If you wish to leave your cottage to your children, plan ahead to get everyone on board and avoid misunderstandings.
Discussing present and future plans for the family cottage is crucial as family members age and grown children might have varying levels of interest in maintaining the property.
If some of your children want the cottage, and others do not, the issue may become how to equalize the estate. If the cottage will form a large part of your estate, life insurance may help fill the gap for the other children. If you are not interested in paying the insurance premiums, perhaps your children will be, if the insurance policy is the solution to keeping the property.
If several children want the cottage, you should consider a co-ownership agreement. It sets out how the cottage will be used, who will pay for it, and who will be responsible for its upkeep. The agreement should also specify how the parties can be bought out in case of disagreement, and what happens upon the death of one of the siblings.
There can be a lot of emotions wrapped up in the family cottage. It’s important to plan how it will be passed to the next generation before that day arrives.
Your estate: the next generation
How you choose to pass your assets on to your children is a personal decision and can be done in a variety of ways. It’s often beneficial to discuss your plans with your kids, so you clearly convey your intentions, develop a philosophy regarding the family legacy, discuss any concerns about protecting their inheritance and maintain family harmony.
Once your estate plan and will are in place, review them every few years to make sure that if your family’s circumstances have changed, your current situation and wishes are reflected.
Estate planning for blended families
If you have a blended family, where some or all of the children are not the natural or adopted children of both spouses, a standard will may not be appropriate if you want to ensure that children of both spouses receive part of the combined estates.
Possible options include spouse or common-law partner trusts, dividing the assets between the spouse and children, and using life insurance to satisfy all beneficiaries.