Let’s face it, there are many differences between generations. This can become very apparent, especially when the generations come together as a family.
For many Canadians, the cabin is where this coming together takes place and many wonderful, multi-generational memories are housed. Amazing things happen at cabins, from bonding and making memories to coming together to partaking in regular maintenance and collaborating on projects that require sweat equity, like rebuilding the dock.
Anyone with a cabin knows there are many considerations – financial and emotional – that go into preparing to transfer the family cabin to the next generation. Sometimes people get so focused on how to transfer the cabin – capital gains tax, equity between children and so on – they forget to ask the next generation if the cabin is something they want to inherit.
The fact is, sometimes the next generation may not have a strong connection to the cabin or the means to pay for (their share of) the costs associated with maintaining the cabin. Perhaps the next generation would rather have the proceeds from the sale of the cabin instead of the property and the ongoing costs associated with it.
Passing the cabin to the next generation can get complicated. Having open, frank discussions with all the generations and parties can identify the options and determine what everyone’s wishes are. You may find it helpful to have your financial advisor at this discussion to talk through options and impacts of various scenarios. Not to mention a third party can help keep people focused on the discussion at hand.
Once the intentions for the family cabin are identified, a plan can be developed to execute and achieve the goal. It is important to document your family’s philosophy for the cabin in your estate plan and will. A regular review every few years will help ensure if your family’s circumstances have changed, your current situation and wishes are reflected.
If you would like help discussing the options for transitioning your cabin or would like a knowledgeable financial professional to work with your family, connect with us.