Host: Dave Specht, National Development Manager for Family Dynamics, Wells Fargo Private Bank
Guest: Suzanne Mansell, Family Dynamics Consultant, Wells Fargo Private Bank
Many families have vacation homes or second residences that represent childhood memories and meaningful time spent together. The parents wish to pass such properties on to their children and to perpetuate that legacy with their children and grandchildren. But sharing family properties that are intended to strengthen and to unify often can create unexpected rifts. So how can families best meet these challenges while maintaining family harmony?
I’m Dave Specht, the Family Dynamics National Development Manager for Wells Fargo Private Bank, and I’m joined by Suzanne Mansell, Family Dynamics Consultant with Wells Fargo Private Bank.
Suzanne, we’ve all heard stories of the family discord that may arise when siblings and cousins are put into shared ownership of a legacy family property. What are some of the main challenges and how might they be avoided?
Well, Dave, it’s quite common for families to want to pass along legacy properties to their heirs. And it is typical for them to run into challenges like agreeing on who can use the property and when to use the property. There are also different opinions when it comes to paying for maintenance or even paying for property taxes. These are all things the next generation never had to worry about before. They typically only remember the fun that was associated with the property.
One of the simplest things a family can do is to talk about and to create a process for how the property gets used, how it gets paid for, and how owners can sell their portion.
You’re right; that does sound pretty simple, Suzanne. What are some of the other considerations families might plan for?
The most important consideration is to decide which properties the family wants to own and manage together and which properties they do not. For example, one family we’ve worked with had two recreational properties. They wanted their two children to enjoy the use of each of the properties, but they also didn’t want to overcomplicate ownership of the properties. In this instance, the mountain cabin was used frequently by the brother and the beach house was used most often by the sister. The values of the properties were significantly different, but the family decided that it would be best for the brother and sister to own the properties separately but to share usage of the other’s property a couple of times per year.
So in that case, the family actually decided against shared ownership but for shared usage and agreed that it would be better for the relationship of their children as well as simplify the property management. That makes a lot of sense to me.
Yeah, in that case it did make sense not to force them into shared ownership. Each could still use the properties but would not have to consult with each other on maintenance decisions. For families that choose to share ownership, it’s crucial that current and future owners have a voice when it comes to their desires and concerns about managing the assets in the future. Creating an agreement and revisiting it regularly can help avoid some of the hard feelings that can arise from these situations.
Those are some simple but meaningful suggestions. Thanks for sharing those with us, Suzanne. To learn more, contact your Wells Fargo Private Bank relationship manager. And thank you, listeners, for joining this podcast.
Wells Fargo Private Bank provides products and services through Wells Fargo Bank, N.A. and its various affiliates and subsidiaries. Wells Fargo Bank, N.A. is a bank affiliate of Wells Fargo & Company.
Brokerage services are offered through Wells Fargo Advisors. Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.
Wells Fargo Bank, N.A. offers various advisory and fiduciary products and services including discretionary portfolio management. Wells Fargo affiliates, including Financial Advisors of Wells Fargo Advisors, a separate non-bank affiliate, may be paid an ongoing or one-time referral fee in relation to clients referred to the bank. The bank is responsible for the day-to-day management of the account and for providing investment advice, investment management services and wealth management services to clients. The role of the Financial Advisor with respect to Bank products and services is limited to referral and relationship management services.
Wells Fargo & Company and its affiliates do not provide legal or tax advice. Please consult your legal and tax advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your tax return is filed.
© 2010–2020 Wells Fargo Bank, N.A. All rights reserved. NMLSR ID 399801 Equal Housing Lender.