By Paul and David Karofsky
July 2010
In general, we discourage families from leaving their homes to multiple children as it can often lead to family conflict, write Paul and David Karofsky.
For example, we worked with three generations of a family that had a couple of vacation homes. The senior generation grandparents had a waterfront home and the middle generation parents had their own waterfront home nearby. Knowing that their children did not need another home, and seeking a tax effective strategy, the grandparents decided to leave their home directly to their grandchildren – three women in their 30s.
The three sisters had a wonderful sibling relationship but this all changed when the grandparents died. While one sister wanted to live in the house, another wanted to fix it up and rent it out and the third wanted to sell it. To complicate matters, two of the sisters were recently married and no one had adequate personal financial means to fix it up, maintain it or purchase it.
The consequence: abundant conflict ensued. Additionally, the parents, who were still in control of their family enterprise, refused to provide funding to resolve the issue until the siblings could reach agreement. The result: stalemate.
Another client family who frequently vacationed with their elderly widowed father at his mountain retreat ended up arguing about when to go and who should maintain the property. Add to this the grandchildren who would often return late only to disrupt grandpa from his sleep, or the fact that two of the sibling families had dogs but another family had children with allergies. The result: the fur flew.
A third family client with a vacation home had a son-in-law with obsessive compulsive disorder who was constantly cleaning up the kitchen and moving things around as others were trying to prepare meals. The elderly grandmother could never find things where she left them and thought she was becoming senile. Quarreling among the spouses and siblings was the norm. The result: all endured it so they could take advantage of the free lodging and proximity to the ocean.
If you are determined to leave a property to more than one person, we encourage families to meet together to create a document of Family Vacation House Rules. They might include the following:
1. The first issue to address is “whose home is it?” If it’s truly the property of the senior generation, and unless they’ve abdicated decision making to the next generation, shouldn’t they be part of the discussion? And what about the youngest generation? Perhaps they should also have a voice in these matters. There needs to be a structure for decision making and limits of authority.
2. The family should reach agreement on dates of usage, including exceptions for special events. Planning well in advance might be important to all.
3. Property care needs to be addressed, including routine housecleaning, linen changes, use and maintenance of recreational vehicles, repairs and maintenance and capital improvements.
4. How will the property care, taxes and insurance be funded? Who will oversee it?
5. Who is responsible for the seasonal opening and closing of the home?
6. What about pets? What about their waste disposal?
7. Are family members allowed to bring guests? Is there a limit on the number? Is there is an age requirement before unmarried couples can share a room?
8. What about boundaries? Are there rooms in the home that are off-limits? Must shoes be removed? Can feet go up on the furniture? Is eating allowed in the living room?
There is no greater joy than spending time with loved ones in peace and harmony and many family members think it should just be automatic and not require attention, effort and care. However, our experience shows that families who gather in a family meeting to talk out individual concerns and reach agreement on guidelines have a far better chance of achieving that joy.
