Estate Planning – The Family Cottage
It is not uncommon for our estate planning clients, in cases where they own a cottage or recreational property, to express a desire to keep the property in the family. Often they will instruct us to draft their will to leave the cottage to their children, who, in their minds, will hold the cottage jointly and continue to enjoy it long after their deaths.
In all of those cases, we caution our clients to think carefully about how they treat the family cottage to avoid a family dispute after their death. Here are a few things to consider:
- While the cottage may have been enjoyed by the entire family during the lifetime of the parents, will all the children want to continue to use the cottage if mom/dad are no longer there?
- What if one of the children doesn’t want the cottage and the others can’t or won’t buy them out? Is that child left with less than the other children?
- In many families, the children are in different economic circumstances – how will this affect the payment of expenses for the cottage? Will the “wealthy” child be encumbered with all the major repairs? How will the expenses be allocated?
- How will the time at the cottage be allocated amongst the children?
- Are there non-resident children for whom owning Canadian real estate may cause negative tax implications?
In many cases, forcing joint ownership of a recreational property on children may become more of a burden than a benefit, and that is something that should be considered and taken into account when preparing your will.
If you would like to discuss your estate plan with one of our lawyers, please contact us.
By: LaBarge Weinstein’s Taxation, Tax Planning, and Tax Litigation team.
This blog post is intended to provide general information and does not constitute legal advice. You should consult a lawyer for advice regarding your individual situation.
Every effort has been made to ensure the contents of the blog post were accurate as of the date it was written, however, the law can change and we cannot guarantee that the information remains accurate. In addition, because the comments above are of a general nature, they may not apply for every situation. If you have questions, please contact us and we would be happy to discuss your individual circumstances, and whether there have been any changes to the law that would affect the information presented.