Distributing a family vacation home can exacerbate existing disputes or create new conflicts among a family if proper planning has not taken place. Multiple options are available to assist with the orderly use and management of the property during life, and can also facilitate the transfer of ownership to future generations. Holding the property in trust is one such option.
A trust holding a family vacation home typically includes specific instructions regarding how the vacation home will be passed down, managed and maintained. The Trustee is often given sufficient flexibility and discretion to manage the property, although the grantors have the ability to specify how the property is to be handled.
Since vacation homes come with expenses, consideration should be given to the payment of the mortgage, taxes, maintenance and other general expenses, and the trust should have sufficient liquid assets to pay the expenses. The grantors also have the ability to address scheduling, whether or not the property will be rented, compensation for maintenance performed by family members, and related issues.
Although a great option, there are some limitations regarding the amount of time property can remain in trust, which is one consideration that will need to be addressed before transferring the property into a trust.
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