Catching the LOL Momentum (LOL stands for Laugh Out Loud) while at the family cottage.

Laughter produces the natural feel good endorphins which help lower stress, benefits relaxation and sleep. It gives you a natural high. These laughing endorphins boost the immune system in the body. Laughter also helps lower blood pressure and may alleviate pain. Laughter is a great form of medicine. Everyone benefits from laughter. Families become stronger, friendships are better and marriages are deeper when laughter is put in the midst of daily life. Siblings can become best friends through laughter. The average child laughs 200 times in a day. The average adult laughs only 4 times a day. Laughter can boost your mood and help relieve anxiety and depression. A good belly laugh is highly recommended at least 3 times a day. It is good for your body and soul.

We have a friend named Tommy, who is an adult. He laughs every time you see him. He has more fun than any person I know. He probably will live to be 100 years old. Doctors prescribe for their patients to watch a humorous cartoon or sitcom daily.

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Their fond memories exuberate, like a family cottage, charm and comfort.

Leave a legacy of integrity and good will. Defining the family cottage means: joy, relaxation, summer skies that go on forever, walks along the beach, skipping stones, bonfires, children laughing, our chocolate and yellow labs running through the water, fireflies, good friends, serenity and peace.

Experiencing the cottage life brings you closer to the wonder of God’s beauty. You wish it would go on forever. We spent summers, it seems for a lifetime, in northern Michigan. Our twins, now 15, were two and our 18-year-old at the time was four. Since teens are very enduring and unique, I decided to ask them to define the word “cottage.” One of the twins responded with, “a house by a lake where you hang out on the beach.” The cottage, he stated, would be by a town with good places to go, and good people to see. The other twin described a cottage as nice, quiet and beautiful. He remembered swimming, tubing behind the boat, and our dogs running on the beach. Our 18-year-old described a cottage as something on the water.

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“As reported by the Detroit Free Press (see article below) there is unprecedented opportunity for those who have dreamed of owning a vacation home, cottage or cabin to make that dream come true.

After the purchase is completed, furniture moved in and the first family barbeque is voted a success – and cleaned up after, and your children and/or grandchildren are nursing their first sunburn of the summer season, what’s next?

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As weather in Michigan becomes warmer signaling the approach of summer, family cottage owners of waterfront property begin thinking about boats, docks, jet skis, etc. Every summer, unfortunate accidents occur which affect family cottage owners and their guests that are related to water and recreational activities: swimmers make a wrong judgment regarding the depth of the water and dive off the cottage dock into shallow water resulting in severe neck injuries, boaters and those driving personal watercraft can be blinded by the sun and fail to see someone skiing or tubing behind a boat resulting in a catastrophic accident, a “slip and fall” during a game of volleyball played on the beach or in shallow water can cause unexpected and long-lasting injuries.

In 1987 the Michigan Supreme Court consolidated two cases, one involving an individual who was injured while slipping on logs that property owners installed at the edge of a lake to prevent erosion. The resulting neck injury caused paralysis from the shoulders down. Three neighborhood associations and individual subdivision lot owners were sued for damages. The defendants included over 200 individuals. The other case involved a child who drowned while she and her mother were visiting relatives. The child died in the shallow part of a pond owned by her aunt and uncle. The Supreme Court determined that the cases could proceed to trial despite the protections afforded property owners in the Michigan Recreational Land Use Act (RUA). The Court determined that the RUA was only applicable to large, undeveloped tracts of land.

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The Michigan General Property Tax Act (the Act) requires real property in Michigan be assessed yearly and taxed at one-half (1/2) of its true cash value (true cash value is the same as market value). However, with the passage of the Headlee Amendment to the Michigan Constitution in 1994, limitations were placed on how much assessments and taxes could go up each year. Since 1994-1995, annual property tax increases have been “capped” at levels specified in the Act and remain capped until a “transfer of ownership” occurs. Once a transfer of ownership occurs, the property is reassessed at one-half (1/2) of the “true cash value” as of that date and the taxes, in most cases, go up substantially. The property tax is capped at the new, higher amount until the next transfer of ownership takes place (Michigan property tax bills show a “Taxable Value” and a “State Equalized Value.” The Taxable Value is the capped value upon which the property tax is assessed. The State Equalized Value approximates one-half (1/2) of the true cash value/market value of the property. Once the property tax is uncapped, the State Equalized Value and the Taxable Value become the same for the year in which the uncapping occurred and the cap goes back into effect at that amount).

The key term in all of this is “transfer of ownership,” which basically means a conveyance of title to, or a present interest in, real property. However, not all conveyances constitute a transfer of ownership. One such exclusion is for a transfer of ownership between two or more persons that creates or terminates a joint tenancy if
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How We Hold Title to Real Estate Ownership

There are two ways to hold title to real estate:

• directly, or
• indirectly

Direct Ownership
Real Estate Law governs the rights and duties of “direct owners”. The granting of these rights and how real estate laws impose duties on direct owners often surprise cottage owners. It’s real estate law surprises which put the family cottage at risk. Real estate laws of direct ownership do not promote keeping the cottage in the family for multiple generations, and the threat of partition and turmoil always exist.

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First Steps Cottage Succession Planning

First, ask your child, or children, if they want a share of the cottage. They may not want a share of the family cottage and there could be a variety of reasons. Each should be explored for passing on to them an alternative value of their share of the family cottage.

The best way to protect your family cottage is to move it away from the hazards of “direct ownership” being governed by real estate laws. We recommend moving the family cottage from direct ownership to “indirect ownership” and for a Limited Liability Company which is governed by Entity Laws rather than Real Estate Laws.

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Every kid should roast a marshmallow by a fire next to the lake, paddle a canoe, catch a fish, dive off a raft, skip stones and and eat an ice cream cone or a freshly made donut from a local food shack which opens every summer for cottage visitors.

Your Cottage Property Could be At Risk
Each summer is a chance to create family memories of good times all over again. You’ve spent a lifetime of summers at the family cottage. Your family memories live there and it’s the only place where laughter replaces ringing phones, the sun is your only clock, and keeping sand out of your shoes and picnic basket is the challenge of the day.

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