The source of generations of happy memories, the future of the cottage in the lives of an expanding Family can also be the source of worry and angst.
Honest Family discussions about the future of the cottage are a sensible starting point. Who is likely to be in? Who is likely rather to be out?
What about equality of inheritance if one or more children would like the cottage and one or more would not?
As likely a second recreational property and not a principal residence, where does the capital come from to pay the capital gains tax upon the second death of the parents?
Is there a maintenance fund for property taxes, inevitable servicing and repair costs?
Should a trust ownership be considered to ease future succession?
Should life insurance on the lives of the parents be considered to fund both the capital gains taxes and the creation of a maintenance fund?
Please see the below links to 5 excellent articles dealing with this sensitive yet beloved question.
- Cestnick, T. (2014, June 4). Should you transfer the cottage to your kids during your lifetime?. The Globe & Mail. Retrieved from theglobeandmail.com
- Cestnick, T. (2017, June1). A cottage agreement can save the family headaches. The Globe & Mail. Retrieved from theglobeandmail.com
- Bouw, B. (2017, April 11). How to keep the cottage in the family. The Globe & Mail. Retrieved from theglobeandmail.com
- Cestnick, T. (2014, June 4). How to transfer cottage ownership – and reduce the tax bite. The Globe & Mail. Retrieved from theglobeandmail.com
- Martin, S. (2017, May 24). What happens when the kids don’t want the family cottage?. The Globe & Mail. Retrieved from theglobeandmail.com