estate planning including family lake cottage with father son fishing on lake

Read the Print Version

July At The Lake: A Midsummer Night’s Dream, Or …Now Is The Winter Of Our Discontent!?

The Family Cottage: Godsend Or Hellhole?

“Holiday” it’s not just for Christmas anymore! In some uncivilized countries, for example, Europe and Asia, new hires get 6 weeks of holiday (which means vacation). And it goes up from there. Sadly, they also get lots of regular holidays (which they call “festival” or some such). In China, vacation is a constitutional right. In France, mess with their time off and they’ll burn the place down. Which they did earlier this year. What would you do with similar excessive periods of sloth and inactivity? Quelle horreur!

Americans get weekends. And summer! And a week or so of “vacation”. And being Americans, we do not waste this precious time. If Americans were as sedentary and unambitious as our global neighbors, we could spend this time in art museums, sidewalk cafés or worse. Improving ourselves. Getting culture. Ghastly stuff.

Sturdy, active, engaged Americans are attracted to Home Improvement like moths to the flame.

Painting. Building. Planting. Landscaping. If it moves, salute it… if it doesn’t, polish, fix or improve it. Forlorn foreigners have foreign “attractions”. The Pyramids. Macchu Picchu. The Coliseum. Ankor Wat. Meh. They could all use some updating and a fresh coat of paint. America has Lowe’s, Harbor Freight, and Home Depot. If King Tut had an account at Menard’s maybe his stuff wouldn’t have gotten lost for so long.

Sooner or later, though, all true Americans feel that irresistible urge. Everything that can be done, has been done. We need new horizons, unseen vistas. We need to get out of Dodge, at least for the weekends. Summertime. Hunting season. We got bored. So we got another home. In God’s country!

The second home could be a house. Or single wide. Perhaps a shack with no indoor plumbing or insulation. On a 40 foot lot. At the lake, at the shore, in the woods, somewhere other than here. From Idlewild in Lake County to Beaver Island in Lake Michigan. America’s middle class workers filled the developments which sprang up around every lake, pond, and ditch within driving distance. And because that lake wasn’t big enough, we dug canals, dammed creeks, and otherwise expanded our Water Wonderland. Magnificent! And not only lakes, but the woods filled with weekend escapes too! Glorious!

At grandmother’s cottage many of us learned to swim and fish. Caught tadpoles and watched them grow to frogs. Searched for salamanders under logs and rocks. Got mosquito bites and poison ivy. Fell in
the mud. Played in the sand. Went ice-fishing in the winter. Campfires on the shore. Remember?

Whatever happened to that place? How much would it cost to buy something similar today? Why did we get rid of it? Too bad our kids and grandkids won’t have the experiences we did. Or the memories. At least they have iPads.

The Family Cottage LifeCycle

To everything there is a season,
A time for every purpose under heaven:
6 A time to gain, And a time to lose; A time to keep,
And a time to throw away;
— Ecclesiastes 3:1-2,6

Is it foolish to think that there is a lifecycle to cottages and properties? Is there is a routine evolution in the relationship between family and property? Is it a bad idea to recognize the lifecycle and work with it? Are you against preserving unique opportunities for your family?

Family Cottage Lifecycle:

1. Young Child: Best. Place. Ever!

2. Teenager: So stupid. Boring. Smells funny.

3. Young Adult: Life is busy. No time for that place. I’d sell my share in a heartbeat… tuition/new car/ down payment/taxes…

4. Parent of Young Child: Why did we ever sell the cottage? Even renting at the lake is too expensive.

5. Older and Wiser: If I ever get the opportunity, I won’t make that mistake again.

We all pass through seasons in our lives. As we gain experience, some important-seeming situations will fade to nothing. Other events will become more meaningful as time goes by. Wisdom and perspective cannot be taught, only learned. Growing up is the tuition that must be paid for insight.

Are long-term decisions best left to the youngest, least-experienced folks? Is it wrong for those with proven perception and prudence to plan for the long- term? Should you sacrifice long term gain for short term relief?

You Probably Have A Lousy Estate Plan That Guarantees Loss Of The Cottage

Traditional estate planning dumps your leftover stuff on your beneficiaries. After you die. Don’t much care what happens to you while you are alive. Not kidding.

