More Memories, Less Drama—Estate Planning for the Vacation Home
The family vacation home: For many, it’s been the source of long-lasting memories, from seaside family reunions at the shore house to roasting marshmallows with the kids at the country cottage. As time wears on and the next generation starts families of their own, it’s common for aging second-home owners, now proud grandparents, to want that same joyful nostalgia to continue on after they’re gone. Unfortunately, it’s all too common that these great intentions are more idealistic than realistic, as the elders are often the catalyst that keeps the family traditions going. When the home is inherited by two or more adult siblings, unanticipated disagreements often follow. For example, one sibling wants to buy the others out, while another overruns the calendar; one planned a party during the same week that another planned a quiet escape. Suddenly, what started as “Let’s keep the traditions going!” becomes “Screw it, let’s just sell the house—see you at Thanksgiving.” However, this type of family chaos is preventable (even with the—let’s say, strongest personalities) because with proper planning, legal solutions can keep siblings from pulling each others’ (or their own) hair out, while honoring the family memories that their parents hoped would carry through to the next generation. Here’s how to do it.
How to protect your vacation home through estate planning
There are a few distinct ways that you can protect your family’s assets through estate planning.
To save you from Googling every single recourse and getting lost in a sea of legalese, we’ll break down three options, from our most to least recommended.
Most recommended: Including your vacation home in your trust plan
Why should a country house (or holiday home, weekend home; however your family refers to it) be baked into your overall estate planning?
First off, anyone who owns a home should use a trust for their estate planning, but especially if they own two houses. One thing to consider is that many vacation homes are often in another state, so if you don’t use a trust, you’ll need to open a probate (the tedious court process) in both states to protect your homes. (Another headache you don’t need.)
Second, when doing the overall estate planning, a trust can help directly manage co-ownership among multiple beneficiaries; in this instance, let’s say the grown children of the original homeowners. In this case, the house wouldn’t go under the kids’ names, it would go into a trust managed by all of the siblings.
Usually, the trust lays out guidance: Who’s in charge of maintenance and upkeep, how to set the calendar so that each wing of the family gets equal or adequate time there, and it can even settle bedroom assignments if that’s been a source of constant conflict. These guidelines help to prevent one voice from overpowering the others by providing structure for when disagreements come up. (Because if you’ve had a sibling, you get it.)
In the event that the home is just not going to be used, it can still be sold; however, working with an experienced lawyer to set up this type of trust is the best way to prevent feeling like selling is the only option.
Less Recommended: Set up an LLC
You might hear about the option of putting the home into an LLC (Limited Liability Company) as a way to reduce liabilities for family members who inherit the house. We generally don’t recommend this unless the home is either currently, or going to be, rented out to others—such as an Airbnb rental.
In that case, you should have an LLC in place either way and can then use that language within an existing estate plan.
Least Recommended: A standalone trust
True to its name, a standalone trust is apart from all other estate planning. We don’t like to recommend this option, as we stand by the fact that it’s better for you and your beneficiaries to have all of your assets protected in a trust, not to just cherry-pick one or two and leave the rest vulnerable.
There is one situation, however, where this option might come in handy: If your parents didn’t set up a trust with structured guidelines and now the proverbial horse is out of the barn, and your family is in that awkward stage of battling over the (preventable) disagreements we mentioned above, a standalone trust can provide backup. A standoff between siblings can be resolved by a lawyer who ensures a properly formed trust can organize a set of rules and management guidelines.
We’ll protect the assets; you preserve the memories.
Call us to learn more or to get started; an attorney can guide you to find the best options.
P.S.
We’ve got an upcoming event at Robibero Winery on July 10, 2025 from 4:30-6:30pm.
Bring your questions or curiosity and join us for a short presentation about middle class asset protection, general trust planning, and more. Learn about it here: https://duboiselderlaw.com/rsvp-aged-to-perfection-event/.
Can’t attend? Contact us any time to set up a consultation to learn more about how trusts can work for you.