Finally, it feels as though spring has arrived. This means two things around our home: It’s time to pull out the golf clubs and time to open the summer home. The worms at the course where I play are pretty crafty. When they see me coming they hide under my ball; it’s the only safe place for them. So I promise not to give any golfing advice today. As for vacation properties, though, I’d like to talk about a common ownership structure: the family trust.
The trust
A trust can be a useful estate planning tool for vacation property owners. Basically, a trust is a relationship among three parties: the settlor, trustee and beneficiary. The trust is created when the settlor transfers certain assets to one or more trustees, who hold and manage those assets for the benefit of the beneficiary (or beneficiaries). The beneficiaries enjoy the use of the assets but do not legally own them. If, for example, you transferred your cottage to your sister in trust for your children, your sister would legally own the property, but your children – not your sister – would be entitled to use the property. Read more…