The End of Summer Already?

The End of Summer Already?

What Cottage Owners May Want to Consider Sooner Rather than Later

The summer is coming to an end quicker than we would like.  And for many, that means closing down the cottage. For myself, and many of my clients, summers at the cottage are a break from the hustle and bustle of “city living”.  Having a place to retreat to in the warm months is just one of the many benefits of having a cottage in the family.

However, with benefits, come challenges as well.  And the most frequent challenge I hear about is what to do with the cottage before death.  Simply put, there is no right answer. Many situations are similar, but all family dynamics are different.  Coming up with a solution that benefits everyone equally is easier said than done.

Without giving specific advice, here are some things to consider when attempting to make this decision:

  • Tax implications
  • Loss of control
  • Exposure to creditors
  • Schedule family meeting

Tax Implications

Obvious issue.  Capital gains can occur upon the sale or change of ownership of a cottage. Depending on the purchase price (plus any improvements) and the fair market value, you could be looking at a significant tax liability.

Loss of Control

Whether planned or not, making one person (or many) joint owners of the property will reduce your ownership stake in the property and possibly any benefits of a sale.

Exposure to Creditors

The cottage now becomes an eligible asset for any of the joint owners’ creditors.

Family Meeting

To avoid issues arising with your heirs after your death (when you cannot explain your reasons), why not have a conversation with them while you still can.

Cottage decisions, especially in a larger family, can be very stressful.  We’ve seen it time and time again where clients avoid the topic because there is no right answer.  Speak with your TMFG advisor today to help lay out a plan or at least start the conversation.

Carlo Cansino,
FMA, FCSI, CFP
Senior Financial Advisor

The McClelland Financial Group
of Assante Capital Management Ltd.



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