Don’t split heirs! How to avoid family fights when leaving behind a second home

investmentnews.com:

Forget location, location, location. Parents leaving a treasured holiday home to kids and grandkids have three more important things to worry about if they hope to avoid years of family in-fighting and legal battles.

Ownership, management and use of the holiday home: That’s the trifecta estate planners and financial advisors need to reckon with if they want to keep the peace.

When it comes to ownership, the big questions that must be answered include: Who actually owns the property? Is it the parents or grandparents, and do the children get to use it? Is it a trust for the benefit of multiple family beneficiaries, potentially lasting over multiple generations?

As for management, the property owners need to know who will pay the bills, maintain the property and deal with repairs, insurance, property taxes and the like?

And when it comes to use, who gets to enjoy the property and when? 

“I’ve had situations where the grandparents bought the property decades ago, and they are long gone, but now there are 20 grandchildren who all want to use the property,” said attorney Asher Rubinstein, partner at Gallet Dreyer & Berkey. “What are the rules, and who makes the rules, about allocating usage among multiple family members? What happens if there is a conflict? Ideally, the rules are set forth in a document that is binding on all the family members who use the property, such as an operating agreement or a trust document.”

Rubenstein said one strategy that has proven to be successful in many cases is a family limited partnership, or FLP, which includes all of the various roles — ownership, management and use of the home. The FLP owns the home, which provides asset protection and estate tax benefits. The general partners are the