Handing down the cottage is a challenge facing many families in the South Georgian Bay area where many properties are secondary homes for their owners. Recently, I had the privilege of spending some time with Geoff Parker of Stonehaven Financial Group Inc. discussing some of the various issues surrounding succession planning for such properties. Geoff kindly agreed to share this information with my readers which will be presented as a four part series over the next month.
Before the tax and legal issues, there are the family wishes. Family members have different wants and needs. There is a distinct history for each and every family and not every family member can afford the expense of owning a cottage. This can lead to disagreements over usage, funding and the division of labour. However, there is an approach that can potentially minimize potential conflict and determine an equitable course of action.
It is recommended that families engage in a dialogue using what is often called a “Family Council”. A “Family Council” is simply a forum where all adult family members are given the opportunity to be heard in a safe, open environment. A “Family Council” can be used to discuss the cottage and the family as well as other family concerns including business/farm succession planning, estate planning and future care.
For families that do not believe they could have this dialogue on their own, a Family Meeting Facilitator can be hired. These are individuals who are trained to facilitate discussion. They act as the meeting chair, follow a predetermined agenda and keep minutes. Afterward they provide a report which summarizes the discussion and any decisions made. While facilitators do charge for their services, the cost tends to be minor when compared to cost of legal services for litigation.
The benefits to you and your family of setting up and using a “Family Council” are potentially significant. The discussion can lead to the development of a solution as a group. The solution may be one that you alone may not have even considered and there is likely to be greater buy-in.
Next week, we’ll look at some interesting options for ownership structures.
If you have any questions for Geoff about family councils or cottage succession planning, please feel free to email him at email@example.com or contact him via his website at www.geoffreyparker.ca. You can also catch him at the Fall Cottage Life Show November 26-28, 2010.
This article was prepared by Geoffrey Parker who is an Investment Advisor & Certified Financial Planner with Dundee Securities Corporation., a DundeeWealth Inc. Company. This is not an official publication of Dundee Securities Corporation and the author is not a Dundee Securities analyst. The views (including any recommendations) expressed in this article are those of the author alone, and they have not been approved by, and are not necessary those of Dundee Securities Corporation.
Marg Scheben-Edey is a Broker with RE/MAX four seasons realty limited, Brokerage in beautiful Collingwood, ON. With three decades of experience, Marg is a leader in the local real estate marketplace and is ready to help guide both Buyers and Sellers in achieving their real estate goals. Email Marg