Cabin fever

The family cabin: keep, sell, or buy?

Minnesota cabin / photo by Josh Hild on Unsplash

Saddled. Blessed. Burdened. Honored. Hassled. Appreciative.

These are just some of the terms that Christine Tomlinson of Minneapolis uses to describe her participation in the ownership of her family’s cabin. She can’t claim it yet – her father and mother still hold the deed for tax reasons – but for practical purposes, the cabin is operated and owned by Christine Thomas 46, and her brother Eric, 49.

“My brother and I deal with all the expenses and at this point it makes more financial sense for them to give us the cabin in their will, rather than sell it,” says Tomlinson of her parents.

When family cabins end up in limbo, all sorts of problems can arise. Financial issues. Hurt feelings. Tax pitfalls. Legal costs. Scheduling demands. However, most people say that having a family cabin to worry about is a pretty good problem to have. Nonetheless, we have a few tips for you to make the transition of ownership (and sometimes through generations) of your family cabin easier.

Communication is key

The Tomlinson cabin is situated on a beautiful slice of land called cranberry cove Tama an offshoot of Rice Lake in Brainerd. The cove and lake are connected to the Mississippi river, creating the perfect boating backdrop for summer fun.

The cabin is one of those idyllic old school family retreats synonymous with a traditional Minnesota summer, says Tomlinson. Besides ripping out old carpet and installing an internal space heater, not much has changed. 

Her grandfather built the cabin in the late 1942 miles away from his home in Brainerd. He later sold it to Tomlinson’s dad, aunt, and Uncle for a token amount. Eventually, Tomlinson’s dad bought out his brother and sister (one moved out of state and the other lost interest in cabin life) and his immediate family became its main summer residents.

“There is so much  Family history in our cabin that my brother and I knew we’d like to keep it one day, and “says tomlinson- and they weren’t shy about sharing that with their parents.

An open line of communication between family members is key when you’re dealing with an inheritance or transfer of ownership of a lake home, Sarvela, a realtor with real estate masters in balloon and president of the Duluth area association of realtors.

“I would have an open conversation with all the children, not just one, and have a sit down to discuss your financial picture, and” Sarvela advises.”put forth your long term care needs. Discuss your lake home like an asset and be clear about what your intentions are.”

The trick is to have these conversations before you actually need to, says Sarvela, who has been practicing real estate for more than 20 years. He has coordinated cabin sales as both a listing agent and as a representative for those who want to buy a cabin that’s caught up in family drama.

“You want to make sure you’re in a situation where you and your family want to sell it, not that you have to sell it, in” he says.” open communication with your children along the way will help that process, so that they will feel like it’s the best thing for mom and dad to do.”

In Tomlinson’s case, her dad began researching his best legal, tax, and financial options for the cabin just over 5 years ago. “At one point, we thought, ‘’Why don’t you just sell it to us?” she remembers,” but he explained that he’d already had a conversation with a tax expert and it was clear that it had to go into the will.”

Now she and her brother have ample time to discuss their own plan for the family cabin once it is passed to them.

Power of attorney 

If you have more than one child or interested hair, Sarvela says it’s imperative that you designate someone power of attorney or durable power of attorney.”it’s one of the 1st questions I’m going to ask when dealing with a lake property in this situation.”

A power of attorney is a written document that allows someone to act on another person’s called the principal behalf in a variety of transactions. Generally, it ends when the principal dies or becomes incompetent. A durable power of attorney operates much the same way but is most popular with real estate or healthcare because it allows someone to handle a principal’s affairs after a specific event occurs like a disability so that the principal doesn’t find him or herself in a vulnerable position or their estate locked up in probate.

 Sarvela says this one act, while often not an easy choice to make, can alleviate a lot of hurt, anger, and confusion among family members who are interested in the cabin (the 2011 movie, the descendants, has a nice subplot that showcases the workings of a power of attorney, played by George Clooney, who is trying to navigate the demands of his extended family with long term environmental and real estate interests).

 Identifying a power of attorney is particularly crucial in large families because there will undoubtedly be a variety of desires among the airs. Some will want to sell. Some will want to buy in period someone like to buy in but can’t. Some will just want to use it with no ownership.

“The more children there are, the more complex it gets,” says Sarvela.” for this scenario to be successful everyone needs to feel that their interests are respected and, hopefully, heirs can be on the same page.”

Arguments will happen. But if a power of attorney has been appointed, then he or she gets the final decision.

Memories – and money

Your mom learned to swim there.  You learned to swim there. Your kids are learning to swim there.

Memories and their accompanying emotions are understandably tied to your family cabin.

Don’t let them outweigh the Practicalities of your financial situation, or that of your heirs.

“Remember that this is a business transaction,” caution’s Sarvela. “Respect your emotions, but you should have a good, 3rd party person who is your advocate but not attached to your property.”

If you’re selling, work with a relative. They’ll know the tough questions to ask like: what are the lot lines?  Are there any lake association restrictions?), and what the current, local market conditions are.

“The lake home market in Alexandria, for example, is very different than the lake home market in Duluth,” says Sarvela. “you have to know your local market.”

If you are gifting the cabin, work with a lawyer and/or tax professional, like Tomlinson’s dad did. Having the cabin’s immediate future figured out removed much of the burden for the 2 siblings of caring for an older structure and other lake specific responsibilities (docks, boat maintenance, storage, scheduling visitors).

Keep an open mind

If there is one thing a cabin owner should know, it’s this: things change.

One year, you’re hitting the water on an 80-degree Memorial Day. The next year, it’s July before you get to spend your 1st weekend at the lake.

The same flexibility required to whether a Minnesota summer is needed to roll with the ups and downs of being a cabin owner or inheritor.

Even though your kids have signed on now to take care of the place, perhaps one of them loses their job? Or suffers a disability? Or wins the lottery and wants an upgrade? Or outgrows the size of the current cabin?

Whatever happens, it’s important to keep an open mind about what cabin ownership really entails and if you’re up for the challenge, advises Tomlinson. Even when she’s not there, she finds herself fielding calls from her brother, extended family, and friends about open slots at the cabin. Then there is the financial responsibility and the long-term care required to upkeep an aging, seasonal cabin. 

“My brother and I are both still open to the idea that if it becomes burdensome, we may talk about getting rid of it,” she says, before adding, “but it’s hard to think of that.”

In the meantime, it’s a pretty good problem to have.

By Patricia Carlson. This article first appeared in the August 2013 issue of Minnesota Good Age.