According to the National Association of Home Builders, in 2018 there were approximately 7.5 million second homes, making up 5.5 percent of the total number of homes. These homes are not only real estate that must be planned for, managed, and maintained. They are also the birthplace of happy memories for you and your loved ones. Following are some important estate planning questions to consider to ensure that your place of happy memories is protected.
What Will Happen to the Property at Your Death?
The fate of your vacation property at your death largely depends on how it is currently owned. If you are the property’s sole owner or if you own it as a tenant in common with one or more other people, you need to decide what will happen to your interest in the property. If you own the property with another person as joint tenants with rights of survivorship or with a spouse as tenants by the entirety, your interest will automatically transfer to the remaining owner without court involvement. If a trust or limited liability company owns your vacation property, the entity will continue to own the property after your death. The trust instrument or operating agreement may lay out additional instructions about what will happen at your death.
What Do You Want to Happen to the Property at Your Death?