If you plan on passing down your cottage, cabin or chalet to your children, make sure they actually want to own the property. Finding out where everyone stands will prevent family conflicts down the road and help you with tax and estate planning.
Gauge your children’s interest
When you ask your child or children about eventually taking over the property, you may not get an answer right away. Depending on their age and life situation, they may need months or even years to reach a decision. Make sure they’re considering the responsibilities of ownership and not only the enjoyment of roasting marshmallows over the campfire, lounging on the deck and boating on the lake. Are they prepared for the hours they’ll spend on maintenance and upkeep? Do they understand the financial commitment of property tax, utilities, insurance and repairs?
If you have two or more children, you’ll need a plan in case one child wants the property and another does not. Does one child prefer cash or other assets, if available? Will one child buy out the other’s interest?
Maintain open communication
Even if a child says they want the property, ask them to keep you informed if that wish changes. They may consider moving out of province. Their spouse may have other ideas for getaways and vacations. Or your child may no longer want the responsibilities of owning a vacation property.
It’s a good idea to keep us informed, too. Your children’s decisions can affect your estate plans, tax strategies and retirement planning.