To some it’s a source of family harmony. To others, however, it’s a source of great family division, anger, and strife. Yes, it’s the old family cottage or vacation property or compound or camp or call it what you will. And now with summer coming to a close, many Americans are trying to figure out what to do with their piece of heaven on earth.
 
Should they sell the property that has produced fond memories of times spent with loved ones? Or should they give it to their children? Or should they do something entirely different?

Andrew Lee, a lawyer with Schaden Katzman Lampert & McClune in Bloomfield, CO says families should deal with the issues in four steps.

1. Have a heart to heart. The first step is a sit-down between the family cottage owners – the parents usually – and their children. “It’s best to talk about it ahead of time,” he says. Otherwise, it can be a huge mess.

2. Transfer the property. Getting a handle on whether and who wants the cottage is one piece of the puzzle.

3. Create an LLC. Figuring out what “legal entity” should hold the family cottage must also be addressed, says Lee.

4. Draft an operating agreement. No matter how the family cottage is owned, Lee says it’s crucial that there is an “entity agreement” in place that becomes the law of the land.

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