Blog — Family Business

Wednesday, October 23, 2013

One of the most critical issues in any cottage succession plan is “when,” “how” and “to whom” can common owners of the family cottage transfer their ownership interest. Absent specific planning rules to govern these issues, transfers of ownership and decisions of an owner to sell his/her ownership in the family cottage is usually the most significant threat to keeping the cottage in the family.

 

Restrictions Usually Require “Intra” Family Transfers

 

Most often, the primary concern is to prevent any ownership of the family cottage from being transferred either voluntarily or involuntarily to a non-family member. A “Voluntary”...

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Thursday, October 10, 2013

Many of you have been there. You tell your children, “Please clean up your room” and get the response, “But I just cleaned it!”

This exchange is often the same source of frustration that commonly confronts families who own and use the family cottage. I often hear about “No matter how much I clean the cottage before leaving, my sister/brother will always find the speck of dust that I missed.” Or, my favorite, “I drove eight hours to the family cottage and arrived at midnight, and all I wanted to do was get into bed. When falling between the covers, I encountered dog hair, sand and a dead crayfish my sister’s Springer Spaniel left behind!” 

Everyone has different...

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Wednesday, October 2, 2013

When meeting with clients who are parents to discuss cottage law and succession planning with respect to their family cottage, I always begin with two basic questions: “Do your children want the cottage?” And, if the answer is “Yes,” “Can they afford it?”

The question to whether the children “want the cottage” may seem unnecessary, but given the priorities and expenses incurred by today’s younger generations, one cannot always assume acquiring ownership of the family cottage after Mom and Dad die is a priority for every child. Children have careers and get married. Those and other factors may take them to other locations around the country and even around the...

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Wednesday, September 25, 2013

One of the challenges I often encounter in my practice, particularly in cottage succession planning and family business situations, is that clients tend to focus on how things work in the present. They assume that present methods of management, problem-solving, payment of expenses, use of the family cottage and how ownership interest would be transferred will work the same way in the future. That is a risky assumption.

To expect that the next generation(s) of owners will maintain the same types of relationships, communication styles and cooperative efforts that the current generation enjoys is wishful thinking. That fact, together with factors that impact people’s lives such as...

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Wednesday, September 11, 2013

Insurance coverage is an important item to be addressed with respect to Cottage Law and Cottage Succession Planning. Every cottage has insurance to cover risks of loss due to damage of property and liability to individuals who may be injured on the premises. Insurance coverage is extremely important and, in most cases, is required by banks or lenders that hold the mortgage on a cottage or vacation property. So the question becomes, “What should an individual or family engaged in a cottage succession plan do with respect to their insurance coverage?”

The first thing to do is to contact your insurance agent and explain the type of succession plan you have chosen, so he/she...

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