How to avoid battles over the family cottage
Neil Smith - Nov 15, 2021
Family members fight over a family cottage because of a lack of planning
Let's imagine a hypothetical situation surrounding a large family and the ownership of a family cottage.
During Thanksgiving, the mother and father made the announcement that they had made major decisions about the family cottage without getting financial advice or telling anyone in the family. The parents had a lawyer draw up the documents and thought everyone would get along without a fuss.
The two eldest siblings were left in charge and the parents believed everyone would be treated fairly.
What happens in a situation when a family cottage changes ownership within the same family? What rights do the new owners have and what about everyone else? Who gets the money and are memories being sold? The parents believed they were doing the right thing but instead this family is now in a fighting mood.
Because nobody thought about talking to the accountant before the sale was finalized, the new owners found out there was capital gains tax to pay. This created a whole new set of memories and they're the type most families would like to forget.
The moral of the story here is that you should always consider getting professional advice before making a major purchase. This can help make sure you know all the financial and legal issues that need to be covered so that the deal goes through efficiently and it's a win-win for all parties involved.
Click on the link below for an article about this type of situation:
How to avoid succession battles with the family cottage | Advisor's Edge
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