Whether a ski chalet in the mountains or a cabin on the water, a vacation home offers busy families a welcomed respite. A chance to get away from the hustle and bustle of everyday life and tune back into nature while reconnecting with family, friends and loved ones.
It is important to take the time to ensure these treasured properties pass according to our wishes. Three options that can help us achieve our goals when it comes to passing along a vacation home include:
#1: Lifetime gifting.
The first choice is to gift the property during our lifetime. This can provide the benefit of watching our loved ones enjoy the property and making sure the ownership transfers according to our wishes.
#2: Use a trust.
A trust is a legal tool that can serve any number of goals, including ownership of property. The homeowner can create a trust with the goal that the trust will own and manage the property so that loved ones can benefit without the hassle that comes with ownership.
#3: Consider an LLC.
A limited liability company (LLC) is a business structure that can provide asset protection and is particularly beneficial for properties that also earn a rental income.
These options can all help ease the transfer of a vacation home but are only the beginning of the conversation. It is important to have additional discussions, like potential tax obligations and what happens to the property beyond the initial generation of beneficiaries, with an estate planning professional to help better ensure you choose the option that is best for your family.