Should A Cottage Trust Be the New Planning Tool of Choice for Michigan Cottage Succession Plans?
Now that the Michigan Legislature has modified certain aspects of the state’s rules on taxing real estate, including preventing reassessments of property being transferred among family members, planning with cottage trusts now should be considered as a planning tool in lieu of or addition to an LLC.
Solve Threats and Surprises Causing Problems For The Family Cottage
The solution to avoiding threats and surprises as well as providing a proper structure to implement cottage planning is through “indirect ownership”.
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.
PART 1 - Why leaving the family cottage to “All the children” is NOT a plan.
What many people don”t understand is that by leaving real estate to children or heirs as joint owners creates a legal status among the owners called a “tenancy in common”.
When the Family Cottage Is the Most Valuable Asset
People just don’t realize how emotional real estate is until they have to make the decision of what to do with it , especially heirs acquiring shared ownership after their parents’ death.