Many Americans work hard to purchase real estate. It has historically been a solid investment for your future and that of your family. Some families are fortunate enough to be able to invest in additional real estate, including a vacation home. A vacation home or cabin can be a great way to spend time with your family and loved ones. It is important to remember, however, that your vacation home occupies an important role in your estate plan. Vacation homes or cabins can often result in friction and fighting between relatives after you are gone and have wanted to pass it on to your relatives or children. A cabin trust is one way to protect your investment and your estate plan.
With a cabin trust, you can transfer your vacation home or cabin into a revocable trust. As the person who created the trust (i.e. the settlor), you can name yourself as trustee, allowing you to you retain control over the property and the trust during your lifetime. When you pass away, the trust becomes irrevocable and certain named beneficiaries will have the use of the cabin as per the instructions on the trust. With your trust documents, you can set conditions and rules for how the cabin is to be used. This can provide a good way to eliminate fighting between siblings, as it takes the decisions out of their hands. If a cabin is passed down directly to be shared between the siblings, they will often end up disagreeing on how the cabin is to be handled. Many times the family members have emotional attachments to a vacation home, so there can be strong disagreements about whether the home is to be sold, rented, or kept. With a trust, you can set those conditions and provide how the home is to be handled, reducing the chance for family disputes. When considering a cabin trust, remember that after you pass, there will need to be a new trustee designated. You should carefully consider who should be named as the trustee; naming a neutral third party who does not stand to benefit from the cabin is the best way to reduce future disputes.
Call us today at (651) 371-9117 and talk to us about your assets and your goals. We have helped many clients with their assets and estate plans.