Many years of happy memories have been created at the family log cabin. Parents often want to keep tradition alive and pass the cabin down to their children. Sometimes parents discover that while their children may have expressed an interest in keeping the cabin in the family after their parents’ deaths, not all of the children have the same level of interest. The daughter may have fond recollections of baking with mom in the kitchen and fishing with dad at the nearby pond while the son only remembers mosquitoes and spotty Wi-Fi. Unless carefully planned, a gift that is intended to bring joy can cause tension and discord among family members.
To avoid potential strife, parents should have conversations with their heirs about expectations and interests. Since the parents won’t be around to referee disagreements, put a framework in place ahead of time. Some of the issues parents should address are:
- What if one child wants to sell and the other does not?
- Will each child get an equal share?
- Will ongoing expenses such as maintenance, insurance and taxes be divided equally or based on cabin usage?
- What happens if someone’s financial situation changes because of divorce or bankruptcy?
- What are the consequences if someone doesn’t pay their share?
- Are there cabin rules regarding guests, pets, smoking, etc.
- How will scheduling be managed?
- How should the children handle passing the cabin to the next generation. Co-ownership among cousins can be even more problematic than among siblings.
Investigate the financial and tax consequences as well. Is it best for parents to include the log cabin in their wills or create a trust? Another option is selling or gifting the cabin to the heirs while they are still living. Some states offer Transfer on Death deeds. Consult an attorney for informed estate planning.