How to keep the cottage in the family

First, find out who actually wants it. Then adopt the best transfer plan, ownership structure and tax strategy.

Matthew Elder 4 July, 2016 | 5:00PM

A cottage is a place of pleasure, where friends and family gather far away from the bustle and worries of city life. But when the time comes to figure out what will become of it after you die or are no longer inclined or able to use it as you get older, bliss can transform quickly into worry.

In many cases, the cottage is passed on to the next generation. In a perfect, well financed world, that is the ideal solution. But often one of the children cannot afford to buy out his or her siblings during the estate-distribution process. If the plan is to have all the kids share the property, the same issues of financial inequity can wreak havoc. And even if money isn't an issue, there can be disagreements over maintenance and improvements.

Devising a successful cottage succession scheme can be among the biggest challenges of estate planning. "There are many issues to consider when assessing a cottage's future, a task made all the more difficult by the fact no one situation is the same," says Anthony Layton, chairman of PWL Capital Inc.

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Matthew Elder

Matthew Elder