If you’re doing estate planning in Michigan and you own a cabin or a cottage on the lake, that’s probably a big part of your plans — some of which may have significant emotional meaning. These vacation homes are a massive part of Michigan’s overall lifestyle. Your children probably loved going to the cabin as kids, and they still love it today. Your estate plans may seek to preserve those memories and pass those experiences on to the next generation.
Financial factors may, however, change your outlook. Like all housing values in Michigan, which have soared in recent years, the price of second homes and vacation properties has been trending steadily upward. Your cabin isn’t just a family heirloom or a place for unique memories: It’s one of the most valuable assets that you own.
Deciding what to do with a vacation property in your estate plans can get complicated
What if some of your children see the monetary value of the cabin and decide they want to sell the property and make some real money, while others can’t imagine selling and just want to jointly own it? What if you’re leaving the cabin to children with different levels of personal means — some who can afford the costs of ownership and property taxes and others who can’t?
Questions like these can make deciding how to handle this particular asset in your estate plans difficult. There are always solutions, however, if you plan in advance. For instance, you could set up a trust to cover the base costs for the next generation so they don’t have to worry about it. If some heirs just want to sell, you could find a way to leave them cash assets instead, leaving the cabin ownership to those who want it.
The key to effective estate planning lies in exploring all of your options. Working with an experienced attorney can help you uncover options you may not realize exist.