OT: Vacation home succession question

[Roy_Faulker]

Question for you fortunate enough to have a vacation home. If you hope to keep it in the family how are you planning succession?

Want to keep ours in the family long term among my 3 kids and their kids etc. and am curious if others in similar position created LLC or a trust? Want to have flexibility to rent when not in use to offset expenses etc (if needed) but also want to ensure governance is streamlined so decisions don’t get bogged down etc.

I have attorney looking at LLC but interested in learning about other options and especially from those who have previously worked through this obstacle course.

 

[bethlehemfan]

I was thinking of setting up a trust with money for utilities and maintenance but may end up just leaving it to someone and let them decide. Speaking to an attorney soon and happy to share notes.

 

[RUinPinehurst]

Question for you fortunate enough to have a vacation home. If you hope to keep it in the family how are you planning succession?

Want to keep ours in the family long term among my 3 kids and their kids etc. and am curious if others in similar position created LLC or a trust? Want to have flexibility to rent when not in use to offset expenses etc (if needed) but also want to ensure governance is streamlined so decisions don’t get bogged down etc.

I have attorney looking at LLC but interested in learning about other options and especially from those who have previously worked through this obstacle course.

No firsthand personal experience but if the property will be rented, forming an LLC is a typical approach, paired with establishing a Qualified Personal Residence Trust, a form of an irrevocable trust. Also consider a life insurance policy that's payable to the trust, those $ of which would be tapped for the upkeep of the property as managed by heirs moving forward. But your estate attorney is your expert, to walk you thru the advantages/disadvantages.

 

[Knight Shift]

Question for you fortunate enough to have a vacation home. If you hope to keep it in the family how are you planning succession?

Want to keep ours in the family long term among my 3 kids and their kids etc. and am curious if others in similar position created LLC or a trust? Want to have flexibility to rent when not in use to offset expenses etc (if needed) but also want to ensure governance is streamlined so decisions don’t get bogged down etc.

I have attorney looking at LLC but interested in learning about other options and especially from those who have previously worked through this obstacle course.

No firsthand personal experience but if the property will be rented, forming an LLC is a typical approach, paired with establishing a Qualified Personal Residence Trust, a form of an irrevocable trust. Also consider a life insurance policy that's payable to the trust, those $ of which would be tapped for the upkeep of the property as managed by heirs moving forward. But your estate attorney is your expert, to walk you thru the advantages/disadvantages.

Nice catch.
We have a "vacation" home near the beach, but it is set up as a beach rental in the summer months, and a place where we let various friends/family crash as long as they cover cleaning costs and utilities. Our home is owned by an LLC.
We may need to consult with an attorney, but perhaps if the LLC is set up with the children, the LLC Operating Agreement could be set so that when both parents are deceased, the partnership is distributed to the children.

 

[Roy_Faulker]

Nice catch.
We have a "vacation" home near the beach, but it is set up as a beach rental in the summer months, and a place where we let various friends/family crash as long as they cover cleaning costs and utilities. Our home is owned by an LLC.
We may need to consult with an attorney, but perhaps if the LLC is set up with the children, the LLC Operating Agreement could be set so that when both parents are deceased, the partnership is distributed to the children.

The attorney we talked to said we can set it up so each child represents a branch on the tree with a single vote. So - no matter how many kids/grandkids/ great grandkids etc each branch needs to build consensus for their single vote…which to me is easier than exponentially increasing the number of votes with each generation.

 

[kupuna133]

No firsthand personal experience but if the property will be rented, forming an LLC is a typical approach, paired with establishing a Qualified Personal Residence Trust, a form of an irrevocable trust. Also consider a life insurance policy that's payable to the trust, those $ of which would be tapped for the upkeep of the property as managed by heirs moving forward. But your estate attorney is your expert, to walk you thru the advantages/disadvantages.

This is the way my in laws set their investment property and beach home up for their legacy. They did not want the “vacation home” to become a burden. So they have a life insurance trust to pay for the upkeep, insurance, taxes etc…. When they are no longer here.