PRESERVING A FLORIDA VACATION HOME THROUGH A FAMILY TRUST
Many Florida residents who want to set up an estate plan are concerned about how to preserve a beloved vacation home. They have enjoyed this beach house or cabin as a great way for the family to spend time together, and they hope to preserve the property so that their loved ones can continue to have that experience for many years to come.
Unfortunately, vacation homes are often a source of conflict. After the original owners are gone, siblings and their spouses and children all want their time in the property. They may fight over who gets it and when and especially over who pays for upkeep. There's also the common problem of one of these members of the next generation running into financial difficulty and needing the others to buy out their share. A will can pass on the property, but often it doesn't do anything to settle these questions.
One way to avoid some of these problems is by placing the vacation home in a trust. A trust divides ownership in a property between a trustee and beneficiaries, with the trustee preserving the property for the benefit of the beneficiaries. The person setting up the trust can spell out how the beneficiaries are meant to share the property and can make some provisions about how they are to pay for insurance, taxes, maintenance and other costs. The person in charge of trust administration then takes care of day-to-day financial concerns of the property in an effort to keep it solvent.
Trusts can be set up as revocable or irrevocable, as a living will or effective upon death. Each type has its advantages and disadvantages. Setting up a trust requires a good deal of planning and should not be taken lightly. However, when executed well, trusts can be very useful tools for preserving assets for a long time. They can be especially useful for preserving a piece of real estate, and they can be a very effective way for Florida families to preserve a family vacation home many years into the future.
Rignanese & Associates is available to work with clients on their legal needs. Please reach out to us at 863.294.1114.
On behalf of Kelly Kennedy of J. Kelly Kennedy, Attorney/CPA, PLLC which has been acquired by Rignanese & Associates, PLLC.
Source: MarketWatch, "How to hand down family vacation homes," Amy Hoak, Sept. 11, 2013