Don’t let this happen!
How Would You Like to Spend Your Vacation with Your Ex-Daughter-In-Law (and Her New Boyfriend)?
I have written numerous articles about the benefit of planning for the succession of ownership of your family cottage in order to avoid non-family members from obtaining ownership rights to use the family cottage in divorce proceedings.
Well, in spite of recommending that type of planning, I nevertheless have clients that, for one reason or another, resist doing the planning or fail to plan, and then call me later and report that the very thing they thought would never happen in their family actually came true!
The most recent example is a family that I will call “the Smiths,” who owned a cottage in Northern Michigan. Mr. and Mrs. Smith (the parents) decided to gift the property to their three adult sons.
Upon assisting them in transferring title to the property, I advised them that they really should consider drafting a succession plan to manage their sons’ common ownership that would result from the parents transferring ownership.
Mr. and Mrs. Smith’s response was that their adult sons “get along great” and should not have a problem managing their new common ownership of the property as well as any issues that typically are involved with that process. I also indicated that succession planning does not only involve developing a plan to manage the property, but it also protects the property from potential third-party creditors and divorcing spouses.
Again, the response I received from Mr. and Mrs. Smith was similar: that their sons’ marriages were all stable, and they could not foresee any of their sons being divorced in the future.
Now speed forward to the current date. I received a call from Mr. and Mrs. Smith who reported a rather interesting story regarding their now ex-daughter-in-law who received a share of their son’s common ownership in the family cottage in their divorce judgment.
Based on the fact that there was no formal succession plan, Mr. and Mrs. Smith’s son, in his divorce proceeding, was forced to share his one-third common ownership interest in the family cottage with his ex-wife.
Further, based on the fact that there were no usage provisions in any succession plan regarding who is entitled to use the property and when, Mr. and Mrs. Smith’s ex-daughter-in-law proceeded to show up most weekends to use the family cottage with her new boyfriend.
This obviously caused quite a stir and an uncomfortable situation for all involved, except for the ex-daughter-in-law who obviously, in her mind, had an ax to grind with the Smith family.
Contrary to what you may believe, I don’t make this stuff up. A failure to plan can result in the most unthinkable circumstances coming true. Also, as I have stated before, planning to plan is also not a plan.
