One of the wonderful things about Maine’s unique outdoor culture is the long tradition of the family camp. For many families, these cherished properties serve as a lodestone, bringing generations together and keeping them connected long after the kids have left home and even started their own families. Many people with family camps envision their kids and grandkids using the camp for generations. But without proper planning, there is a risk that these properties can present burdensome expenses or, in some cases, do more to divide family members than to unite them.
The good news is that establishing a plan for a family camp is usually straightforward and cost efficient. Below are some of the questions that should be considered in thinking through an appropriate camp legacy plan and determining the proper vehicle for executing the plan:
· Who is entitled to use the property, and how are decisions about use to be made?
· Who will be responsible for paying for carrying costs (taxes, insurance, and debt service), maintenance, and repairs?
· How will decisions around capital improvements be made?
· Can the property be rented, and if so how is rental income to be treated and/or distributed among owners?
· Can owners sell their interest to non-family members?
· Can the property be used to secure debt?
· Can spouses share an ownership interest?
· What happens when an owner dies?
This is a very abbreviated list of considerations, and each question will undoubtedly spawn more. What legal tool (e.g., a trust, llc, family partnership) is right for your particular circumstances will depend on a variety of factors, and we can provide guidance on that decision. The key – as with so much of succession planning – is to have a plan in place, to communicate regarding that plan with the beneficiaries, and to follow the plan with diligence. It is also worth noting, however, that it is not too late to implement a plan if you and others have received a property outright by inheritance. In either event, establishing a plan today will help ensure productive use for generations – a gift for which your grandchildren may be very grateful.