Cottage Succession – Keeping it in the family
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For most of us, there are wonderful memories attached to a family cottage. However, at some point, cottage owners will face the financial and emotional challenges of selling or transferring this cherished family asset. To ensure that those priceless memories continue for generations to follow, it is important to plan appropriately. Addressing these issues today, especially for those who are facing large capital gains, can help ensure tax-efficient handling of your estate while keeping harmony in the family.
Strategies for effective transfers to reduce the tax you pay:
Act today, to save for tomorrow
Transfer cottage to the surviving spouse
Consider making the cottage your principle residence, if it has appreciated more than your home
Implement a life insurance solution to help fund the tax liability upon transfer and/or to equalize the estate for those siblings who are not interested in owning the cottage
Consider owning the property jointly with your children to reduce or avoid probate taxes where applicable
Utilize a trust which can help in situations where children may not be able to handle financial responsibilities of the cottage or where creditor protection may be an issue
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Identifying and discussing those issues that may cause conflict with your children/beneficiaries and acting on opportunities to reduce taxes are all key aspects of a successful cottage succession plan. If you would like a copy of our educational report entitled “Cottage Succession - Keeping it in the family”, that discusses these strategies in more detail or if you would like help developing an effective plan, please contact your Investment Advisor.