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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Every time I watch an English movie or see a program set in England I can’t help but notice beautiful English country estates. As an attorney I look at the lavish estates and think about the right to partition and how our real estate laws are based on 600 year old laws. What does this have to do with your family cottage? Plenty. Our current real estate laws put your family cottage at risk. Why? Simply because real estate law does not promote keeping the family cottage in the family for multiple generations. It involves how the cottage is owned. Direct ownership and indirect ownership is what makes the difference. Cottage Succession Planning provides a solution to someone being able to invoke a Right to Partition. Read more about family cottage risks on our website at http://www.cottage-law.com/cottage-risks.html

Dan A. Penning

As the world grows smaller thanks to technology, The Penning Group finds itself with clients and friends literally across the globe. We welcome new friends and new opportunities, but we still trace our values, like our roots, to the Michigan communities we call home. Like many of you, we are grateful for opportunities to give back when and where we can.

Leelanau Conservancy Annual Picnic and Auction
In Suttons Bay we are supporting and serving as a sponsor of the Leelanau Conservancy’s 2011 Picnic and Auction. The Conservancy’s Annual Picnic and Auction will be held Thursday, August 4, 2011. Over 700 people attended the 2010 auction and over $100,000 was raised to help the Leelanau Conservancy in its mission to conserve the land, water and scenic character of Leelanau County. If your schedule permits, attend the picnic, donate an item, make a bid online or in person and volunteer to make this annual event a success.

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It doesn’t matter what time of day you arrive, everything always looks the same. Granted, the trees are taller and wildflowers seem to be growing everywhere. But your family cottage is the same to you today as it’s always been.

Cubby holes filled with trinkets and treasures
While waving hello to neighboring friends you realize every family cottage and summer home is as different as the memories gathered by families every summer. Each cottage has a special cubby hole filled with trinkets and treasures from sandy beaches and hiking adventures through surrounding woods. Weathered hinges guarantee screen doors will squeak open and slam shut right on cue announcing that this is summer. It’s easy to get caught up in the moment of racing down to the lake and assuming every summer will be just like the last.

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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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Most people would think “economic value” is the most important factor to protect the family cottage. Common “emotional value” has proven time and time again as the most important motivation behind developing a cottage succession plan to protect the family cottage.

Yes, it’s true when they say, “beauty is in the eye of the beholder,” and it’s especially true when thinking of the family cottage. Whether the family cottage is a family retreat in some stunning mountain region, or a luxurious custom built retirement home on one of the Great Lakes touching Michigan, Illinois, Wisconsin, New York, Ohio, Indiana or even Canada, or a small rustic cabin on a pristine lake or stream, it’s not “economic value” that is the most important factor to protect the family cottage, it’s the “emotional value.”

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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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Budget Proposal Includes Anticipated Proposals to Change Both Tax and Spending Policies

Michigan Governor Rick Snyder called the consideration of his proposed Executive Budget a “defining moment” for the state this week as the Executive Budget was submitted to state legislators for the 2011-2012 fiscal year. Snyder commented on his budget as an opportunity to “stop living in the past and start looking to the future.”

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While the changes are mainly technical in nature, some are substantive and worth noting. Changes to the Michigan Limited Liability Company Act (“LLCA”) took effect on December 16, 2010.

The LLCA now: Read the rest of this entry »

Repeat after me I feel fabulous, I feel fabulous! I am terrific! I am terrific! There- I just powered you up for the day. Better yet get in front of that mirror and say it ten times over. Your family will think you are weird and your spouse might think you lost it but that’s ok- you’re doing this to increase your creativity and get excited about your day and your future. Now I want to challenge you to get up every day and look in that bathroom mirror and say hello you good looking thing you. You may get a good laugh but you are beautiful and you have great gifts to offer this world. So go with the positive side of life. See yourself with that victory. Every one of us has gifts and talents to soar to a new level. Get rid of that negative mindset. This is not part of your vision- besides it will only bring you down and others around you down. Take good care of yourself. Author Debbie Mandel in her book “Addicted to Stress: A Woman’s 7 Step Program to Reclaim Joy and Spontaneity In Life” says that people need to keep themselves in balance by making good choices with a healthy diet and exercise. ” Something as simple as walking will help.” Make sure you get plenty of sleep and if you are in a bad mood, call someone who isn’t. Instead of bringing others down, let someone lift you up. Download some uplifting music and by all means dance- it will lift your soul. Your friends may think you are strange but you just keep that positive spirit going. Who knows you may show up on YouTube as a dancing sensation. If you have never watched the “Ellen Show” take a few moments. She is always dancing and her merriment puts a spring in your step. Debbie Mandel also states to “Activate your sense of humor. We all take ourselves too seriously. Our friend Tommy is always having a good time, I can hear his laughter even when he is not around. Find someone like this who will get you laughing, and put joy back into your step. Marla Sloane, Ph.D.’s positive affirmation tip states “Happiness doesn’t mean everything is perfect, it means I look beyond the imperfections.” Nobody’s life is perfect and yes we all have those disappointments and down and out times. It is what you do with them, and your your reactions to them that counts. Find hope and joy. Quincy Jones, who is 77 years old, tells USA Today that music is culture’s most essential art. He states that his dream is to see hip-hop some how incorporated into education. “It’s the only one that engages the left and right brain simultaneously, the motion and intellect. “it’s the voice of God.” How amazingly well put. Jones just released “Q:Soul Bossa Nostra,” a sound track disc featuring A-list stars interpreting songs. I wonder what the world would be like if we all found music we enjoyed and turned that TV off. Right now Casey is singing to that song “All the Right Moves” by One Republic. He truly was blessed with a gift of song. He has great talent and he is healing his left and right brain by engaging in emotion and intellect. When you sing there is no stress. Music lifts your soul!

Bananas are a serous fat-burner. They have potassium and B vitamins. Enjoy that easy portable fruit. It comes already in its own protective skin. We keep this as a snack to go at the family cottage. Try a Conor favorite- one of our teens; a peanut butter sandwich with banana. It will give you the fuel you need to get all those to-do-list chores done. A great cancer fighting drink for this time of year is hot cocoa. This chocolate drink has more phenols and flavonoids than a glass of red wine and 1 cup of green tea. So say hello to hot coco! Chocolate is rich in antioxidants. Drink up for your health. Just one cup of hot coco has less than 1 gram of saturated fat! Remember to find the positives in life. Don’t feel bad about gossiping. In a British study (you have to love those British studies) gossiping makes you feel supported. They also discovered that whispering good things can boost yourself esteem. For example “she looks fantastic.” Don’t forget everything in moderation- you don’t want to be known as the town gossip. Stay hydrated with plenty of H20- drier air can lead to dehydration so don’t forget to stay sipping. Keep on believing in yourself and stay fantastic at the family cottage.

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