Did you know? With a little planning, you can keep your cabin in the family, without fighting!

Are you worried about . . .

The first generation that buys a cabin enjoys it to the fullest and it's a magical place where happy memories are made and families go for some much needed respite. Unfortunately, without thoughtful planning, the chances of the cabin staying a place of happiness and tranquility into successive generations is very, very slim.

If you haven't done the planning in advance and made it legally binding, the family members (and their ex-spouses and new spouses) will have to work every detail out for themselves. If they can't, what is likely to happen is a lawsuit called an action for partition that forces everyone to sell their interest. This lawsuit is expensive, and the costs of litigation will come out of the proceeds of the sale of the cabin, so to add insult to injury to those who wanted to keep the cabin but couldn't afford to buy the others out, they are footing part of the legal bills in the lawsuit against them. Ouch! It's no wonder that family members stop speaking for years after the cabin conflict is "resolved."

You can't make family relationships perfect, but you can take away much of the fuel for the family conflict fire. That's what cabin planning does, and it has the nice side effect of giving you peace of mind now. 

Cabin planning is right for you if you don't want your kids or grandkids to:

  • fight over who gets to use the cabin, and when
  • fight over who should pay for taxes, maintenance, and expenses
  • fight over who gets to decide about decor and amenities
  • sell the cabin when some of them still want to use it
  • have the cabin be a source of resentment and hard feelings
  • stop speaking to each other because of conflict over the cabin

Get our Free Cabin Planning Guide & Workbook

Everyone loves planning when it's made simple. Use our Guide & Workbook to get started!

In our FREE Cabin Planning Guide & Workbook, we help you to figure out which planning option may be best for your situation and your goals . . .

 

We ask the questions that you will need to answer before you can get your plan in place, like:

  • How should the cabin use be managed - for regular times, and for high-demand times like holidays?

  • How should taxes, maintenance, and expenses be handled? Based on use? Based on equal responsibility?

  • What if someone never uses the cabin, so they don't want to pay?

  • What if someone wants to do work on the cabin in lieu of paying expenses?

  • Who decides how to decorate and furnish the cabin? Who decides when to replace or update the stuff in the cabin?

  • What if someone wants to sell their share in the cabin?

  • What if the people who want to keep the cabin can't afford to buy out the one who wants to sell?

  • What if someone goes through a divorce or a bankruptcy - do you want to protect the cabin from ex-spouses and creditors?

And many, many more important questions.

 

You probably don't have the answers to all these questions now, and that's okay. The Cabin Planning Guide & Workbook is designed to pose the questions that you didn't know you needed to ask and provide you with some ideas and options that could help you in figuring it out. You can use the guide as a road map in navigating the discussion with your family and as the starting place in working with your attorney, whether you choose to plan through us or with someone else.

Yes, please send me your FREE Cabin Planning Guide & Workbook!

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Which Planning Tool May Be Right For You?

The best plan for you depends on your situation and your goals.

What is a Cabin Trust?

A Cabin Trust is a special trust that is designed to provide for the management of the cabin for many generations to come. There are many different ways to handle a Cabin Trust, and extra benefits like estate tax planning, creditor protection, divorce protection, and self-sustainability can be built in. Cabin Trusts are the gold standard for cabin planning.

What is a Cabin LLC?

A Cabin LLC is a business entity registered with the state that is formed for the sole purpose of managing the cabin property. The family members are each owners of a portion of the Cabin LLC, and the rules governing the cabin are detailed in the Cabin LLC's Operating Agreement. Family members with voting shares can change the terms of the Operating Agreement, so the rules you establish now may or may not last after you're gone. Don't let the name fool you - you can set up a Cabin LLC even if you are the sole owner of the cabin. 

What is a Cabin Co-Ownership Agreement?

A Cabin Co-Ownership Agreement is a contract among all the owners of the cabin, establishing the rules governing the cabin. Like the Operating Agreement in a Cabin LLC, the Cabin Co-Ownership Agreement can be changed by the parties to the agreement (or the people next in line), so the terms that are worked out now may be changed in the future.

A Cabin Trust may be the right solution for you if:

  • You want to avoid probate or estate taxes.
  • You want to provide creditor and ex-spouse protection.
  • You want to make sure that the rules you establish stay in place.
  • You want to provide funding for taxes, maintenance, and expenses for generations to come.
  • You want your planning to remain private.

Setting up a Cabin LLC may be the right solution for you if:

  • You want to get family members involved in cabin management now.
  • You have confidence that your family will only change the initially established Operating Agreement for good, sound reasons.
  • You are not concerned about family members having money management issues.
  • You are not concerned about family members getting divorced.
  • Or, you have confidence that your family members will have the financial resources to buy out the interest in the case of another family member's bankruptcy or divorce.

