When you sit down with your estate planning attorney to discuss your future plans, one of the primary issues that often pops up for many people has to do with their property.
Although you may have monetary assets that you wish to pass down to your loved ones, including those associated with a life insurance policy or a retirement account, many property owners are also thinking about the recreational or vacation properties they own. It can be a complicated decision to determine whether or not it is in your best interest to pass these down to children and when to do so in order to minimize the potential consequences as well as conflict.
Transferring any vacation or recreational property to a future generations requires a combination of appropriate estate and tax planning. Keeping the asset within the family can lead to the family recognizing capital gains taxes. Forcing the family to ultimately sell the property in the event that the children are unable to cover the high tax bill. One of the best ways to approach this subject is to create a trust for the property and protect the asset by transferring it into the trust.
This will defer the capital gains taxes for the beneficiaries until it is passed on in their own individual estate. To learn more about this option and the other property planning opportunities, consult with an experienced estate planning lawyer today.
