If you own a family cottage, it is undoubtedly a place of comfort and good memories. However, the cottage can also become a point of contention among family members if the proper planning isn't done.
In far too many cases, family disputes erupt over what to do with the cottage when the parents are no longer able to tend to it themselves. Often, this unfortunate turn of events is the result of the parents' simply leaving the matter to the children to decide. Alternatively -- and preferably -- parents who are cognitively able to do so can plan for the future of the cottage and of the family.
Open communication between parents and children can help the family avoid unpleasant surprises and potentially costly disputes. Understandably, though, families are often reluctant to discuss matters of asset distribution. One way to broach the topic may be to bring up the fairly bland matter of taxes and how the family cottage will fit into the equation.
For more on that, please see our previous post, "How is Ontario's estate tax calculated?"
Unfortunately, families who found themselves in disputes over the cottage often say they wish they had sold the property sooner and avoided the conflict. The distributed proceeds would have been a better choice, as opposed to the heartache and stress.
If you want to ensure that the cottage remains a place of comfort and fond memories, it is advisable to discuss your plans and goals with an experienced estate planning lawyer.