Cottage Succession

Keeping the 'Family' in the Family Cottage 

Cottage Succession Workshop Series

FOCA has organized 4 Cottage Succession workshops throughout the Kawartha/Haliburton region during the summer of 2010. The workshops offer information and guidance to waterfront landowners who are planning on passing their cottage down to their children or family members. The feature presentation is by Peter Lillico, Estate Lawyer, author and Cottage Life writer and the event is sponsored by Christopher Mihalic, a Sun Life Financial Advisor and Cottage Succession Planner.

The workshop dates and locations are as follows:

July 10, 10 - 11:30am- Pinestone Inn & Country Club, Haliburton

August 14, 10 - 11:30am- Apsley Legion, Apsley

August 21, 10 - 11:30am- Upper Stoney Lake, Sunset Pavilion, Crowes Landing

August 28, 10 - 11:30am- Cavendish Community Centre, Catchacoma

The workshops are free, however donations to FOCA are welcome. If you are interested in attending one of these events please RSVP to the Programs Coordinator at programs@foca.on.ca.

If you think a cottage succession workshop would be well received in your cottage community please contact the FOCA Programs Coordinator at programs@foca.on.ca to discuss future possibilities.

 
Peter Lillico is pictured above during his presentation at the Cottage Succession workshop in Haliburton on July 10th at the Pinestone Inn & Country Club. The workshop was attended by over 90 shoreline property owners who found the presentations by Peter Lillico, Estate Lawyer, and Christopher Mihalic, Sun Life Financial Advisor, to be very informative and helpful in their future planning.

Keeping the family property in the family is a common and important concern.

There are commonly three challenges to ensuring this can happen.

 Paying the Capital Gains Tax 

The first challenge in changing the ownership of a cottage is the capital gains tax. This must be paid when the cottage is sold or transferred, during the parents' lifetime or after their death. Although the federal government recently reduced the impact of this tax, it can still cost tens of thousands of dollars, and many families are forced to sell the cottage as a rest.

Keeping the Cottage Going 

The second challenge is working out how the children will agree to use and operate the cottage. Among the questions to be answered are: Can any child use the cottage any time, or will there be periods of exclusive use? Who will open and close the cottage? Who makes sure the bills are paid? Who decides if improvements or additions are to be made? When a son dies, does his share of the cottage pass to his wife or his children, or does ownership continue with the surviving siblings only. Without good answers to these questions, many cottages become a source of family strife, not pleasure.

Managing expenses  

The third challenge involves the children's financial status. Usually siblings have different financial resources and abilities. Expenses are inevitable, whether it's replacing the septic system, paying the municipal taxes or repairing the roof. If some of the kids can't afford to contribute their fair share, then friction and stress are also inevitable.

- With notes from Peter Lillico of Lillico Bazuk Kent Galloway Barristers and Solicitors. Peter's practice is concentrated in the areas of Estate Planning, Business and Corporate Law, and Real Estate.