Dealing with a Family Cottage

When Jesse and Kae Burke purchased a vacation cottage 30 years ago, they knew it was a good investment, but creating time for family was their primary goal. Indeed, the property value had appreciated considerably, but more importantly, it had given them a lifetime of memories with their children and, more recently, their grandchildren.

Today the couple is in their 70s with two grown children. Jennifer lives nearby with her husband and children. Doug and his wife live in the USA. The Burkes own their primary residence and have sufficient investments to maintain their lifestyle. However, they no longer want the responsibility of maintaining their cottage. Uncertain about how to move forward, the couple connected with their financial advisor, who asked some helpful questions: Would one or both of their children like to own it? Could they afford it? Would they be compatible as co-owners? The best way to get these answers was to talk with their kids. Doug thought they should sell it, pocket the money and travel the world. Jennifer, on the other hand, hoped they would keep it forever.

Jesse and Kae discussed the conversation with their financial advisor, who offered two options to consider:

  1. Gift the property

    Given that only Jennifer wanted to keep the property, the couple could gift it to her at today's fair market value, understanding that this would be the bulk of her inheritance. There would be tax implications for their generosity, however. The CRA would treat the transaction as if they had sold it to Jennifer and would be taxed (up to 40%) on how much the property had increased in value over 30 years, which was considerable. To avoid this, their financial advisor suggested they gift the cabin to their daughter over five years and add her to the title as a Tenant in Common, which allows for an unequal ownership share in real property.

  2. Create a trust

    They could also transfer the cottage to a trust, either while alive (inter-vivos) or under the terms of their will (testamentary). This would continue to give Jesse and Kae control over the property during their lifetime. An inter-vivos trust would trigger capital gains tax for Jennifer, but they could also consider a joint partner trust (JPT) on a tax-deferred basis. Capital gains would be payable on the death of the second parent, but Jennifer would have 21 years to deal with the cottage property and could also avoid probate tax on its value. Before doing this, the couple would need written assurance that Jennifer was legally responsible for the costs of maintaining the cottage.


Jesse and Kae ultimately chose to gift the cottage to Jennifer, an option both of their children were happy with. They all felt that having an expert navigate the process helped avoid potential financial, legal and emotional pitfalls. A vacation property is often a treasured family asset. Knowing how to pass it on to the next generation is challenging. We're here to help.

Contact our office to explore your options.


*Fictional characters for illustrative purposes only.


Copyright © 2022 AdvisorNet Communications Inc. All rights reserved. This article is provided for informational purposes only and is based on the perspectives and opinions of the owners and writers only. The information provided is not intended to provide specific financial advice. It is strongly recommended that the reader seek qualified professional advice before making any financial decisions based on anything discussed in this article. This article is not to be copied or republished in any format for any reason without the written permission of the AdvisorNet Communications. The publisher does not guarantee the accuracy of the information and is not liable in any way for any error or omission.

What our clients are saying...

  • We expect a Financial planner to be thorough, detailed and have a strong understanding of their clients' needs. It was a pleasure working with Anthony and his team. He delivered a tremendous package and reviewed his findings in great detail. Anthony's attention to detail, solutions, recommendations and in-depth reports provides a great deal of confidence in his recommendations. We would absolutely refer our family, friends and associates to Anthony.

  • I expect my financial planner to review and discuss my financial goals along with how my goals can be achieved. I valued Anthony reviewing my investments and the projections of what they will equate to when I reach my eventual retirement. Anthony has certainly met my expectations and I would be happy to refer my family and friends.

  • My expectation was to be provided with the best possible advice specific to my situation (as it evolves) and to be provided with objective, evidence-based solutions which will provide me with the maximum financial benefit (and peace of mind). I valued the very thorough process of gathering all pertinent information regarding my estate, pension, income and expenses in order to produce a very detailed and fulsome projection of my current and future financial situation. I really appreciate the time Anthony has taken to answer all of my questions and provide sound advice based on my goals and concerns. I am really looking forward to continuing my investment and financial planning journey with Anthony. I would certainly recommend Anthony to my family and friends!

  • We valued receiving a detailed report and explanation of our finances. When working with a financial planner, we expect to have our questions answered with adequate detail and to have a plan developed to help grow our money. Our expectations were clearly met and we would be happy to recommend Anthony to anyone looking for a Financial Plan.

  • We valued the fact that you sat down with us, heard what we wanted to say, asked for clarification and offered suggestions, and then came up with a detailed and well-reasoned plan in a short period of time and communicated that back to us so that we knew what we needed to do moving forward. Thanks!

    Our expectations for a financial planner are several fold: (1) Does the planner communicate well, in that they both listen but also offer suggestions and ideas in a clear easy-to-understand way, (2) Are they able to meet their client at the same energy/level and meet their specific needs? In our case we needed a tax minimization strategy within a short turn around time. (3) Did the planner actually do their job, in that were they able to provide ideas and suggestions that helped address the client's asks?

    We came to see you because we realised that we hadn't looked at how to minimize the taxes related to my Father’s estate planning and my mother’s future financial planning, and you were able to tell us things that we didn't know about, and offered us solutions that helped us with our future financial planning.

    You definitely met our expectations! In some ways, you actually exceeded our expectations. We were hoping that you could respond quickly, and you came up with a detailed and well-reasoned plan faster than we expected!

    Our only area of improvement we could think of was, given that the plan was very detailed, if we had an explicitly spelled out action plan with a timeline for completion.

    We are very happy and would definitely recommend you to our family and friends and in fact have already done so!

  • Anthony made the process very clear and explained each step along the way. He was very honest and straight forward. My expectation from a financial planner is that they are honest and transparent. Anthony definitely met my expectations and I would be happy to recommend him to my family and friends.