Planning for shared family property.

Planning for shared family property.

Without careful planning, inheritance of a shared family can create problems and conflict for future generations. We have unmatched experience and expertise in planning to keep these special properties in the family.

Whether it’s a camp on the lake, a ski condo, a beach house, or another type of second home, these properties can bring a family together and foster deep connection. Many families dream of passing these properties down for future generations to enjoy.

However, more often than not, the owners of these properties (and their attorneys) fail to consider the unique ways in which transfers of shared family property are more complex–emotionally, legally, and financially–than other property transfers.

Without careful advanced planning, the transfer ofa family property from one generation to the next almost inevitably leads to problems and conflict for future generations. These conflicts commonly arise when at least one co-owner:

  • transfers a share of the property to a partner, spouse, or ex-spouse (either on purpose or accidentally);

  • can’t afford or refuses to pay their share of expenses for the property (e.g., taxes and maintenance costs);

  • lives further away from the property, or doesn’t use the property as much as other owners; or

  • needs money and resents having money that is “trapped” in the shared property.

The good news is that these problems and pitfalls can almost always be avoided (or at least minimized) with thoughtful advanced planning and open communication.

We help families navigate the conversations that need to be had and decisions that need to be made about whether and how to plan for transferring a shared family property to the next generation. For families that decide they want to prioritize keeping a shared property in the family for future generations, we can help guide them through a decision-making process to reach agreement on the key planning elements necessary to create a successful multi-generational shared ownership plan, which we refer to as an “AUGUST” plan:

Allocation of ownership – how are ownership percentages to be allocated in each generation?

Understanding of purpose – is the property for family use only, or for rental? To be kept “as is,” or renovated?

Governance – who will make decisions about day-to-day management of the property? Majority vote? An elected Manager? A Trustee? Rotating responsibility?

Use rules – written rules for everything that might cause conflict or resentment, from determining the use schedule, to pet policies, to restocking firewood and toilet paper.

Stewardship of resources – the plan must set out a realistic budget and rules for owner financial contributions toward expenses for, maintenance of, and improvements to the property, and must clearly specify the consequences of an owner’s failure to pay their share of these contributions.

Transferability – who can ownership shares be transferred to? Descendants only? Spouses? Step-children? Charities?

There are many issues to iron out in a successful shared ownership plan, and the idea of navigating these questions on our own can feel overwhelming. We are experience in and passionate about guiding families through a process to make informed, intentional decisions on these issues. We’ll help you craft a solid plan to keep these special properties in the family for the next generation, while keeping your family out of conflict. If your family owns a meaningful property that you want to keep in the family, give us a call at (518) 309-2252, or schedule a free 15-minute introductory call online.