Due to its high value, extensive maintenance costs and emotional implications, family property is often one of the most contentious parts of estate planning and administration. This challenge can extend beyond the Ontario family home, with vacation homes often carrying many additional challenges for planners and beneficiaries alike. Here are a few options for estate planning with a vacation home in the mix.
One option is to simply sell the home and divide the proceeds among the next of kin. While this is often the simplest option, it can carry a heavy price tag in some cases. Along with selling expenses, capital gains can be sizable if the property has appreciated in value since its purchase.
If there is a person or a group of people who can reasonably care for the property, the vacation home may also be left to descendants. Owners should consider whether leaving the property in a trust is the best option, or if simply naming it in the will is adequate in their case. The location of the property may also come into play, as a property in a different province or country may have additional legal and tax considerations when making these plans.
Vacation homes can take a lot of time and money to maintain, so the ability to keep it in the family is largely dependant on the next generations’ ability to maintain it. Those who are disinterested in this added expense and responsibility may be able to sell their interest in the home, though conflict can arise over the property’s value. It is a good idea to speak to a lawyer in Ontario to explore legal options and get advice during estate planning, administration or litigation.