Cabin planning is preparing for the inevitable time when the owners of the cabin pass and the rest of the family wants to keep the cabin in the family. If done right, cabin planning will protect the family retreat and minimize conflict within the family. If a family has a cabin, a thorough estate plan should address how it will be held in perpetuity.
What considerations are there?
Every cabin is unique, as well as are the dynamics of the family that owns it. There are several things that need to be considered when planning for the cabin:
- Current Ownership. Who owns the cabin outright now, and how? The plan will be different depending on whether the cabin is owned by one person, in joint tenancy with right of survivorship, or as tenancy in common. Check the current deed, as memories of these things tend to be shaky.
- Interest in Future Ownership. Everyone may have loved the cabin growing up. That, however, does not mean that everyone will want to own the cabin in the future. It may be too much of a financial burden on potential owners. People may just have moved on to other interests. Make sure to determine who wants the cabin before a plan is formed.
- Ownership Issues. Budgeting for maintenance, utilities, renovations, and emergencies are merely the financial burdens that come with a cabin. With potentially multiple owners, there are a host of other issues. These include, for example, dispute resolution, potential buyouts, and how people will share a cabin during the year.
If done right, cabin planning will minimize family squabbling. Clear roles will be established for daily and yearly upkeep and burdens. Unexpected events can be prepared for. And the cabin can be ready to pass on to the next generation when that time comes.
How is Cabin Planning done?
There are essentially three ways to go about planning for a cabin's legacy:
- Form an LLC: The family can form a limited liability company and transfer the ownership of the cabin to it. Then the family can distribute shares of the LLC to the rest of the family on the last surviving owner's death.
- Outright Ownership: Upon the death of the last owner of the cabin, the cabin can pass to the new owners outright as either joint tenants or as tenants in common. Each way has its own quirks, but if there is only one beneficiary receiving the cabin, it may be easiest.
- Cabin Trust: Probably the most common way to plan for cabin succession is to place the cabin in a trust. That way the cabin can be shielded from creditors and terms of the trust can outline the various aspects of ownership that may arise.
Minnesota is known through the country for the number of cabins owned by families. And families' attachments to their cabins is special. Signature Law is dedicated to providing people with a comprehensive estate plan. As necessary, this should include planning for the family cabin. If you have questions about your family cabin's succession, please contact us for a free consultation.Schedule a Free Consultation