Traditional estate planning fails because the overwhelming majority of us will need long-term skilled care. 70% of us. For an average of 3 years. More than 5 years for 20% of us. And we will go broke paying for it.

Is it surprising that thousands of recreation properties: cottages, cabins, hunting land, are lost to pay for long-term care?

LifePlanning™ defeats Nursing Home Poverty. Keep your stuff. Get the care you have already paid for.

LifePlanning™ means you do not have to sell the cottage and “spend down” the proceeds.

What If You Luckily Avoid Losing The Cottage While Living?

Your Lousy Estate Plan Will Really Screw Things Up When You Die

Let’s say you win the lottery and get hit by a bus instead of going through long-term care. Now what to do with the recreational property? Traditional estate planning offers two options:

1. Circular Firing Squad or Last Man Standing

2. The Corporate Model or Last One Out is a Rotten Egg

Circular Firing Squad is easy, cheap and disastrous.

The Corporate Model is not easy, not cheap, and not as disastrous.

Circular Firing Squad

Putting all the kids “on the deed” is the circular firing squad. It is the easiest, cheapest, most popular, and worst possible way to leave recreation property to kids.

“Last Man Standing” is the most common Circular Firing Squad method. This involves naming all of the children or other beneficiaries as Joint Tenants with full Rights of Survivorship (JTWROS) on the deed. As joint tenants with rights of survivorship, the last living person owns the entire property. Did you plan to disinherit most of the family?

JTWROS deeds also deny Medicaid benefits to your kids and their spouses. Medicaid treats their share as if it was cash in the bank. But it is NOT cash in the bank, it is a fractional interest that is totally locked up in the property. And now your kids are disqualified from Medicaid. Whoops!

But that is not the worst. JTWROS deeds have no rules. Other than each person can fully use the property without the others’ permission. Congratulations! Your child is the new president of the Pagan Assassins Mud Wrestling Team – Australian Rules. Your child invites the entire 32-member, mixed gender team to the cottage. On the 4th of July. Your child has never paid their share of the taxes, utilities, or maintenance. When the Pagan Assassins leave, the place is a bloody shamble.

And there is nothing the other kids can do about it. In fact, since you signed a standard, immediately effective, JTWROS deed, there is nothing YOU can do about it. Not even dead yet and already you have lost control of your property. Did you know that when you signed on for this quick and easy solution?

Ladybird to the Rescue? You may have used a ladybird or transfer on death deed to create this living hell. Good News! At least the suffering will not begin until after you have passed on to your reward. Then the JTWROS takes effect, and we are off to the races.

You may also create a Circular Firing Squad using a “Tenants in Common” deed. The TIC deed gives individual shares to each child while you retain a share. Unlike JTWROS, each child owns a piece that they can give to the grandkids. Or sell to the Pagan Assassins. Just as with JTWROS, there are no rules.

Did I mention that each Circular Firing Squad method leaves the other kids open to liability claims from the unsanctioned “activities”? And it does no good for them to abandon the property, now they can be prosecuted for housing code violations. And please! Do not get me started on that methamphetamine lab in the basement. Or the fentanyl stockpile in the shed. Oh my!

If you are going to create a Circular Firing Squad, use the TIC method. If they all hate each other enough, they can go to probate court, sue one another, and force a sale. Thanks Mom! Thanks Dad! Great planning!

The Corporate Model: Last One Out Is A Rotten Egg

Do you really want to leave stuff to the kids without any rules? Is blunt force trauma the best way to make sure your grandkids will learn how to swim at the lake? Do you want to empower one of your kids to hold the others hostage?

There are many permutations of the Corporate Model. Most use a limited liability company to hold the real estate and give shares to the kids.

And there are rules. And governing provisions. And limited liability for the kids. Still have that pesky Medicaid problem with disqualification, but I guess you cannot have everything.

A general rule in a corporate structure is that minority members can sell their shares and get out. The usual Cottage LLC requires the other members to buy out the one who wants to sell. And if they do not… say hello to the Pagan Assassins.

Doesn’t seem like such a big deal. One kid wants to move to the Himalayas and commune with the mountain spirits. That kid is not planning to come back. Or perhaps another kid wants his money to buy a car. The cottage does not seem so important right now. The problem is not one of law. The buyout provisions are clear and enforceable. The problem is that as soon as one kid wants out, the rest want out too. The other kids don’t want to pay, frequently they are not able to pay. It was a blessing to have had the cottage so long, but now it must go. Over and over again, if one kid wants out, they all do. Last one out is a rotten egg!

