Archives for July 2010

Estate Planning for Vacation Homes

There are a variety of options available to provide for the orderly transfer of the family Vacation home from one generation to another, some of which may be successful in protecting the property from being lost to the TAX MAN upon the death of the senior generation.
1. Sale to the next generation, although there may be some Capital Gains Tax if the property has been held for some time.
2. A simple bequest can keep the property in the family but there may not be any tax savings .
3. A Qualified Personal Residence Trust may be useful. The Grantor retains the right to continue to use and control the use of the property for a defined period and unless he dies during the period, the value will not be in his estate.
4. A family Limited Liability company (LLC) will limit liability of the owners if someone is injured on the property and affords the senior generation a vehicle for transferring ownership over a period of time to the next generation.

Passing property to the next generation often results in dividing the pie, so to speak, into ever small pieces, often with differing percentages of ownership. Whatever approach is used, it is important to to provide a means for individual owners of ever smaller portions to sell their interests at fair rates to other members, using, for instance, at least two appraisals to reach a fair value of the share at issue.

MSU Workshop on Oil and Gas Leasing June 24, 2010

At the invitation of the MSU Extension Service, I was a presenter at a Workshop held at the Haggerty Center in Traverse City of June 24 on the subject of Oil and Gas Leasing in light of the current excitement regarding the Utica Shale. I invite you to go to MSU’s Grand Traverse County Portal at http://www.msue.msu.edu/portal/default.cfm?pageset_id=27320 for the several papers presented including the outline of my comments as an attorney who represents only Landowners in Oil and Gas matters. In short, my position regarding leasing was that the landman who may contact a landowner IS NOT THE LANDOWNERS FRIEND, that contrary to what the landman may say, THERE IS NO SUCH THING AS A STANDARD LEASE and that taking the high sum b being offered as a BONUS on the terms proposed by landman is usually not be in the best interests of the landowner. Papers by representatives of MSU that my be retrieved from the MSU Portal detailed the fine points of oil and gas leasing as well as the risks associated with merely accepting what the landman may offer. Each is worth a landowner’s review to be better educated on the fine points thereof.