Written on April 23, 2013 – 7:53 am | by Corina Weigl
In my last blog I hopefully set the stage for blogs to follow. In that blog I referred to the fact that when planning for the cottage property client’s objectives often conflict with one another. Here I plan on laying out the typical objectives.
It’s worth stating at the outset, that achieving one objective will likely mean not fulfilling another. The overriding message with cottage planning is this – compromise is inevitable.
So what do we all hope to achieve when planning for that ubiquitous of assets.
Top of the list is often the message – we want to “keep it in the family”.
Whatever plan is adopted, we want to pay as little as possible in the form of taxes and other costs.
We want to avoid conflict within our family, often not appreciating that keeping the cottage may be the very catalyst for that conflict.
We want to ensure the cottage doesn’t end up in the hands of outsiders, particularly the in-laws who, notwithstanding their sweat equity or familial relationship to the grandkids, are outsiders when it comes to the cottage.
We want to be fair, even though fairness does not always mean being equal.
Most importantly, we want to operate on the “KISS” principle. This typically is a euphemism for we don’t want to spend any money, time or effort in the process of developing a plan, particularly if the effort involves difficult conversations.
We often want to achieve all of these objectives even in the face of issues we know exist. For example, we have kids from two marriages, some of whom are young while others are settled. Our kids live all over the country and they have different financial means. The spouses of our kids don’t necessarily enjoy the cottage or even get along with one another. The place isn’t big enough for everyone to be there together. Our kids can’t even agree on what to do for your 65th birthday yet you expect them to agree on all matters related to the cottage.
Taking the blinders off and spending the time to think about where the compromises will be needed in fulfilling your and your children’s objectives because, yes their goals are relevant to the planning exercise, will go a long way to minimizing conflict and the “real” costs that will result from such conflict.
Stay tuned for more blogs on the family cottage.