Explaining Cottage Law. Plain. And Simple.

The goal of cottage succession planning is to set up legal ground rules that provide the best chance to keep a cottage in the family for future generations. Cottage law draws on legal concepts from estate planning, real estate and business law. A cottage plan usually addresses these concerns through the creative use of a limited liability company (LLC) to own the property.

Properly crafted, the LLC’s Operating Agreement covers such topics as who can own a share of the cottage, who pays to maintain it (and what happens if they don’t), who gets to use it and when, how to make decisions regarding the property, and how to respond when an owner wants to get out of the arrangement for any reason.

These are the basics, but just as each family is different, each agreement can be tailored to fit very specific needs.