TRUST FOR FAMILY HOLIDAY HOME
You and your brother or sister would like to purchase a holiday home together. What makes it attractive is that co-ownership brings the benefit of pooling funds and the sharing of expenses. And if there are three or four families that pool together, the benefits are so much more.
Where the “paw-paw may hit the fan”, is when one in the group wants to pull out, or one passes away. The trouble is that normally a share of the property, in other words a fraction of ownership, must be sold. In the case of a deceased estate it can eventually turn out after 30 years or so that there are 20 co-owners who don’t know one another!
The answer is to set up a trust and to consult an attorney to attend to the draft of the trust deed and to arrange for the appointment of trustees in such a way that all the families are treated equally. The property should then be purchased by the Trust and transferred into the name of the Trust.
Trusts do not pay additional transfer duty (as was the case in recent years). The property stays outside the estate of the family member and will therefore not count for estate purposes.