New York Estate Planning & Elder Law Blog
Many affluent families are increasingly building or buying legacy properties – multi-million dollar properties or compounds that are designed to be shared with family now and for generations to come. This trend comes with the rising interest in multi-generational living and vacationing as well as to be a place where family from around the country or world can gather to be together. However, estate planning with complex family dynamics, lifestyle issues, or logistical problems can often mar what is meant to be a place for family.
Legacy Homes
What make legacy homes different from just a large house are the resort-style amenities being built on the property. Many legacy homes have multiple master bedrooms or mini apartments, sport courts (volleyball, basketball, tennis, croquet), and swimming pools. In-home theaters or teen zones for digital gaming are also commonplace in a legacy home. Lakefront or seaside properties often come with their own dock, boathouse, or beach. Meanwhile, legacy homes in the countryside routinely come with shooting ranges, hunting areas, or equestrian facilities.
Architects focus on building common areas and open floor plans that create a feeling of togetherness that also have separate areas for activities like cooking, watching television, or playing. In addition, practical concerns like multiple car garages, extra-large kitchens, and large eating areas are also a must. These homes are meant to be more than just a place for vacations and are meant to be the backdrop for weddings, birthdays, graduations, holidays, and other family celebrations.
Estate Planning for a Legacy Home
To protect such a large investment like a legacy home, estate planning is vital. The “four P’s” of estate planning are often emphasized by attorneys for such an asset: protection, privacy, probate avoidance, and planning.
Protection
Protection includes comprehensive insurance coverage for the home that can cover any potential damage, liability coverage, and an ownership structure that will protect the home from being seized by outside creditors.
Privacy
In order to ensure privacy, discuss with your estate planning attorney about placing the title of the estate with a legal entity like a trust or limited liability company. It should have a name that is not linked to the family.
Probate Avoidance
One of the most important things is to try and avoid probate on the estate when the original owner passes away. By properly placing the legacy home in a trust or other estate planning tool, the home can avoid the lengthy, public, and expensive process of probate. It can also help to mitigate any estate taxes.
Planning
Finally, the owner of the legacy home needs to establish a clear succession plan for the estate that details who owns the property, how it should be managed, maintained, and eventually passed on to future generations. When this isn’t implemented correctly, legacy homes that have been in the family for generations can be sold because of family disputes over who owns the home, how it should be maintained, or how it will be passed on to future generations of the family.