Your Money: Sharing
family getaways without any cottage conflicts
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[June 29, 2017]
By Chris Taylor
NEW YORK(Reuters) - Picture it: 40 picturesque acres nestled
in Wisconsin lake country.
That is the ideal getaway the grandfather of Chicago financial planner
Tim Obendorf's wife built around 50 years ago. Then the property passed
to the next generation, with ownership shared by four people.
Now they are thinking about the next generation: 11 potential owners.
Without the right planning, that paradise could turn into hell.
As brothers, sisters, parents, aunts, uncles, cousins and grandparents
gather this summer at family homes to go hiking, canoeing or swimming,
there will also be arguments over schedules, property taxes or mortgage
costs, and upkeep duties, along with the thousand other matters that
come with shared homeownership.
"Whenever a number of families are under the same roof, conflicts are
going to arise," said Jill Shipley, managing director of family dynamics
for Abbot Downing, a division of Wells Fargo that handles high-net-worth
families and foundations.
That is why Obendorf's family has already logged a couple of family
meetings. "It's never going to be perfect, but you have to decide you
value the place, more than the hassles of working through family
issues," said Obendorf.
It is not surprising that vacation homes have become a point of
contention. Many vacation homeowners are baby boomers: They possess the
bulk of the nation's assets and are projected to hold over 50 percent by
2020, according to a study by the Deloitte Center for Financial
Services. They are now beginning to retire as they hit their 60s and
The potential problems are plentiful: Is the place big enough for
everybody? Who gets it on July 4th weekend? Do they split costs equally?
Who cleans up, handles repairs, or stocks the fridge?
And the big one: When the owners eventually pass on - who gets the
How can families get the most out of shared vacation properties this
summer, without either going broke or killing each other? Some tips from
* Draw up a calendar.
Just like season tickets for a sports team, some dates will be in high
demand. So if the property is not big enough to handle multiple families
at once - or, let's face it, you just do not get along - pick your
spots. "Establish a rotating lottery each year, and allow each family
member to pick their respective dates," suggests Kevin Reardon, a
financial planner in Pewaukee, Wisconsin.
[to top of second column]
Tourists leap into the air for a souvenir picture as the sun sets
over Waikiki Beach in Honolulu, Hawaii, January 1, 2012.
* Write down a policy.
Everyone has different opinions of what a getaway should be, so hash it out and
put it all down on paper. One key item: Whether ongoing costs like property
taxes, homeowner's association dues and repairs are split equally, or allocated
based on usage.
* Create an opt-out.
A sure way to guarantee family resentment: One member being forced into an
arrangement they do not want. If a family cottage is being passed to the next
generation, allow an escape hatch that permits one member's share to be bought
out by their siblings. After all, not everyone might be able to use the property
to the same extent, especially if they have moved far away.
* Bring in a pro.
Siblings, of course, do not always get along. In fact, 15 percent of adult
siblings report arguing over money, according to a new survey from Ameriprise
Financial (http://bit.ly/2sNIa90). To make sure everyone is heard, bringing in a
trained facilitator is probably your best bet, advises Shipley.
* Have the discussion now.
"I have been in many family meetings where the kids ask, 'I wonder what mom and
dad would have wanted?'" says Shipley. So if you are fortunate enough that the
family matriarch and patriarch are still around, arrange a family meeting and
find out what they envision for the property in the decades to come.
Maybe they want it to stay in the family, as a legacy for the grandkids. Or
maybe, because of family circumstances like far-flung siblings, it would be
wiser to just sell the property and split the proceeds.
*Set up a trust.
One way to take future financial squabbles out of the equation altogether: If
families have the resources, they should create a trust to "fund the maintenance
and ongoing use of the property in perpetuity," says Shipley. "That is one
solution to reduce conflict, and keep the property in the family for
(The writer is a Reuters contributor. The opinions expressed are his own.)
(Editing by Beth Pinsker, Lauren Young and Dan Grebler)
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