Have You Had The Cottage Talk?
Many positive memories are made at the lake each summer as family comes together to have fun and bond at the cottage. But amidst the joviality, s’mores, and summer fun, one question doesn’t get asked:
“Hey kids, when your father and I die, would you still want to keep the cottage?”
Understandably, not a topic for the campfire but, tragically, it is frequently not a topic of conversation for families, period. That means, numerous cottage owning families have not had an intentional conversation around what to do with the family cottage. Ironically, this is often an attempt to avoid friction. It is not a simple or easy conversation to have. However, families who do not plan collaboratively around their family cottage are setting themselves up for some far more serious challenges and tougher conversations in the future. While estate discussions don’t feel like they align with summer fun at the lake, it’s important that you make this summer the start of these conversations.
The family cottage is an asset that often comes with emotions attached. Unlike an RRSP, it’s not just an asset. It represents family values and shared family experience. It’s no wonder that you want your children to be able to have the cottage after your passing, and then pass it along to their kids. The cottage represents the essence of family legacy.
As a first generation cottage owner. I can certainly vouch for the level of emotion our cottage holds for my wife and me. Our children all avow that their best childhood memories were created at the cottage. This is where we grew up together into the family we are today. Why wouldn’t our children want these experiences for their children? Of course, they do want these experiences of shared adventures and family time, but it would be a mistake to assume that our children also want the cottage.
Issues with the cottage and estate are not limited to first generation cottage owners. If you are sitting in a multi-generational cottage reading this, you likely have a different perspective – and a different set of challenges on how to handle passing on the cottage. First, second, and even third cousins may be added to the mix. As time passes and families grow, the complexities multiply.
Time and again we hear stories about estate settlements that have gone sideways due to disputes that centre on the family cottage. Once again, this is because it is the one asset that everyone in the family is personally connected to and most represents mom and dad and their love. Why are you not talking about this now? Probably your answer would be a variation on fear. How would you finish this sentence? “We are afraid of having an open and honest talk with our children about the sensitive issue of death and our estate because… “
Don’t let fear get in the way of love! Make the time to have this courageous discussion with your family. Put the question out there: “When your mother and I die, would you want to keep the cottage?”
What you hear might surprise you:
- No, we are all living in other parts of Canada/USA now, and only make it back for one week a summer. It’s just not practical for us.
- Yes, but we could never afford the taxes, maintenance, and upkeep. Without some significant financial help it wouldn’t work.
- I would like to buy it if my siblings don’t see themselves wanting to use it. Is this possible? How would I pay for it?
- Mom and dad, we love coming here, but frankly this is not our passion.
- It would be nice, but with all of us having children and wanting to share this, we just can’t see making it work into the next generation. To avoid the potential fights, we think you should sell.
- I would love it but how is that going to work with my siblings? How could we share?
Listen carefully. You want people’s honest thoughts and feelings. Make sure everyone has a chance to speak. Take notes, which you should share with each family member, while asking them to weigh in with any new thoughts or perspectives. Once you feel you have heard from everyone and have a clear direction to follow, let your family know how you would like to proceed. Then, seek the necessary legal help to make sure this is all well documented. Think about seeking out a professional who can help facilitate your discussion, if you feel that the topic could become too contentious.
Ideally, this is a conversation that will be ongoing. Circumstances change. Family members move. They marry. They divorce. They have children. They have health events. When the cottage conversation is ongoing, it incorporates all the wonderful movement of life. The more you have these exchanges, the easier it will get and the more clarity you will create with your family.
In the O’Connor family, we are still in the midst of enjoying our cottage with our adult children. We do not know what the future will bring but we have a plan in place now based on the conversations we have had as a family. We know as circumstances change, the conversations change, and our plans will change. In the meantime, we continue with the important family business of creating memories at the cottage – memories that now include the “cottage talk”.
Have a great summer!
Patrick O’Connor, FEA, CFP, CLU, CHFC, TEP
President, Blackwood Family Enterprise Services
FEC Ambassador