What to do with the family vacation home

Those sunny days at the beach house. Kids playing in the surf, hot dogs, fun and family. Vacation homes are increasingly popular with families, according to investmentnews.com. According to the National Association of Realtors, a record 1.1 million vacation properties were sold in 2014, up 57 percent from 2013.

But what happens to that home when the kids grow up? Surprisingly, it can be a challenge.
Grown-up kids may not want the vacation home, even though it was a great part of their childhood. After all, ownership implies maintenance, taxes, utilities.

The simplest solution, in this case, is for the parents to sell the home, leaving memories for the family photo album.

If the kids do want the home, the issue becomes a little more thorny, according to Liz Skinner, an investment business advisor.

Homeowners should discuss the issue with potential heirs:

1 Who will manage the property and scheduling?
2 How much will each heir be expected to contribute in money and time?
3 What if one wants out?

If all issues can be resolved, joint ownership is the simplest resolution. But the success of this method depends on siblings cooperating with each other.

One option is to transfer ownership to a trust or limited liability company. States differ on tax assessments between LLCs and trusts, so check with an attorney.

Parents can also set aside funds to maintain the property for some period after their death. In this case, they should specify how the property will be divided at a later sale.