Cottage Succession Planning
What you need to consider.
A ScotiaMcLeod advisor has access to a team of experts integral to your overall financial strategy to help maximize opportunities while managing potential challenges.
There is No One Right Option
The best option is the one tailored to your family's unique situation and concerns.
Financial considerations are often paramount when thinking about cottage succession planning. Capital gains tax implications and the potential for probate fees and land transfer tax need to be part of the discussion. There are a number of transfer options available - lifetime gift, transfer to joint tenancy, testamentary bequest, transfer to a trust or corporation - and each should be viewed with an eye to the financial implications and funding options.
Often overlooked, however, are the "soft" issues. While family dynamics play a key role in most estate plans, the significance is never greater than when it comes to cottage succession planning. Each family member has a unique and personal stake in this issue.
Most people want to treat their children fairly. This can be a problem when not all have an interest in and/or the ability to participate in the cottage. More often than not, an out-of-town child, a child with significant financial constraints, or some other family complexity is part of the equation. It's important to remember that fairly does not always translate into equally.
A successful plan will take into account all the variables. An experienced estate planner can help clients identify the relevant issues and choose the best transfer option for them. Where the costs of transfer are a significant concern, funding options (including insurance solutions) should be reviewed. The plan should also address the realities of co-ownership including the costs of maintaining and sharing the cottage.
