Going, Going, Gone!

Tax-free transfers – gifting – of the family cottage to future generations via a cottage succession plan is a great opportunity for cottage owners to enjoy considerable tax savings while real estate values are suppressed.

U.S. taxpayers are experiencing a “perfect storm” of opportunity to make tax-free transfers (gifts) of assets such as family businesses, real estate and other wealth from one generation to the next. The gift tax was first enacted in 1932 by the federal government. Over the coming months, we all have what may be the best opportunity since 1932 to gift family assets without a gift tax now and to avoid significant estate taxes later.

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Succession Planning for Vacation Property
Steps for Cottage Sharing
With summer here, many families will be enjoying their family cottages during the span of summer’s endless sunshine defining the lazy days of summer at the family cottage.

This is how summers have always been. You enjoy the laughter of denials and finger-pointing about who created the latest mysterious heap of sandy wet towels on the cottage porch floor. The children stand shivering from their latest dip in the lake and you silently wager bets against how long it will take for the lake water drops hanging from ends of clumped wet bangs to land on the table.

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They say, “beauty is in the eye of the beholder.” That’s especially true when applied to the family cottage. Whether the family cottage is a small rustic cabin on a pristine lake or stream, a luxurious retirement home on one of the Great Lakes or ocean shore, or a family retreat in some stunning mountain region, it’s not “economic value” that is the most important factor in keeping the family cottage, it’s the “emotional value.”

Some would argue that a place is just a place but the people make it special. When it comes to the family cottage, it can be argued “the place” is special, sometimes almost magical, and can transform those who spend time in that place from stressed out, overworked adults back to their carefree days as a child; skipping rocks on the water, swimming off the dock, nursing a sunburn and eating s’mores by the campfire. For most, the family cottage creates a place for memories and traditions to be formed and a safe haven to retreat to for rest, reflection and reminiscing later in life. The family cottage is a constant in an ever-changing world. It’s where experiences can be shared and passed on to the next generation in their purest form.

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The Mouse Adventure with The Cottage Cat “Spike” at The Depot

We became owners of a fluffy 20 pound orange and white barn cat name Spike. Spike lives in The Depot- the northern Michigan offices of The Penning Group, and formerly the law offices of Stuart J. Hollander, attorney author of “Saving the Family Cottage – A Guide to Succession Planning for your Cottages, Cabin, Camp or Vacation Home.”

Spike loves to wander around the office and visit the desk of cottage law attorney Dan Penning. He tries to grab a snack of a muffin and just sprawl on Dan’s desk top. He loves to lounge underneath the potbellied stove in the cooler winter months. He gets so close that my husband thought he might catch on fire. With all that fur, how could he possibly be anything but cold. He enjoys greeting clients when they come in and he truly does like to ‘meow’ to say hello. Spike wags his tail out of love. He struts around like he owns the place. I wonder if he isn’t part Ragdoll?

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The Detroit Free Press just ran a section on the Top Workplaces ‘10. In this article 41,000 workers spoke about the top states workplaces. Employees basically stated that 6 reasons really made a difference in the workplace. They were rated on importance factors.

The first being direction.
75% believed that organization and direction in the workplace was a key factor to the work place. They approved of the strong values and ethics.

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The family cottage sets in motion vacations to remember. At the family cottage you relax, unwind and nurture yourself. It is a wonderment and an oasis of peace on the water’s edge. It doesn’t matter how you spend your day off from work or household chores. Enjoy nature whether you bike, boat, hike, or simply take a swim. My teens and my husband Dan enjoy swinging a club or two at the golf course. Even if you enjoy watching the world go by, it is just fine.

The best memories at the family cottage are the incredible family stories, whether you believe them or not. We vacationed at the “big lake” as my kids used to call Lake Michigan. My husband and I had a wonderful bonfire with our boys and family friends who stayed with us at the cottage on Good Harbor Bay. We all went to bed after saying our goodnight’s, but Dan decided to stay at the water’s edge with our yellow labs Bailey and Callie.

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Our summertime friends helped us celebrate Casey.

Conor and The Rose Lizard Club sign

Casey named this club the “Rose Lizards.” We made special friends at the family cottage. These friends are people you don’t see on a daily basis and sometimes they may be just summertime friends. I love these friendships, because you pick up where you left off and never skip a beat in conversation or in sharing a story or two.

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The family cottage is a fabulous place for new beginnings and perfect endings. August is National Picnic Month. There is no better way than celebrating with family and friends – birthdays or holidays – at the family cottage, than with a picnic. So pull out your blue and white checkered table cloth (or red and white checkered) and a wicker picnic basket.

I grew up with Yogi Bear and he loved pic-a-nics. To Yogi every day ended in a fabulous picnic filled with jelly sandwiches. (My teens do not even know who Yogi Bear was.)

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Summer began as usual at the family cottage. The dogs, our chocolate labs Jake and Ginger, and our two cats Max and Joey and the three teen boys plus a friend were all settled in for a glorious summer at the cottage.

A few days later we discovered that our pets were not the only critters at the summer cottage. We had a family of skunks living under the shed in the back of the family cottage. There were 5 skunks to be exact. A mother skunk who was not happy we had invaded her space and her 4 babies. I did not want her spraying the dogs. We had that happen before to our very first dog Baily, a yellow lab. It was awful -the smell smarts your eyes. I believe we used tomato juice and hydrogen peroxide to get rid of the smell. I absolutely did not want her spraying the boys.

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A cottage in northern Michigan is a way of life. It is a place with a purpose. It awakens the heart. There is passion and dreams at a cottage. There are water bays, beaches, bonfires, friends, family, pets, and vineyards with great wineries. A cottage is a feeling of peace. This becomes a beautiful place to be, especially when you don’t want to be anywhere else.

Cottage-law stands for:

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