Saving the family cottage with a trust or a limited liability company
For many families with cottages, their cottage represents many years of happy memories. To many, the cottage is more than just an asset; it is an integral part of the family. They are keenly interested in keeping it in the family and maintaining family harmony after Mom and Dad are no longer there to be the peace maker between the children.
After the creation of the basic revocable trust, a cottage subtrust can be established, a separate cottage trust or a limited liability can be created.
With this strategy the family cottage is retitled into whatever type of document that is created. The document then can establish a system for using and maintaining the cottage. This can include how use of the cottage will be scheduled; how the cottage will be maintained, restocked, cleaned to a standard level; who will manage to property and pay for extra ordinary expenses; when the property will be sold and how the money will be divided up after the sale. This also provides for asset protection for an accident that has occurred on the property, if insurance doesn’t cover the accident.
During Mom and Dad’s lifetime, they get to keep total control if that is their goal and have input into how the children will manage the cottage after Mom and Dad no longer want to or can.