One of the most important questions to ask is whether your children are interested in the continued ownership and operation of the property. A family discussion is the best way to determine this, while recognizing their interest may change over time. The goal of these discussions is to understand how your children feel about the property. This can be done by holding a family meeting, or through individual conversations. Here are some questions to ask:

• How attached is each child to the property?
• How much they would use the property if it remained in the family?
• Are they willing or able to contribute to the property maintenance either by way of money or labour?
• Are they able to share the property amicably with other family members?

Depending on whether your family wants to keep the property or if it will be sold in your lifetime, additional considerations will need to be addressed. For example, if the property will be sold in your lifetime:

• When is the right time to sell the property? In other words, how much longer would you like to be able to use the property? What is the market for vacation properties?
• Do you know anyone interested in purchasing the property? Are there extended family members who may want to purchase the vacation property?
• What will you do with the sale proceeds? Are you looking to purchase another vacation property?

On the other hand, if the property is being transitioned within the family:

• If one child inherits the property, do you want the inheritance of other children to be equalized? If so, will that be done in your lifetime or in your will? What does equalization look like?
• If children are sharing the property, how will it be owned? Will the children be joint tenants with right of survivorship or as tenants-in-common? Alternatively, does a family trust make sense?
• Who is responsible for future maintenance and costs associated with the property? If you are contributing to or responsible for these costs, is that something you have reviewed with your financial advisor and incorporated into your retirement plan?

Finally, regardless of the end goal for the property, capital gains are a consideration for most families as the property may have substantially appreciated in value, especially if the property has been in the family for some time. Subject to your plan for the vacation property, capital gains tax may be due during or after your lifetime. Therefore, it’s important to talk to your tax advisor about how this impacts your succession plan.

Once you have a sense of the answer to these (and other) questions, the next step is to work with your team of advisors to figure out the specifics, including legal and tax considerations, as well as next steps. As with many planning topics, what is right for each family will differ. However, it is through comprehensive planning with your advisors as well as communication within the family that you will arrive at the plan best suited to your situation.