Thought Leadership

Family Vacation Home Succession Planning: A Discussion Guide

Click here to download Family Vacation Home Succession Planning: A Discussion Guide.

A family vacation home is meant for families to spend time together, create new memories, and watch their children, grandchildren, and possibly great grandchildren grow. The home may also be a wise investment. But for most families, it’s first and foremost a place for enjoyment. Yet as many families find out, the very space designed to serve as a family sanctuary can quickly become stressful as disagreements over the specifics of how it will be enjoyed arise. When first generation owners begin to create a succession plan for the home, these disagreements often intensify.

Vacation homes and other shared properties present a unique challenge for families looking to successfully transition the home from one generation to the next. Most inheritance items either don’t carry emotional value or are physical heirlooms, such as jewelry, furniture, or even cars, that can’t be divided among children or other family members. A family vacation home is a considerable asset that carries significant emotional value as well. It’s also one of the few assets that can be shared and used by multiple inheritors.

What’s more, the family vacation home virtually always incurs ongoing expenses, including taxes, maintenance, insurance, and mortgage costs. These expenses create additional complications for family members who may have different priorities and financial situations. What happens when one family member wants to renovate the kitchen, but another either doesn’t want to or doesn’t have the resources to do so?

In most families, first generation owners play a crucial role in setting up the framework for how the home will pass to subsequent generations.

There are many different techniques and ownership structures that may be appropriate for a family given the unique attributes of the property, current owners, value, tax basis, and goals. These structures often need to be flexible so they can be adjusted to meet the needs of future generations. Based upon these unique characteristics, Pitcairn works with clients and their advisors to make appropriate recommendations. While a structure may transfer ownership, what it does not do is create a comprehensive framework for how family members will use and share the property. It’s only a starting point. What families really need is an operating agreement that sets clear ground rules and expectations. This can only be achieved if the family can have a productive discussion and reach a consensus on key topics.

How Pitcairn can help

Since 1923, Pitcairn has worked with families to help maintain Wealth Momentum(TM) and ensure successful transfers of wealth and ideals from one generation to the next. We believe facilitating discussions and guiding difficult conversations are powerful tools to address both family and financial dynamics that can impact a family’s legacy.

Pitcairn helps families develop contracts, policies, and operating agreements for a variety of purposes ranging from investments, education, and governance to charitable giving. We developed this discussion guide to help families create a plan for the family vacation home. Pitcairn is proud to offer this resource for all to use.


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