Remember Grandma’s Cottage? You learned to swim there. Caught your first fish (what do I do NOW?!). Stealing bacon for bait when you ran out of worms. The leaky rowboat. Crammed with your cousins in sleeping bags on the “living room” floor. Trading stories in the dark. Grownups yelling “Shut up and go to sleep!” from the patio. Waiting for the charcoal to get just right. Hotdogs on the grill. Toasting marshmallows. Fireflies. That particular musty damp smell. Whatever happened to that place?
Well, they put all us kids on the deed, but it was sold when… Grandpa went into the nursing home… Uncle Chuck went bankrupt… Aunt Susan’s kids kept trashing the place… Aunt Beth got divorced… Cousin Ed needed college money… We just didn’t go anymore… Many reasons, no more memories, no more stories.
But the Cottage can be saved. You can do it. Your kids and grandkids can live those stories, create those memories. Share experiences. Bond as a family. Build the stories they’ll tell the next generation. Crammed with their cousins, in sleeping bags, in the same “living room.”
Do Not Trade The Cottage For The Nursing Home
Most folks simply do not plan for long-term care. You have heard bits and pieces. Old lake friends forced sale to pay the bills. Horror stories. Bad luck. Tough. Sorry it happened to them. Could not happen to your family.
Clarity is the first step. Estate planning is not about the next generation. It’s about you. Right now. Preserving what you own. Protecting what you value. Traditional estate planning fails families. Most folks eventually need long-term care. Most folks eventually sell the Cottage to pay for it. Simple as that.
You can avoid nursing home poverty. Why isn’t it your top priority? How? LifePlanning™. This system acknowledges that middle class prosperity and independence are destroyed by long-term care costs. LifePlanning™ first protects the Cottage and other family assets. Once life savings are protected, the family can intelligently and purposefully plan for life choices respected.
Now the Cottage is protected and purposefully planned. Life choices respected. No threat from health care, lawsuits, or long-term care expenses. Now we are able to look to the future. Some fundamentals are key.
Estate planning is not about the next generation. It’s about you.
Cottage Life Cycle
Cottages have a life cycle that is remarkably consistent. Ignoring the Cottage Life Cycle practically insures failure. Most planning ignores the Cottage Life Cycle.
Little Kid: Grandma’s Cottage is a magical place: sunny days, puffy clouds, fish a-biting, campfires, friends, swimming. Let’s go! Glorious!
Teenage Years: Grandma’s Cottage is a stinky dump. Why do I have to go? Not cool. Get me outta here!
Young Adult: Bills, bills, bills. Cottage? Sorry: no time, no interest. Cash me in my share of Grandma’s Cottage. So, what if you have to sell it? I ain’t got time for that now.
Married with Children: Gee, whatever happened to Grandma’s Cottage? Too bad our kids won’t have that experience. We can’t afford a Cottage at today’s prices. Even the rentals are outrageous. Too bad.
Grandma’s Cottage begins and ends as the most desirable place in the world. But in the meantime, urgency overrules importance, and the Cottage is sacrificed. Bad luck. And it doesn’t have to be that way. You can have both nostalgic memories and today’s adventure.
Two Traditional Techniques, Two Ways To Fail
Families have failed for generations to protect the family Cottage. I blame the lawyers who advise poorly. You think they would have learned by now. You would be wrong. For generations, the most popular techniques are “last man standing” and the “corporate model.” Both facilitate failure.
Last Man Standing
By far the easiest, cheapest, most popular, and least likely to succeed: “Putting the kids on the deed.” Usually as joint tenants with rights of survivorship. Sometimes (usually by mistake) as tenants in common. Disaster! Joint tenancy equals no rules. Everyone can do anything. No one must pay. And you cannot get out of it. Except by death. Example: Grandma and Grandpa put Aunt Sue and Uncle Chuck “on the deed.” They pass on. Aunt Sue pays all the taxes, utilities, upkeep. Uncle Chuck brings his 30 closest outlaw biker chums for the weekend. Every weekend. Aunt Sue cannot prevent it. Cannot stop him. Cannot make him pay his “fair share.” And if Uncle Chuck lives longer than Aunt Sue, he owns it all. It happens. Failure. But it does avoid probate… whoopee!
Sometimes, when one kid has great financial need (real or imagined), the others will agree to sell the Cottage. Failure again.
So how about some rules? Great idea! And that is the basis for the “corporate model.” Create a limited liability company (“LLC”). Now there are rules. But a new problem. The corporate model gives each beneficiary the right to leave. And to be paid off. Compensated for their share of the Cottage. That is when the corporate model fails. Sooner or later, someone wants out. And they have a right to money. Which the family does not have. Forced sale of the Cottage. Failure.
Remember the Cottage Life Cycle. At some point, each beneficiary will “need” the money more than the Cottage. My experience is that it only takes one. One kid to say “Cash me in.” And then the Cottage is sold. Memories last forever, but that’s the end of the Cottage experience.
A New Hope: The National Park Model
Weaknesses of the Two Traditional Techniques are painfully obvious. And have caused great pain in thousands of families. New hope comes in the National Park Model. It is simple.
Grandma and Grampa want future generations to have magical, irreplaceable experiences. Grandma and Grampa know Cottage Life Cycle. They have seen it in operation. They want to guarantee their legacy.
Here’s the idea: National Parks were established to preserve the irreplaceable. Fill in the Grand Canyon? There isn’t another one. Pave over Yellowstone? Gone for all time. But. Set these treasures aside. Prohibit selfish or short-sighted decisions. Focus on the far future. Now things look different.
You can’t “cash in” your share of Yellowstone or Yosemite, just because you don’t plan to go. Why should you be able to “cash in” the Cottage? And wreck it forever?
You can’t just throw down a tent and sleeping bag in a national park. You have to pay the expenses you create. Why should anyone freeload on the Cottage? Why not establish a budget and other mechanisms that will ensure long term viability?
That’s how dozens of families are now protecting the Cottage today. Rules for harmony. Preserving the past for the future. Pay as you go, while building reserves. No desperation. No leaky roofs. No unpaid taxes.
The National Park Cottage Trust works well in many contexts. The hunting property. The family farm. The townhouse. Clarity eliminates family strife. Reliable rules cement family relationships. In a world of conflict and chaos, wouldn’t it be nice to establish a safe haven? Traditions that will endure. Memories down through the ages. Without regret.
In a world of conflict and chaos, wouldn’t it be nice to establish a safe haven?
Taking Care Of Yourself Is Taking Care Of Your Family
Too many families have the story of the Cottage, the Farm, the Hunting Cabin that “got away.” Your family does not have to suffer a similar fate. You can be the author. Rewrite the future story of your life and your family’s. The National Park Model approach preserves resources, strengthens relationships, achieves your highest goals. And when your great-great-great grandchildren laugh with delight, learning to swim, fish and camp on the Cottage you provided for them… Well, I expect you’ll hear it, all the way over on the other side of the Great Divide.