Levy Zavet – Is it time to sell your family cottage?
Quiet days spent fishing on the lake, jumping off the dock into the cool refreshing water, nights spent around a campfire and endless family game nights: your family cottage holds beautiful memories for everyone in your family, and it’s a special place you want to hang on to. The peaceful days on the dock may easily erase all of the work and maintenance it takes to keep the cottage looking its best.
Sometimes a cottage is owned by parents or grandparents, but everyone in the family has been welcomed to stay as they want. But what happens when the parents or grandparents are ready to hand the cottage off to the younger generation? Is it right to keep the cottage in the family, or sell it to avoid long drawn out battles with your loved ones?
Keeping it in the Family
Many estate lawyers will advise a strategy for their clients where they have a very honest conversation with their children, grandchildren, etc about the cottage property. The conversation should be realistic, and include topics including who will be able to use it the most, who can afford the upkeep on it and who really wants it. Sometimes family members may not be totally honest with themselves during this conversation, and some may feel like there is some favouritism going on.
There may also be no family members who want to step up and take it over, but they may hold back their feelings because they know their parents or grandparents want to keep the cottage in the family. Be prepared for the fact that there might not be anyone in your family who really wants to take on the responsibility of a cottage. There may also be difficulties that arise when it comes to valuing the property so the owners don’t have to pay too much in capital gains, and the receiving family member isn’t paying too much for it.
Selling the Property
If the family cannot agree on passing the property through to one of the children, there are a couple of options. One option is to have the property valued independently and the children can come together to buy it, so that everyone owns it instead of one. The trouble with this is if one of your children is far more financially stable than the others, they may end up carrying the financial burden of maintaining the cottage.
Another option is just to sell the cottage to someone outside the family, and the family members will then have a cash inheritance instead of having to worry about how to fairly divide a property. This way, each member will get the portion of your estate that you designate to them.
It’s hard to determine the right time to sell your property because none of us know when we will pass away, and how many more years of enjoyment we might get out of our cottage. The best thing you can do is meet with your estate lawyer and discuss your options so that your children won’t end up in court battles for years to come.
Contact Levy Zavet today
If you are in the process of deciding what to do with your family cottage, we can help you explore your options. Contact us today for a consultation.