It’s summertime and if you’re fortunate enough to own a vacation home, you’re likely there, adding more memories of pontoon boat rides, fish fries and Fourth of July celebrations.
But if you see those traditions continuing long after you’re gone, you’d better find out whether your children have the same plan—and then put it in writing. If you don’t, trouble ahead could spell the end of your family legacy.
“For many families, the family cottage is one of the most valuable assets that mom and dad own,” says David Fry, coauthor of Saving the Family Cottage and a senior partner at Rockford, Mich.-based law firm Blakeslee, Fry and Scales, which specializes in cottage succession law and planning.
According to the 2000 Census, there are more than 3.5 million vacation homes in the country, many of them handed down from parents to children. The issue, Fry explains, is that some siblings see a cottage as part of the family heritage and want to hang on to it at any reasonable cost, while others view it as an economic asset to quickly turn into cash.
Without a cottage succession plan in place, ownership goes to all children equally—and the result is almost always conflict.
Worst-case scenario: One sibling would rather have cash over a share in the cottage and the other siblings are unable to produce the buyout lump sum without selling it.
“I have clients where siblings aren’t even speaking to each other anymore,” he adds. “In many cases, I’m hired as much as a family counselor and mediator because the lines of communication have become so fractured that it’s impossible to do anything.”