Leaving your house to a beneficiary is a very common scenario. However, the question arises about vacation properties: Are there any special considerations for vacation homes that differ from your primary residence? The following will examine what you need to know about leaving your vacation home to a beneficiary.
What Should You Keep in Mind When Planning for the Succession of Your Vacation Home?
Much like other areas of estate planning, having a plan for the succession of your vacation properties is essential. By not having a plan at all, your property may very well end up with someone you don’t intend to pass it on to.
Beyond that, there are several factors that you will want to consider in regard to your vacation home. Some of these critical factors include:
- Who you want to have the vacation property (or multiple properties)
- Who will reside in the vacation home, for how long and for what specific days
- Who will be responsible for upkeep of the property
- Who will be responsible for paying taxes on the property
What Are Some Options You Have for Passing on Your Vacation Home?
By properly planning for the succession of your vacation home, you can ensure that the property is passed on to whom you would like to have it. In terms of options you have, the following are some ways to pass on your vacation home:
- Put the property in a revocable trust
- Gifting the property during your lifetime
- Establishing an LLC
- Transferring the deed upon death
Put the property in a revocable trust
By putting the property in a revocable trust, you can maintain control of your property and subsequently pass it on following your death. This can often help avoid the probate process as well.
Gifting the property during your lifetime
Another option for passing along a vacation property is gifting the property to someone prior to your death.
Establishing an LLC
By forming a Limited Liability Company (LLC), you can outline rules for how the property should be maintained, by whom, when those individuals should maintain it and more.
Transferring the deed upon death
Many states, including New York and Virginia, allow for the transfer of a deed upon death. This is yet another way you can pass on your vacation home, depending on the state the home is in.
How Can You Decide Who to Pass Your Vacation Home To?
Passing on your vacation home is a big deal. It is likely that your vacation home has been a source of many good memories for you and your family over many years. Because of this, it is important that the property ends up in the right hands. You will want to choose the person you feel will best care for the home after your death. Some factors you will want to consider include the following:
- Who will use the vacation property?
- Who is interested in owning the vacation property?
- Who has the financial means to own the vacation property?
Who will use the vacation property?
Determine who you think will actually get use out of your vacation property. Perhaps you have one child who intends on actually using the property, while your other children have no interest.
Who is interested in owning the vacation property?
Speaking of interest, it can be a factor in deciding who to pass your vacation home on to. As mentioned above, perhaps you have someone you are thinking of passing the vacation property on to but that person has no interest in owning it.
Who has the financial means to own the vacation property?
You will want to ensure that the property is cared for, and therefore, selecting someone who has the financial means to manage the property is a critical factor.
For any questions and assistance regarding succession planning for your property, or any of your other estate planning needs, we are here to help. Contact us today to learn more about how we can work with you.
For more information regarding various estate planning and elder law topics, view our resources page, where you will be able to find previous blog articles, newsletters and our informative webinar series.
