(612) 206-3701 info@lucerelegal.com

Handing Down the Family Cabin Without Sparking a Feud

Lucere Legal helps families make a cabin estate plan for the next generation
Categories: Cabin Planning

Two-thirds of the summer have already blown past and still many Minnesotans who have a cabin have put off a vital conversation with their children. Whether you own a cozy cabin or a lakeside estate, your special place is full of great memories and home to years of family tradition. To keep the spirit of the place for generations to come, communication is key.

Forbes.com recently published an article with advice on ensuring the smooth transition of ownership of your property to the next generation:

Don’t work from assumptions.  Many parents hold a strong attachment to their cabin–the memories the place evokes are a wistful reminder of watching their children grow up. Though it may forever hold a special place in your heart, it’s not entirely certain that your sentiment will be as strong among your children. Don’t assume; ask your children what future they see in the place. Many children will wish to carry on the traditions and joy of the place, but you may find they would prefer to sell it. Working out the facts will help you make a plan that’s agreeable to both you and them.

Do weigh the options.  Plan ahead. A trouble-free transition for your cabin is dependent on everyone involved knowing what to expect. Unwanted gift or estate taxes may be incurred if you leave the property outright, and unwanted drama may be sparked should you leave it to your children as “tenants in common”–each owner has the right to sell, transfer, or mortgage the property, regardless of the others’ wishes.

Fortunately, there are other options. Ownership may be transferred via a trust or a limited liability company (LLC), either of which provides a number of benefits for the inheritors: protection of each child’s ownership interest in the property in the event of death or divorce, prevention of a forced sale, the establishment of rules in advance for the property’s use, and the provision of funds for maintenance.

Do set expectations.  Discuss the matter early with the next generation of owners. Engaging them in the process will give legitimacy to whatever decisions are reached, and you may well find your children cover topics that you may have overlooked! Have a list of topics to be discussed going into it. How will the vacation home be used and operated? What rules must each owner abide by? Setting out a clear plan now will lessen the risk of conflict in the future and provide your children a way to diffuse negative feelings.

To learn more about this, go to our cabin planning website, and take the time to work through The Minnesota Cabin Planning Guide and Workbook.

Now is the perfect time to discuss your future plans for your cabin with your family and your cabin planning attorney, who can assist you with planning a smooth ownership transition.  Call our office today at (612) 206-3701 or fill out our contact form to schedule a time for us to sit down and talk about this in a cabin planning consultation, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.

Image courtesy of www.skaneatelessuites.com/CC BY-SA

Contact us to see how we can help you with Cabin Planning

You may also like . . .

The plain-English guide for Minnesota small business owners

When it comes to business, ignorance isn't bliss; ignorance is risk.

There's a handful of legal topics that business owners should be familiar with, at least on a rudimentary level, to reduce the risk of having something horrible come out of left field.

This book is a legal guide to help you put the most common business legal issues on your radar, with enough information for you to be on the alert for when you may need to get some professional advice.

The intention in arming you with this information is so that you can proceed in business confidently and with fewer legal quagmires.

Do you have a cabin?

The first generation that buys a cabin enjoys it to the fullest and it’s a magical place where happy memories are made and families go for some much needed respite. Unfortunately, without thoughtful planning, the chances of the cabin staying a place of happiness and tranquility into successive generations is very, very slim.

If you haven’t done the planning in advance and made it legally binding, the family members (and their ex-spouses and new spouses) will have to work every detail out for themselves. If they can’t, what is likely to happen is a lawsuit called an action for partition that forces everyone to sell their interest. This lawsuit is expensive, and the costs of litigation will come out of the proceeds of the sale of the cabin, so to add insult to injury to those who wanted to keep the cabin but couldn’t afford to buy the others out, they are footing part of the legal bills in the lawsuit against them. Ouch!

It’s no wonder that family members stop speaking for years after the cabin conflict is “resolved.” You can’t make family relationships perfect, but you can take away much of the fuel for the family conflict fire. That’s what cabin planning does, and it has the nice side effect of giving you peace of mind now.

That’s why Kimberly wrote The Minnesota Cabin Planning Guide and Workbook, and you can get a free electronic copy of her book on our cabin planning website, or you can find it in many county libraries in Minnesota, or you can get it on amazon.com.

Make An Appointment>

Join Our Mailing List

Subscribe to our newsletter list to get information and resources helpful to running your business and planning and managing your personal financial affairs delivered right to your inbox.

We don’t spam and won’t share your information with anyone, at anytime, ever.

Check out our podcast

The Small Business Buzz Podcast