or schedule online here.