Florida is an ideal location for a beachside vacation home or condominium. Many northerners or “snowbirds” like to make their way south every winter and enjoy all that south Florida has to offer. Excellent restaurants and weather make Florida a primary location for vacation homes. Miami, Ft. Lauderdale, West Palm Beach and Boca Raton are some of South Florida most desirable cities. These vacation homes make up part of a person or couple’s estate plan. There are no rules on how a person may give their vacation home under a will. This flexibility can sometimes unfortunately lead to unintended disputes among family members.
If you own a vacation home either here or in another state (or country) it is wise to take some time and consider the following questions in deciding how to leave the property in the will. First, if you want to leave the property to a child or family member, consider first asking them if they want it. Often children may have their own preferences as to what they look for in a vacation home. Maybe they want something closer to their home or a location with more activities for their children. Secondly, consider how the family member may wish to use the property. Maybe the family may prefer the property as a rental then for their own personal use. Thirdly, consideration should be given as to how maintenance costs and other costs will be paid. Will they take to property free and clear of the mortgage or will they have to pay the mortgage?
Furthermore, if the vacation home is given to several children, disputes may arise when there is not agreement as to how often, and for how long, each family member may use the residence each year. The children will have to decide provisions for sharing utilities, taxes and maintenance expenses. Also they will have to agree on what will happen when the property needs renovation or improvement. In an effective estate plan these potential issues can be alleviated before they occur.
A thorough estate plan will include provisions as to how to resolve the above disputes. An estate plan may include voting procedures for making decisions. For example, a clause could provide that only living children get to vote and the agreement has to be unanimous. Or in the alternative, the estate plan could provide a decision may be made by only a majority of the votes and the voters include representatives of deceased children.
If you live in the Miami-Dade, Broward or West Palm Beach area and need help with these and other estate planning issues, please feel free to contact the experienced attorneys at Chepenik Trushin at (305) 981-8889 for an initial consultation.
Steve Leimberg’s Estate Planning Newsletter Issue: 1923 13-Feb-12 IRS Federal Income Tax Code