Estate planning is essential for everyone and even more vital for those who have acquired significant wealth or assets. If you are a Texas resident with a vacation or second home, you may be wondering how you should pass it down to your loved ones someday.
According to the National Law Review, you should carefully account for your vacation home during estate planning.
Consider your desired conveyance
Whether you have a lake home, pied-a-terre in the city, ski condo in the mountains or beach house on the coast, you and your loved ones cherish the time spent at your special retreat. It is undoubtedly the source of many wonderful memories and may even have been in your family for several generations. Or, sometimes a vacation home is merely just a wise financial investment. Either way, it is imperative that you give significant thought to how to include this property in your estate planning.
When it is a cherished family home, there are additional emotional attachments involved. Perhaps you have several children and everyone in your family is equally devoted to the property. Or you may have a situation where one child has not stepped foot in the home for decades, whereas another uses it on a regular basis. In that instance, you may wish to leave the property to the latter while giving an asset of equal value to the former. For the sake of familial harmony, it is crucial to spend a significant period of time considering what you wish to do. To avoid hurt feelings and disagreements once you are gone, it is good to have these discussions with family members about your decision. Sometimes, heirs would rather have the financial proceeds.
Consider your best options
If multiple loved ones wish to keep and share the home, there should be a written agreement that covers matters including:
- Usage of property
- Payment of taxes and maintenance
- Buyout options for future
Carefully considering many different scenarios is the best way for your family to enjoy this property long into the future.
There are legal mechanisms available when your estate planning includes a vacation home. Putting the home into a trust offers various options for your individual situation and allows you to customize the process. You may even wish to set up funding for property related expenses for a set period of time. Another route that protects this asset is to hold the property in a Limited Liability Company, or LLC. Additionally, if your vacation home is outside of Texas, you should know that different states have different laws.