The Corporate Model fails because it depends on the continued unanimous support of all the family members. The chain is only as strong as its weakest link.

What if there were no links? What if no individual could torpedo the entire family’s legacy?

The National Park Model: Recipe For Success

There is nothing so American as our national parks. The scenery and the wildlife are native. The fundamental idea behind the parks is native. It is, in brief, that the country belongs to the people, that it is in process of making for the enrichment of the lives of all of us. The parks stand as the outward symbol of the great human principle.
— Franklin D. Roosevelt

You will never go to Yosemite National Park. You have Yosemite- phobia. And a doctor’s note to prove it. Since you will never go to Yosemite, you write to the National Park Service. You demand your share of the value of Yosemite. Do you expect a response?

Roosevelt’s “fundamental idea” is that the national parks belong to everyone, down through the generations. The big idea is simple: Preserve it now or lose it forever.

Isn’t that the idea behind leaving the family cottage to the family? Could you afford, right now, to purchase your cottage, cabin, hunting land? Of course not! Lake Michigan properties that sold in the $20-30,000 range in the 60’s and 70’s are in the millions now. If you can find one. And the same is true of smaller lakes. The wild price inflation is less for hunting land, but still forbidding.

At the turn of the last century, a few visionaries like Teddy Roosevelt and John Muir saw that without national preservation efforts, irreplaceable natural treasures would be lost. In other countries, the rich and the royal preserved land for their own benefit. In America, we did it for all of us. And our descendants.

The National Park Model is a new way of looking at your cottage or recreational property. You are making a promise to your future family that short- term considerations will not outweigh long term goals.

The basic principles are straightforward and are familiar to anyone who has ever traveled or camped in a national, state or local park:

1. Rules for Use. Family members are stewards of a gift. Rules for use and care will be clear and must be observed. There will be an evenhanded system for allocating the available space among various family members.

2. Financial Responsibility. Budgets will be prepared, including all taxes, utilities, insurance and sinking funds for all capital improvements, including the roof, plumbing, fixtures and utilities. Present and future expenses will be identified and incorporated.

3. Nobody Rides for Free. You can’t get in a Park without a sticker to pay for the road. You can’t stay overnight without paying for your campsite. You can’t stay at the Cottage without paying the necessary charge to cover your share of the budget. In advance.

There are other provisions that allow for limited liability and definition of membership. These can all be tailored to the specific needs of individual families.

On March 1, 1872, President Ulysses S. Grant created Yellowstone as the first national park in the United States and the world. For over 150 years, Yellowstone has been preserved and available to all Americans.

Is it ridiculous to think that the same concepts that worked for Yellowstone for the last 150 years could preserve your family’s heritage too? Are you against providing that sort of experience to your children, grandchildren, and generations yet unborn?

If not you, who? If not now, when?

Is Now A Bad Time For Real Solutions?

Does anyone on this earth have all the answers? Does that mean we should give up seeking the best answers we can find? Perhaps you already have an answer to this problem. Maybe you do not see this as a problem at all. Why not find out? Is now a bad time to find out how to obtain security for yourself? And your family?

Peace of mind and financial security are waiting for everyone who practices LifePlanning™. You know that peace only begins with financial security. Are legal documents the most important? Is avoiding probate the best you can do for yourself or your loved ones? Is family about inheritance? Or are these things only significant to support the foundation of your family?

Do you think finding the best care is easy? Do you want to get lost in the overwhelming flood of claims and promises? Or would you like straight answers?

Well, here you are. Now you know. No excuses. Get information, insight, inspiration. It is your turn. Ignore the message? Invite poverty? Or get the freely offered information. To make wise decisions. For you. For your loved ones.

The LifePlan™ Workshop has been the first step on the path to security and peace for thousands of families. Why not your family?


It is not chance. It is choice. Your choice.
Get Information Now. (800) 317-2812

Find a FREE LifePlan™ Workshop Near You!

Sign up now to register for our LifePlan™ Workshop. Attend in person or watch online with our on-demand option.

Free Registration

No Poverty. No Charity. No Waste.
It is not chance. It is choice. Your choice.
Get Information Now. (800) 317-2812