Executing a Cabin Co-Ownership Agreement may be the right solution for you if:

  • You are currently part owner of a cabin and you (or the other owners) do not want to set up a Cabin LLC or a Cabin Trust.
  • You have confidence that the terms of the agreement will be upheld by everyone once executed.
  • You are not expecting the cabin to stay in the family for many generations.
  • You are not concerned about providing funding for the taxes, maintenance, and expenses of the cabin, and you are not concerned about creditor or ex-spouse protection for future owners.

View Our Plans and Pricing

We believe in no-surprise pricing and making important planning affordable for everyone.

By the way, if you think this planning sounds expensive, you are right and you are wrong. I can guarantee you that it is substantially less costly than it would be for your family to fight over the cabin after you're gone, and I've never had a family who believed in the value of this important planning to leave my office because they couldn't afford it. We've made monthly payment plans available because we know this planning is the foundation for peace in your family for generations to come.

Cabin Trust

  • Can keep complete control until you die
  • Can keep the cabin in the family for many generations
  • Can leave every detailed instructions that must, by law, be followed
  • Can be put into effect upon your death or during your lifetime
  • Can avoid the probate process and be completely private
  • Can be structured to avoid estate taxes
  • Can be structured to provide creditor protection for future generations
  • Can be structured to provide protection from ex-spouses for future generations
  • Cabin Trust can be beneficiary of life insurance, and hold funds for paying taxes, maintenance, and expenses so the next generation doesn't have to
  • Cabin Trust can have a Cabin Trust Endowment that provides funds for paying taxes, maintenance, and expenses so that future generations won't ever have to

 

$2,500 - $4,500

or

$250-$450/mo

 

 

Cabin LLC

  • Relatively simple to set up
  • Can be set up quickly
  • Can be more flexible for next generation to change the rules to suit their choices
  • Has the potential to last in perpetuity
  • Cabin LLC can be beneficiary of life insurance, and hold funds for paying taxes, maintenance, and expenses  so the next generation doesn't have to
  • Must be formed during your lifetime
  • May need to give up some control during your lifetime
  • Rules can be more easily altered after you're gone
  • It is more difficult to keep the cabin in the family over many generations
  • The existence of the Cabin LLC is a matter of public record
  • Your interest in the Cabin LLC is part of your probate estate, unless you have done some other planning that avoids probate
  • Your interest in the Cabin LLC is part of your taxable estate, unless you have done some other planning that avoids estate taxes
  • There is no creditor or ex-spouse protection for future generations; the best you can do is give the others the first right to buy out the interest

$2,000

or

$200/mo

 

 

Cabin Co-Ownership Agreement

  • Most simple planning to do
  • Doesn't require the property to be retitled or transferred
  • Must be formed during your lifetime
  • Must give up some control during your lifetime
  • Most likely of options to be dissolved quickly
  • Nothing ensures that agreement will continue past initial parties
  • It is difficult to leave money for cabin taxes, maintenance, and expenses
  • Your interest in the  cabin is part of your probate estate, unless you have done some other planning that avoids probate
  • Your interest in the cabin is part of your taxable estate, unless you have done some other planning that avoids estate taxes
  • There is no creditor or ex-spouse protection for future generations; the best you can do is give the others the first right to buy out the interest

$1,500

or 

$150/mo

 

 

Want to know about us and what we do?

Kimberly M. Hanlon, LLC is a Minneapolis law firm with a fresh approach to traditional legal dilemmas.

Kimberly M. Hanlon

Kimberly M. Hanlon is a Minnesota attorney offering comprehensive services in the areas of estate planning, small business law, and probate administration.

She has a different approach to lawyering than most of her colleagues – everything from how she approaches client relationships to how she advises people. Kimberly believes that the business-as-usual model for law firms doesn’t work for people, so she took on a whole new way of serving clients.

Come and see what makes our firm different – we have a fresh approach to traditional legal dilemmas.

Want to reach out to us?

By phone: (612) 206-3701

By mail: 310 4th Avenue South, Suite 5010, Minneapolis, MN  55415

By email: service@khanlonlaw.com

On our firm website: www.khanlonlaw.com

Through our social media:


 

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Copyright 2015 Kimberly M. Hanlon, LLC

This website provides a variety of information about our firm and about legal topics of interest to the general public. All of the information on the Minnesota Cabin Planning website is provided for informational purposes only and is not intended as legal advice. Nothing contained on this website creates an attorney-client relationship, and any information transmitted to Kimberly M. Hanlon, LLC through this website is not confidential or subject to the attorney-client privilege.

 

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