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Is a summer home among your special assets?

Michigan has a great reputation as being a place to go to enjoy the outdoors. Many people from other states will purchase summer homes on one of the lakes to enjoy with their families, or to rent out to others when they aren't in personal use. A summer home is a big purchase for a family, but it is often worth the extra effort and money it takes to maintain a separate house that is sometimes hours away from where a family actually lives. And, when kids get older and start families of their own, the summer home can actually become a focal point for large family get-togethers or a vacation spot for what was one family that has now become several. But does owning a summer home present unique questions from a probate standpoint? According to one recent article, the answer to that question is a resounding "yes."

What is the best way to deal with deciding on a potential heir for the property? As the property could generate strong emotional attachments among several children or siblings who have enjoyed the home in their youth, what is the owner to do about passing this property on? After all, one of the main goals of estate planning is to avoid prolonged probate litigation. Fortunately, the recent article had a few tips on how to handle this situation.

One suggestion was to give away the summer home prior to a transfer through estate planning documents. By discussing concerns openly among all of the parties who may be interested in an ownership stake in the property, a solution could be reached well before any estate planning document even needs to come into play.

The one really interesting suggestion, however, was to create a limited liability company to take control of the property. This route would allow all interested parties to have an ownership share, as well as providing an excellent way to schedule use of the home or rent it out to others.

Everyone has their own unique personal property and assets that may have a greater meaning to some relative over another, whether that is a summer home or not. Making sure that this special piece of property ends up in the right hands can be a goal that is sure to be accomplished with the right approach to estate planning.

Source: LifeHealthPRO, "4 estate planning concerns for clients with vacation homes," Tom Nawrocki, May 31, 2013

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