The End of Summer Already?

glasses sea sand

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.

Related articles

Episode 29: Becoming A Great A Client Takes A Little More You Might Expect

Becoming a good client requires a great advisor. The importance of having sound advice and taking it. Savers vs. spenders and what it can mean to the future of your plan. The importance of goal setting and finally muffins are they really where it’s a…

Read More →

Episode 33: Technology: Making Us Way Better At What We Do!

Technology has had a huge impact on financial services. Market efficiencies are translating to enormous benefits for clients. Listen here today for more insights in part 2 of our debrief of DFA’s Charlotte, NC conference.

Read More →

Retirement is Shorter Than You Think

In this episode of Think Smart with TMFG, your hosts, Senior Financial Advisors Rob McClelland and Mike Connon from Assante Capital Management Ltd., dive into the issue of how long retirement could last depending on the age you retire, referencing a …

Read More →

Financial Planning Advice from Canada's Top Financial Advisors

Sign Up To Receive Email Updates On The Financial Industry And Complimentary Workshops.

By providing your e-mail address you provide The McClelland Financial Group of Assante Capital Management Ltd. with your express consent to send you electronic communications. If you choose to discontinue receiving e-mails, you may withdraw consent by contacting [email protected].

FREE RESOURCE

Get actionable financial insights from the Top financial planners in Toronto.

Toronto's Top Financial Advisors
Copyright Assante Wealth Management. © 2022

Disclaimer | Assante advisory services are offered through Assante Capital Management Ltd. Assante Capital Management Ltd. is a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. The services described may not be applicable or available with respect to all clients. Services and products may be provided by an Assante advisor or through affiliated or non-affiliated third parties. Some services and products may not be available through all Assante advisors. Services may change without notice. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

We have a team of advisors each specializing in varying portfolio sizes. Please let us know the approx. amount of your investable assets to help us to direct you to the advisor that is best suited to you.