Handing Down the Cottage

2011-11-22 | 12:44:29

Earlier this month I went to a presentation from Mr. Geoffrey Parker, financial planner and investment adviser about the cottage as part of a family estate.

Here are few good points that Mr. Parker shares with us:

Before deciding to give the cottage to the kids in your will or during your life, they should be asked!

A family council is suggested. A forum where all adult members of the family can be heard in a safe, open environment. The family can discuss cottages issues related to the family, and any family concerns regarding the estate planning, business succession and future care issues. Hiring a facilitator was highly recommended.

Then a cottage agreement is written and signed by all parties. This document will delegate tasks and responsibilites; division of labour; agreement to usage; mechanism to retain ownership or not and; a budget!

If you choose to transfer ownership during your lifetime, please consider that it will trigger capital gain, except to the spouse. It might expose the property to another's creditors or become part of family law issues beyond anyone's control (right of usage to an ex!).

Finally, do not plan in isolation. Let it be part of a complete financial strategy. Use professionals: financial planners; estate lawyers; real estates agents; tax advisors.

To learn more about this topic, go to www.geoffreyparker.ca