Cottage Trust – Is this the answer for your family? Part 4
First: Family Meeting
While you may think this is a great idea, the best practice is to gather the family for a meeting and discuss the concept. Find out how many children are interested in keeping the cottage.
If there is interest, then begin to examine all of the “problem” areas. Have the children discuss how they would administer the use of the cottage. Are they willing to commit their time to its upkeep? Their money for its care?
Next: Draft the Use Agreement
Can they draft up a set of rules upon which they can agree for the use of the cottage. If they cannot agree on the rule, it is a sure bet that they will not be able to use the cottage without it becoming a source of anger and discontentment instead of a joy.
If they are able to work through the issues previously set forth, then it is time to set the agreement in writing – have them all sign it.
Last: Amend your Estate Plan
Now it is time to incorporate the cottage plan into your estate plan. Have your trust direct the trustee to distribute the cottage to an LLC at the time of your death and to have the signed agreement for its use be a part of the Organizational Agreement.
This will not be a quick process. It will take the children time to decide what they can live with and what they cannot. There will be (hopefully) minor disagreements which cannot be avoided. Remember that you are still here to help mediate these disputes and bring them together for the common good.