Alert
Close

Help Decide the Future of Aging. Join the White House’s Live Stream From Cleveland Monday. Learn more

Highlights

Open
Renew for 3 and attend Life at 50+ for free

Contests and
Sweeps

You Could Choose Your Dream Vacation!

Hawaii, the Grand Canyon or an Alaskan Cruise! No purchase necessary. Ends May 31. See official rules.


Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

You Could Choose Your Dream Vacation
Happy African American couple

AARP Books

Visit the Money Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

Jobs You Might Like

most popular
articles

Viewed

Succession Planning

Who Inherits the Cottage by the Lake?

To stop siblings from squabbling, put a plan in writing

Family going on vacation

— Bill Owens/Gallery Stock

A buyout plan

If your heirs don’t agree about keeping the property, Fry strongly advises creating a buyout plan. This would include a provision to minimize the financial burden for family members who buy out a sibling.

The buyout price is typically set at substantially less—perhaps 30 percent lower—than if the cottage were sold to a third party, he says. Payment terms can extend over many years.

A decision then needs to be made about whether or not the bought-out sibling has a right to occupy, or even visit, the property. “It’s not unheard of for some people to sell their interest and feel they [still] have a right to enjoy the place,” says Fry.

Greed for quick money may play a role for some sellers, says Fry, but often adult children simply can’t afford the maintenance costs of the property or the property taxes—especially in tough economic times.

One way to mitigate such pressure, Fry says, is to set up an endowment from other assets that will generate income to pay expenses. This reduces what children have to contribute annually.

Fry says there are typically several other issues that should be included in a cottage succession plan:

  •  Decision making about common homeowner issues such as repairs and maintenance.
  •  Division of maintenance costs, property taxes and other expenses.
  •  Scheduling of usage of the cottage.
  •  Ownership rights if one of the co-owner siblings dies. Does a surviving spouse inherit the share?


A succession plan is basically a “once-in-a-lifetime opportunity to minimize the amount of conflict with your children,” says Fry. “You should get a plan in place—and understand that not all of your children are going to agree with all of it.”

Darci Smith is a freelance writer who lives in Chicago.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Advertisement

The Cheap Life

Jeff Yeager Cheap Life Ultimate Cheapskate AARP YouTube web series save money

Catch the latest episode of The Cheap Life starring Jeff Yeager, AARP's Ultimate Cheapskate. Watch

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Credit safeguards with AARP® Identity Theft Protection from TrustedID®.

AARP Credit card from Chase

Members can get cash back rewards on purchases with the AARP® Credit Card from Chase.

Man using cell phone outdoors

Members save on monthly service & usage fees and get free activation with Consumer Cellular.

Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.

Advertisement

Advance your skills. Transform your career.

Explore your learning possibilities.