Many Minnesotans are fortunate to own a cabin on a lake or in the North Woods where they can spend their weekends and vacations. A break from the rat-race can certainly be relaxing, and the family cabin is often just the place to do that.
Most people on vacation aren’t necessarily thinking about estate planning. However, when their vacation time is over and they return to their day-to-day lives, it can pay to develop a comprehensive estate plan. People may already have executed a trust or will that states what is to be done with their assets upon their death. However, when it comes to the family cabin, being detailed can be key.
One might think that leaving equal ownership shares of the cabin to their children is the reasonable thing to do and will leave it at that. However, when this happens, disputes can arise regarding the maintenance of the cabin, when each heir will occupy it, and whether the cabin should be sold.
For example, a person’s will could include a clause stating the heirs are to split the costs of property taxes and maintenance on the cabin equally. However, if one heir spends significantly more time at the cabin than another heir, the other heir may feel like the one that spends more time at the cabin should bear more of the costs associated with it.
These issues can be addressed ahead of time when the will or trust is being created. By letting the adult children have a say in what is to be done with the family cabin, there will be no surprises down the road. Any decisions should be documented in writing in the parents’ will or trust. An estate plan can even include buyout provisions, in the case one heir does not want to retain an ownership interest in the cabin.
There are legal formalities when it comes to executing a will or trust that must be planned for so it can be valid and enforceable. When an estate plan includes the family cabin, it is important that all details are worked out and agreed to by the parents and heirs respectively, to avoid potentially costly estate litigation.