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ARTICLE · 30 JUNE 2004

Succession Planning for the Family Cottage

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One of the most difficult assets to deal with in an estate plan is a family cottage. Although you may want to keep the cottage in the family, it is often difficult to develop a plan that is tax-effective and that ensures equitable enjoyment of this asset by those family members who have an interest in maintaining it.

CanadaWealth Management
McMillan LLP
McMillan LLP
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One of the most difficult assets to deal with in an estate plan is a family cottage. Although you may want to keep the cottage in the family, it is often difficult to develop a plan that is tax-effective and that ensures equitable enjoyment of this asset by those family members who have an interest in maintaining it.

Issues that need to be addressed include:

  • who should inherit the cottage
  • ownership structure (ie, direct co-ownership, some form of trust or nominee corporation)
  • governance issues such as how the cottage will be shared, costs apportioned and decisions made (including decisions about selling the cottage)
  • how to fund the tax liabilities that will arise when ownership is transferred to the next generation

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