If you’re like many Floridians, you have a home here and one in another state. Maybe your Florida home used to be your vacation home, but now that you’re retired, it’s your full-time residence. However, you still have a cabin on a lake or in the mountains that you’ve owned since you lived up north. Maybe your vacation home is here in Florida – perhaps on the Keys.
Whatever the situation, you need to consider how to handle the property in your estate plan. If none of your kids wants it, you can simply direct that it be sold and the profits returned to your estate, or you may go ahead and sell it yourself. If only one child is interested in it, then you’ll want to discover how to leave it to them.
What if all of your children would like to keep it in the family? It may seem like a good solution to leave it to all of them. However, the reality of siblings owning a property together can get messy fast -– particularly if they’re in different financial situations or live in different parts of the country.
How does this kind of trust work?
Some people place their vacation properties in a trust. If you do this, your children will be the beneficiaries. The trust is the owner, and a trustee of your choosing manages it.
The trustee needs to be able to manage the property, make decisions and resolve any conflicts based on your instructions or their own judgment. You might want to give this responsibility to someone you know and trust outside the family who can deal fairly and, if needed, firmly with all beneficiaries
This is not an inexpensive option. You’ll need to pay the trustee for their time and work. You may also want to fund the trust with money for taxes, insurance, maintenance and other expenses. However, if you decide to place the property on a vacation rental site or rent it out, then that rental income can go back into the trust.
This is just one option, and it’s not for everyone. However, it’s important to know all of your options before determining how to deal with an asset that likely has significant economic and sentimental value.