Inheriting that Summer Vacation Home

There are many Estate Planning issues to consider if you are thinking about purchasing a vacation home or now own a vacation home and are contemplating passing it on to your children. One of the most important is how title to the home is held.

You can hold title in your name, or you can hold it jointly with your spouse or other relatives. You can hold title as joint tenants with rights of survivorship so that the property will pass to whomever remains alive, or you can hold title as tenants on common so that all owners can decide for themselves who receives their interest in the vacation home when they die.

An advantage to holding title as joint tenants with your spouse is that upon the death of the first spouse, the property passes to the survivor without having to go through probate with the court. However a disadvantage is that the deceased spouse cannot use this property to take advantage of any unused estate tax exemption amounts.

You will want to consider if the owners all get along so specific rules do not need to be put in place addressing possible conflicts, and you will want to consider if each owner paid an amount equal to his proportionate fractional interest in the property (if not equal, gift tax issues may arise).

 Consult your estate planning attorney for further information