Logo
October 2012, Volume 1, Issue 8
KEEPING A VACATION HOME IN THE FAMILY/
WHEN DOES YOUR ESTATE PLAN NEED A TUNE-UP?

VacationKEEPING IT IN THE FAMILY: How to plan for vacation home succession

  

As the holidays approach and travel plans take shape, you may be fortunate enough to be looking forward to a journey to a vacation home.  Whether at a ski resort, a tropical beach, or a wooded lakeside cabin, many families gather at their vacation homes collectively, with multiple generations sharing the space at once, or take turns using it with their smaller nuclear families or groups of friends. If you own a vacation home, you should consider whether and how you want to keep it in the family.  Your estate plan should consider gift and estate tax issues, how to fund carrying costs, and family issues with regards to how to equitably share access to the home.

  

Following are some ways to structure gifts or bequests of vacation homes to keep them in the family and minimize the tax impact.

  

Simple gifts

If your vacation home has a relatively small property value, or if your family is large, you may want to gift shares of the property to heirs.  Read more>>

  

Revocable Trust

Also called "living trusts", a revocable trust is a trust you can change, modify, or revoke at any time. Read more>>

  

Qualified Personal Residence Trust (QPRT)

A QPRT enables you to pass on your home or your vacation home to your children while retaining the right to live in it for a specified period of time. Read more>>

  

Dynasty Trust

If it is important to you to hold onto a family home for future generations, beyond just your children, a dynasty trust may be the best vehicle for you to use to pass it on. Read more>>

  

General Partnership (GP) or Limited Liability Company (LLC)

By employing a GP or an LLC to own the property, you can avoid challenges of local transfer taxes or ownership by minor children. Read more>>

  

Agreements

In addition to structuring the gift, you may want to create a written agreement for your heirs to minimize the likelihood of disagreements.  Read more>>

  

Conservation Easements 

One other issue to consider is the use of conservation easements, particularly if there is a significant amount of land involved.  Read more>>

 

Call or email our office. We are here to answer your questions.

TuneupESTATE PLAN TUNE-UP TIME: When to review and revise

Many of our newsletter topics are geared towards first-time estate planners.  However, even if you have an estate plan in place, you should review it every few years with an attorney to make sure it is up-to-date.  In addition to these periodic "tune-ups", there are certain situations that arise that require updates to your estate plan.  Among the more common developments affecting an estate plan are:

 

(1) Whether your personal situation, or the personal situation of any of the individuals you have identified to play a role in your estate plan - such as executor, trustee or guardian - has changed in the time since your estate plan was created;

 

(2) Whether your financial picture has changed in the time since your estate plan was created (such as the purchase of additional substantial life insurance, the purchase of a new home or additional real estate, the launch or unwinding of your business); and

 

(3) Whether the law has changed in ways that impact the assumptions that were made when you first created your estate plan.  The scheduled change to the $5 million estate tax exemption at the end of 2012 is an example of this type of change.

 

Whether or not we created your original estate plan, we will be happy to review it for you to make sure it is in sync with your goals, your situation, and current laws.  

 

PasswordsPLANNING FOR YOUR DIGITAL LIFE: Download our printable password record

Managing your digital assets is becoming increasingly important in careful estate planning.  Here you can download a printable record of usernames, passwords, and other information about your online accounts. 

 
AboutAbout Pierson & Strachan

Pierson & Strachan P.C. is a law firm serving clients throughout Lake and Cook Counties specializing in estate planning and probate, real estate and land use, business law, and other contract matters. From issues that affect your family to those that impact your business, our attorneys combine cutting-edge technology with personal service to vigorously represent your interests and get you the results you need. Read more>>

 

Our Approach to Billing 

At Pierson & Strachan, we believe that open communication with our clients is imperative to establishing trust and working together effectively.  We know that engaging an attorney is a leap of faith. This is particularly true when it comes to billing and costs.  Our approach to billing eliminates the potential for "sticker shock" that erodes trust.  Read more>>
Quick Links
Pierson & Strachan, P.C.
Craig Pierson
Attorney at Law
847-234-0099  
LinkedIn Craig Pierson

Like us on FacebookFollow us on TwitterView our profile on LinkedIn
I will periodically send newsletters pertaining to topics I believe may be of interest to clients and friends.  Thank you for reading, and please forward to anyone else who you think might be interested.  
I appreciate your referrals!
 
Join Our Mailing List
This information may address some questions, but is not intended to be a comprehensive analysis of the topic or legal advice.  Independent tax and legal advice is recommended.