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Who will inherit your family cottage? Seven questions to get you started

You've probably heard the story about the young man whose father was very ill, with only a few days to live. The young man approached the woman of his dreams and told her that his father was ill, and that in just a few days he would inherit vacation properties worth millions.

To his delight, the woman paid a visit to the young man the next day. The problem? She announced that she was now his stepmother.

Okay, I don't know that the story is actually true, but it raises a good question: Who is going to inherit your vacation property? Specifically, let's talk about the cottage. I'm going to assume for a minute that you may want one or more of your kids to eventually inherit the property.

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Consider spending time at the cottage in the next few weeks with the kids, and have an open discussion using the following questions as a guide to understanding how your kids feel about the place.

Using the cottage

Who intends to live near enough to make regular use of the cottage?

As a practical matter, which of your kids have the ability to use the cottage, and who lives far enough away that they may only use it briefly each year?

Who would like to use the cottage and how often?

Even though a child may live close by, does he want to use the cottage? Maybe it's not his thing. Or perhaps he only cares to be there one or two weekends each year. Gain some clarity around this.

How will the kids using the cottage split their time there?

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Now that you know who is willing and able to use the cottage, and how often, how will the kids split their time once you've passed ownership to them? How will they make this decision each year? If you pass ownership to them during your lifetime, how much time would you like to spend there? Be clear about this.

If one or more kids are unlikely to use the cottage, some parents will consider leaving those children other assets instead. It could be a recipe for disaster if the children who rarely or never use the cottage still have ownership in the property. It can still work if everyone is in agreement on how costs will be shared and decisions will be made, but when one or more kids are rarely at the cottage, and aren't contributing equally to its maintenance, emotions can run high.

If you're not able or willing to equalize the estate by giving the non-users of the cottage other assets, consider granting the non-users certain rights if the child who inherits the cottage sells the property following your death. Perhaps the non-user children should be given a right of first refusal to buy the place, and a right to share in the sale proceeds if they don't buy it themselves.

If none of your children are interested or able to use the cottage, you might consider selling the property before your death. This will simplify things for your executor.

Maintaining the cottage

Who will pay for routine upkeep?

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Upkeep can be expensive. Costs include repairs and maintenance, property taxes, insurance, and utilities. There might also be larger capital improvements or expenditures that are required from time to time. Some parents who have the means will consider leaving some money in trust to fund some of these costs if one or more kids might struggle with their share of these. If a child chooses not to pay their share, should penalties apply? What will that look like?

How will decisions be made about what to repair and when?

I know my kids will have disagreements over what should be fixed at the cottage, and when. How will they decide? Perhaps an annual budget should be agreed upon and used as necessary for repairs and maintenance.


How will major decisions be made?

Two of the most important decisions include whether and when to sell the cottage, and when to make major capital improvements. If the cottage is sold, how will the sale proceeds be shared? As touched on above, it's common for kids to have the right of first refusal to buy the cottage before a sale to a third party.

How will disagreements be resolved?

Be realistic and recognize that there will be disagreements. How will the kids resolve these? Will the majority rule? Let the kids figure this out in advance of any disagreements.

Finally, it's a good idea to document the answers to these questions so that everyone is on the same page.

Tim Cestnick is president of WaterStreet Family Offices and the author of several tax and personal finance books.

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About the Author
Author and founder of WaterStreet Family Offices

Tim Cestnick, FCPA, FCA, CPA(IL), CFP, TEP, is an author and founder of WaterStreet Family Offices. More


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