Ironing out the problems of leaving a home for future generations

Many people have a family home or holiday home they would like to keep in the family and pass down from generation to generation.

- 

It is a noble idea. But if it is not structured properly, it can easily lead to conflict, resentment and long-term family drama.

There are two key issues you need to manage if you do not want your home to be a source of family conflict. The first one is control (who gets to decide what happens to the house), and the second is liquidity (where the money comes from to transfer ownership and run the house).

Control

If your children inherit the property in equal shares, you have in effect created a small property partnership, but without a partnership agreement. This is where problems often begin:

• Who gets to live there?

• Who pays the insurance?

• Who pays for maintenance and repairs?

• What happens if one sibling emigrates, divorces, or has a cash crisis?

Before you even look at legal structures, it is important to carefully consider the practical rules you want in place:

• Who is meant to use the house (one child, all children, grandchildren)?

• Is it a primary residence or a family holiday home?

• How long do you want it kept (10 years, until grandchildren reach a certain age, or as long as possible)?

• Who will pay the monthly and annual costs?