Whether you have a cabin on the lake or a sprawling countryside retreat, your family vacation home is a unique asset. In addition to providing cherished memories to loved ones, your property may provide valuable rental income.
As you plan for the future, you want to make sure that your “home away from home” continues to provide joy to your family while maintaining its investment value.
1. Leave property to heirs outright
A transfer-on-death deed allows you to leave the property to heirs directly, bypassing the need for a potentially lengthy probate process.
If you want to leave ownership to multiple parties, you can also grant equal ownership with a TOD deed. Creating a Use and Maintenance Agreement may help avoid potential conflicts about sharing both the future use and care of the home.
2. Create a revocable trust
A revocable trust may also be a good option. As with a TOD deed, placing your vacation home in a revocable trust ensures that the property can transfer directly to heirs without going through probate. With a revocable trust, you can maintain full control of the property during your lifetime while leaving specific instructions about how the home will transfer after your death.
3. Form a limited liability company
Creating a limited liability company to manage your vacation property may be an especially good idea if the home generates regular revenue. With an LLC, you can set up rules for both personal use among family who are part of the company as well as terms for distributing any interest from rental earnings.
Your vacation home is more than just a financial asset; it represents memories waiting to happen. Preparing the right estate plan for your family’s needs can help you rest assured that those memories will continue well into the future.