01/23/2019
Summer is here and the family is going down to the Family Vacation House. This is a great time to get out in the sunshine, see your family members, and have a great time on the beach, in the ocean, at the lake, or wherever it is that you may go. But it can also be a time when the closeness of family also leads to other problems, scheduling conflicts, who pays for the house, who fixes the leaky faucets and other repairs, varying definitions of important concepts like “cleanliness”, “friends”, “sharing”.
Our experience, and that of our clients, has been that the summer home can be the source of great family unity. As a resident of a North Jersey suburb, I have found that the suburban home is not the one that attracts the family; it is the Summer Home.
As you may know, my clients are the source for many of my best ideas. I want to know what your Family did correctly or incorrectly in regard to your Summer Home. All comments are welcome!
What can the family do to make the Summer Home an enjoyable experience for all? …And a positive force for family unity and prosperity?
The following are some of the successes, maybe we will even call them “Best Practices”, that families have done to make the Summer Home an enjoyable experience. We will also have some of the pitfalls, we will call them “Worst Practices”, to avoid. We are aware that a “Best Practice” for one Family may be a “Worst Practice” for another!
Many families have had the family matriarch and patriarch buy the house, pay for it, and that continues and works out just fine, especially for the second generation! The second generation starts to have their own children and the house fills up. This creates the problem of scheduling. Who is going to go to the house at different times, how many family members can they bring, can the grandchildren bring friends? Suddenly, the house can start to get to be too small. If the house is large enough to contain all who come, that is a blessing, but it is not usual. If the matriarch and patriarch can pay for the house throughout this entire process, that works best. But at some point the house must be maintained and the duties for the maintenance will pass to the next generation…Now we have two potential areas for conflict – scheduling and finances.
When the parents die, there can be significant conflict among the next generation regarding finances and scheduling. In the Best Practices category, family members who want to be bought out of the house, typically because they’re not using it, or cannot afford it, should be allowed to sell their share to the other family members. Of course, the selling Family member wants full price while creating new financial burdens on the buying Family member. Potential conflict there!
We have seen with various families, it is very difficult to maintain the Family Home when the parents die. From a practical point of view, we don’t live with our brothers and sisters and their families year-round. Why should we expect to go on vacation with them for any extended period of time?
Several client families have had great success discussing how to handle the Family Vacation Home in advance. They may have concluded that when the parents die, the default position is going to be to put the Summer House on the market for sale. Certainly, the strategy is to allow conflict-free exit from the Family House. A “Best Practice” might turn out to be that if a family member cannot be bought out, because the other family members don’t have the finances, then that is a signal that it is time to buy out all and sell the house. All family members might agree in advance. Since most vacation homes are in towns or areas where there are other homes for purchase, the proceeds from the buyout of the main Family Home can be used to subsidize, or even purchase, a few homes in the area.
If the money to support the house is the issue, then an alternative family strategy could be to endow the house, the family vacation location, with separate funding to support the house. To expand this idea further, the separate funding could be used to maintain the home, and might even be used to pay for family meetings and transportation to and from the family vacation location. The separate funding could even be a bank of sorts to allow for transactions between family members.
Have you had some strategy work (or not work) with your Family’s Vacation Home? Please let me know. You may forward this email to any of your Family Members or Friends who are involved with a Family Vacation Home. We would like to be a resource to keep a Family Vacation Program going – Your Grandchildren are counting on us!
Regards,
Jim Vaughan
