Part of your family legacy takes place on the lake. Lake homes are significant investments. You have memories of family trips, of children, and maybe even grandchildren, growing up at the home. Preserving the lake home and keeping it within the family becomes all the more important for this reason. Passing on the home, and doing so in a manner that brings harmony rather than disagreement to the family should not be done casually or haphazardly. No one wants to leave the family worse off by the process.
- What do the parents want for the lake home?
- What do the children expect?
- Could the children amicably share the lake home?
- How well would the children resolve a disagreement?
- What would happen to the lake home if a child divorced?
- Will the parents’ estate be subject to death taxes?
In addressing these concerns, there are three main approaches for dealing with the lake home.
- Place the Lake Home in a Revocable Living Trust. Owners of a lake house will reap immediate benefits by placing the home in a trust. A revocable trust leaves the parents in control of the assets, and at death, allows for a quicker, cheaper, and significantly more private transfer of wealth. As an additional benefit, the lake house can remain in trust for the benefit of the children, providing rules for how the children use and share the home. Keeping the home in trust will also protect it from a child’s divorce.