Part 2 - Why leaving the family cottage “ To all the children” is not a plan.

In my last blog, I explained the fact that leaving real estate to a group of heirs creates ownership in real estate law known as “tenants in common”. I also explained some of the rules that apply to that type of ownership and how those rules usually in one way or another cause problems between the co-owners.

In this blog, I will identify the remaining rules that apply through co-ownership as tenants in common and how they are also oftentimes a problem.

Co-owners as tenants in common are not required to compensate a co-owner for services associated with taking care of the cottage. Similarly, co-owners are also not required to reimburse another co-owner who pays for improvements, repairs or expenses of the cottage life insurance and property taxes.

This often causes problems when one co-owner can’t afford to contribute toward payment of a cottage obligation or worse, simply refuses to pay causing a hardship on the other co-owners.

A co-owner as a tenant in common only owes a limited duty to his/her other co-owners. One example of this situation is where a co-owner tells the other co-owners he is taking care of the insurance for the cottage. In reality, the co-owner just insures his ownership percentage of interest. The cottage then burns down and then the other co-owners are uninsured and can;’t assert any claims against the insured co-owner.

The good news is that all of the problems that arise out of co-ownership of next generation heirs as tenants in common can be easily solved through an intentential and well thought out cottage plan.

I have assisted hundreds of families with cottage plans to avoid the types of unintended and problematic consequences that no planning can cause and ultimately force the family out of the family cottage. Let me help you with your cottage plan today.