Betting the farm, or cottage, or chalet….

I see many clients who have recreational properties that they want to leave to their children through their wills. Dealing with this type of property can be very complicated, because there is often a great deal emotionally tied up in a family vacation property well beyond the financial value that it holds. There are also higher financial costs to passing down a family recreational property because of capital gains taxes on a second home. Many people want to leave the property jointly to their children, assuming that they will all want to use it and hold on to it, which is not always the case. One child may not be able to afford the property; one may not live close enough to it to be able to see a benefit from holding it; one may not use the property at all and would prefer cash to a stake in a vacation property. If you have a cottage or other vacation property, you should speak with a lawyer about setting up an estate plan that will address your desire to keep the property in the family as well as your family’s interest in retaining the property beyond your death, and will take into consideration the financial implications of passing down a vacation property.