Handing Down a Vacation Home

Handing Down a Vacation Home


What a wonderful legacy it is to leave a Lake Geneva vacation home to your heirs. This lake is dotted with such properties, be those large sprawling estates or simple wooden cottages, the end result is the same, the good will intact. To start a tradition is to start something overwhelmingly special, even if those who start the tradition sometimes do so more out of immediate concerns than some long looking generational goal. The generational retreat is a rare item, but I can’t think of a single tangible legacy item that is more revered than a singular residence that has played host to decades upon decades of family memories, the first time for this and the last time for that and so on. While this is such an inspiring ideal, after 17 years and three months in this business I can tell you that such goals generally go the way of my weekly Monday diet initiatives.

The Chicago Tribune did their darnedest to explore this topic yesterday, and I read with some interest this article and another one that was more pointedly Lake Geneva- the dining review. We’ll dissect that odd piece of “journalism” on Wednesday, but for today we’re on “Handing Down A Family Vacation Home”. The article spends many words telling people who may be in the position to some day gift a family vacation home what they should be doing now to ensure a proper transition. They suggest talking with financial planners, attorneys, and the some-day heirs themselves. They tell you to do these things, and they spend a whole page doing it. As is my way, I’ll cut through their words with this cruel dose of real world advice, advice that goes against my very existence: Sell the vacation home before the heirs can destroy it.

That’s harsh, and direct, but in these years of doing these things that I do, I can tell you that there are various actions taken by heirs of lakefront and lake access property here. Many times, these new heirs will sell the property without hesitation. Usually this is what happens. The era of long standing vacation home ownership is mostly over, excepting a few traditionalist strongholds. For the record, I’d like to tell you that I wish every vacation home here could stay in the family forever. But this is wishful and naive thinking, and that’s the sort of thinking that you can find on other real estate blogs, not necessarily this one. What happens, instead, upon the passing of mom and dad, is families tend to follow one of a few paths.

To understand the thought process of families facing this situation, you must first understand the demographics of the likely scenario. If a family purchased a vacation home in the 1950s, and then raised their four children in Arlington Heights with summers spent at that lake home, the odds are heavy that at least two of these four siblings have since moved out of state. Generally speaking, in a Chicago sense, one is out West and one is out East, and perhaps two are left somewhere in the Chicago metro area. The one out West is probably in Colorado, but he might be in California, and there’s a chance now that he’s in Texas. The one out East is either in Florida or New York. This is just the way it is. And so the discussion ensues, what do these four siblings and their families do with this property in Lake Geneva, the one where so many of their fondest childhood memories played out on white piers.

Typically there will be two owners who have no interest in the home, and these will be the out of state siblings. One in Chicago will wish to keep the home, to perpetuate those fine memories and instill the same traditions in their own children and grandchildren, and the other in Chicago will be ambivalent. The property will be valued, the votes tallied, and more times than not the family will come to a collective agreement to sell the home and divide the proceeds. This generally happens over many emails and phone calls, and though not everyone finds the situation ideal, there is an amicable outcome and all parties move on with at least some sadness in their hearts. This is the normal path that an inherited property follows.

There are rare and joyful occasions where the siblings that inherit a childhood vacation home end up keeping that home. They divide the costs evenly, they formally divide up the weeks of the year, or they informally arrive on sunny weekends, all at once and have the sort of fun that can only be had at a lake house. This is an ideal situation, but it is obviously a rare one. It’s rare because these years of experience have taught me that grown siblings rarely agree on anything, be that politics, geography, or communal vacation home living. If all siblings wish to keep a home, and all are financially capable of footing the ownership bill, then we’re all able to celebrate this, and we’re able to mark down another true generational retreat on or near these rocky shores.

These are the scenarios that we wish would happen. These are not the only scenarios. The last scenario finds the family in court, fighting over a lake house that was once the scene of so many happy memories, communicating with siblings via court order instead of Sunday afternoon phone calls. This last option is somewhat common, and I’m saddened by it every time I see it. The fun side of this business is in placing water-depraved families in a lakefront home. How I love that. The real side of this business is in wedging between divorcing spouses, and in attempting to not take sides in sibling battles that ring the epicenter that is a passed down vacation home. The love of money is the root of all evil, we all know this, but love of inherited money that must be split somewhat evenly between heirs that didn’t personally work to gain that money is a special kind of evil.

So what’s the best path for a couple deciding how to leave their vacation home to their children or other heirs? The best path is a clear one, a much discussed one, a legal one. While I am not an attorney, due mostly to my distaste of book learnin’, an attorney should be an integral part of this estate planning. If all parties expressly agree on the path forward, and that path is put in writing with clear instructions, perfect. However, if there’s even a whiff of hesitation by one of the parties, the best option is to sell that home before it has the opportunity to tear your now-adult children apart. Money does strange things to people, and by strange I mean awful, horrible things. Don’t let that happen. Avoid such misery by deciding on the fate of that vacation home long before your own fate has been decided.

Above, my modern home on the South Shore of Geneva. $3.799MM.

About the Author

Leave a Reply