Vacation home planning

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If you own a vacation property, there are many issues to consider, especially when there is family involved.

Vacation home planning

If you own a vacation property, there are many issues to consider, especially when there is family involved. One issue that can often be a source of family conflict is how to pass along the vacation property to your children. By planning ahead, you can maintain family harmony, while potentially reducing taxes.

Here are some strategies to consider: 
  • Give the property to your children through an inter-vivos family trust to defer future capital gains tax and avoid probate tax.
  • Take out an insurance policy to cover capital gains taxes triggered by the disposition of the property when your estate is settled.
  • Create a co-ownership agreement establishing the ground rules when more than one child will own the property.