Financial: Planning Considerations if You Own a Second Property

Many people have acquired a second property to enjoy with their family. As a primary piece of recreational property, the family cottage, chalet or cabin is often a retreat from a busy schedule. As such, the thought of cottage succession may be far from your mind.

However, if you intend to keep this property in the family, there are some important estate planning steps you may need to take.

Prior to 1982, each spouse could own a separate property and designate it as his or her principal residence. Since the loss of this provision, families have had to look for ways to pass on a property in a tax-efficient manner. Making decisions about your recreational property now as part of your estate plan can help transition this important real estate to the next generation while minimizing taxes.

Every situation is different and you will be wise to work with a professional who can tailor a solution that takes your entire financial situation into consideration. A professional will assess a number of specialized strategies such as:

Selling the cottage to a family member
Gifting the cottage during your lifetime
Gifting the cottage and retaining a life interest
and more ...

Having a plan in place for your recreation property will help make for a smooth transition and allow you to enjoy it fully with your family now. At Scotia Private Client Group, our estate planning professionals have over a century of experience with the important but complex issue of cottage succession. Visit Scotia Private Client Group for more details.

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