For many families with vacation or hunting properties, keeping the property in the family once mom and dad are gone is a priority, and rightly so. The property you spent years exploring and building fond family memories on should be passed down for generations, not lost because a proper plan was not put in place prior to the owner's passing.
Shared family property, passed down to the next generation, can and does create some very real challenges in reaching family consensus. Beyond the emotional connections, these properties are often located in desirable areas where the property values have increased at a rate far beyond the family’s other assets and often represent a large percentage of the families’ holdings. This can pose unique estate tax and liquidity issues for senior generations and for some junior generations, the financial burden of keeping a cabin in the family may be more than they can handle.
Many Deeds or Wills stipulate the heirs own the property together through tenants in common or joint tenancy. These concurrent forms of ownership include two or more persons who possess the property simultaneously.
One of the tools recreational landowners can use to circumvent disagreements includes trusts. A Cabin Trust is a type of revocable trust which can be changed and dissolved up until the death of the maker. The trust agreement is administered by one or more trustees. The beneficiaries, rather than being tenants in common, all become recipients of the trust. This type of trust is a tool that can be used with any type of recreational land, lake-home or cabin you want to keep in the family.
With guidance from an attorney, a trust can also address how taxes, maintenance, and other financial considerations are managed.
Limited Liability Company
Another tool that can be used to transfer ownership to the next generation is forming a LLC or “limited liability company.” When there is unequal interest of the parties involved in the property, then using an LLC is the preferred method. It allows you the opportunity to address unequal issues through shares. Common wills and case law can help keep the property in the family, but a trust or LLC will ensure the family will get along in the future.
Deciding how to pass down the cabin to the next generation is a decision best placed in the hands of a reputed estate planning attorney. Real Estate Law at MG Law is a daily occurrence. The attorneys in our firm are NOT general practitioners, but professionals who pride themselves in being leaders in their areas of practice. In Andrew J. Monastra’s case, his practice area is real estate. His passion, since being admitted to the Bar in 1991, is providing experienced real estate advice and guidance to clients in Pennsylvania, in areas as close as Pottstown, Boyertown, Wayne and West Chester – or as far as Pittsburgh, Easton and Harrisburg. Andrew has been solving complex real estate issues all across Pennsylvania since 1991. Contact us
today and let's discuss keeping your hunting property in the family for years to come.