A weekend retreat to the lake or woods is a way of life for many Minnesotans, but as the years pass, the shared memories turn to questions about the future of the family cabin. If you intend to pass a cabin to the next generation, it is wise to consult with an experienced cabin planning attorney.
At Guttman Law, PLLC, we regularly advise clients about cabin trusts and other estate planning tools that can help to maintain and pass on the family cabin. We understand the unique issues that may arise and will help you develop an estate plan that protects both your interests and your family cabin. Contact our office today to schedule a consultation.
Why You Need a Minnesota Cabin Planning Attorney
There are myriad issues that must be dealt with when a family cabin will be co-owned by siblings, other family members, or friends as is often the case for many families in Minnesota.
A skilled estate planning attorney can help you consider several key issues in creating a well-conceived cabin plan:
Financial Contributions/Annual Labor
Family cabins have annual costs (e.g. taxes, maintenance, heating, cooling) and may also include mortgage payments or annual association fees. In addition to annual costs, cabins come with year-round jobs: seasonal opening and closing, putting in and storing docks and boats, yard maintenance, snow removal, cleaning. It is essential to budget for anticipated expenses and to consider the value of sweat equity to ensure fairness among the beneficiaries.
Maintenance and Renovations
Lake homes, cabins, and vacation properties require ongoing maintenance, therefore cabin planning anticipates future expenses (roof replacement, plumbing, grounds maintenance, renovations). Such expenses depend on each family member’s ability to contribute, so careful planning is required to ensure that co-owners share costs in a way that is fair to all.
A well-conceived cabin plan will determine who gets to use the property and when. Depending on how many guests the cabin can accommodate, it is wise to establish a calendar system to allow co-owners to reserve time, consider a rotating calendar for big holiday weekends, such as Memorial Day, Fourth of July, and Labor Day, and clarify how long exclusive use will be permitted.
When ownership of the family cabin transfers to siblings, other family members of friends, it is important to agree to ground rules in advance, such as the condition owners leave the cabin after they depart, boat and dock usage, acceptable guests, and other rules that can be easily understood and observed by all owners.
Transfer of Ownership
While thinking about transferring the family cabin to new owners or selling it outright is
difficult, there may come a day when co-owners may not have the funds, the time, or interest to manage the property. As such, a properly designed cabin plan will include a plan for transferring or selling the property in advance to avoid potential conflicts.
Estate Planning Options for a Family Cabin in Minnesota
When you consult with Guttman Law, we will provide you with informed representation and work to design a cabin plan tailored to your family’s needs. Our experienced attorneys will help you explore your options, such as:
A cabin trust is commonly used in trust-based estate plans and readily resolves many of the above-mentioned issues. A trust will allow for the proper transfer to the co-owners and establish an operating agreement for maintaining the property.
Our experienced cabin planning attorneys can help you navigate complicated trust-related matters, not the least of which are establishing an equitable distribution plan, clarifying financial contributions, and selecting a trustee. It is common for a cabin trust to have two or three trustees appointed to make decisions about running property on a rotating basis. Above all, our attorneys will work to protect the interests of the beneficiaries.
Establish an LLC
Another option is to establish a Limited Liability Company (LLC), a business entity formed for the purpose of owning and managing the cabin. An LLC is a flexible tool for managing property in general, but the entity must adhere to state law in terms of maintaining accurate business records and control over the assets. Using an LLC is especially useful in situations when cabins and vacation properties are co-owned by friends or other non-family members.
Trust Guttman Law to establish a cabin plan that protects your family. Well-versed in the related trust administration, real estate, tax planning, and business succession aspects of cabin planning, we are committed to helping you achieve your objectives.
Contact Our Experienced Minnesota Cabin Planning Attorneys
Regardless of how long the cabin has been in your family, we will work with you to establish a cabin plan as part of a comprehensive estate planning strategy. Contact us today to get started on your cabin plan.