Here is an event recap from our most recent Collaborative Event held at Walny Legal Group by our Past President, Kelly Dancy.
On February 19, 2019, members of the Society of Financial Services Professionals gathered with members of the Financial Planners Associations (FPA), National Association of Insurance and Financial Advisors (NAIFA), and Collaborative Family Law Council of Wisconsin (CFLCW) to discuss “Saving the Family Cabin.” The case study posed the all too familiar question of how to manage the use and costs of maintaining a family cabin.
Many good questions and ideas arose, leading to the overall theme of developing a structure for current and future family members to abide by. Options included both the use of an LLC or Trust. Such structures can provide the groundwork for detailing the use of the property, maintenance, expenses, rentals, management, payment of taxes and restrictions on transfers. The agreement can also provide a mechanism for valuing the property, which is important should family members wish to divest of their interest or be bought out. Ideally, the children would receive the property within the wrapper of one of these structures from their parents, thereby eliminating the need for subsequent generations to agree on the management details. As the generations grow, the ability to agree on these terms decreases substantially.
The discussion also centered around whether keeping a family cottage was a good financial investment for clients, particularly given the complexity involved in managing the property and the family dynamics and conflicts that can arise. Therefore, a thoughtful discussion should be had with the clients about their long-term financial goals and how a family property can be incorporated cohesively into the plan. If retaining the property, clients should meet with an attorney who can draw up the necessary paperwork to ensure a proper structure is in place for future generations to enjoy the property.