1.  Avoid Probate.  

Property left in your name at death must go through the probate process to pass to your family. This is a process that can take many months and cost thousands of dollars. It also allows for claims and litigation. You could avoid probate by signing a deed making your beneficiaries joint owners while you are alive. That’s almost always a mistake.  This would result in a loss of a step-up in capital gain cost basis - which, with escalating property values, could cost your family far more than even the cost of probate. There are many hidden problems associated with putting someone else’s name on the deed.  A Vacation Home Trust avoids probate and the negative consequences of using a simple quit claim deed.

 

2. Your Kids’ Personal Problems. 

Divorce – half of all marriages end up in divorce. Bankruptcy. Kids who don’t get along. A child with a disability or special needs (owning a home could disqualify them for valuable government benefits). A child with addiction challenges. These are quite common family issues for most people. Do you really want your ex-daughter or son-in-law to get a share of your family home in a divorce? 

 

3. Protection from Nursing Homes. 

One of three people end up needing care in retirement facility at some point in their lives. In 2024, the average monthly cost of nursing care is about $12,000.  A prolonged stay in a nursing home can quickly erase a lifetime of savings. While your primary residence is currently protected from long term care costs in Pennsylvania, a second property is not. It must be sold to help pay for these costs if you seek government assistance for your care. A Vacation Home Trust is designed to protect against this scenario. Property in the Vacation Home Trust is not countable against nursing home costs, provided it is completed sufficiently in advance of this need.

 

4. Avoids Family Conflict.

While you’re here, it’s your house, your rules.  That doesn’t have to end when you’re gone.  If your goal is to leave your cabin to your kids, they are going to need a rule book. If not, conflicts can begin as soon as you are gone. What if two families want to use the cabin Labor Day weekend? What if one won’t pay their share of the taxes, insurance and maintenance costs? Who is going to decide if the roof needs to be fixed? What if one child wants to sell their share because they need money? What if one of them drives off with the boat and won’t tell anyone where it is? Won’t happen in your family?  Think again.  We’ve been called upon to help families with every one of these problems and getting attorneys involved is expensive.  Solving problems after the fact is always expensive.  Planning for them in advance will not only save your family from unnecessary conflict but also unnecessary expenses.