Create a Master Plan: Before anything else, have an honest conversation about whether there’s an interest in keeping the home. After crunching the numbers, it might not be desirable or feasible, said Michael Liersch, director of behavioral finance for Merrill Lynch Private Banking & Investment Group, in a paper the group published on the topic.
Even if there is no mortgage, there are taxes and maintenance costs. Plus, there’s the cost of traveling to and from the home to use it, he said.
If everyone is still game, create a master plan for the home, detailing its long-term future and how it will be handed down, Goffe said. For example, decide if the home is to be a place of solitude or used for frequent entertaining. Discuss any plans to develop the property further.
Some cabins are locked in time, but eventually, people may want modern conveniences, Goffe said. That costs money — and can make an inheritance more of a financial commitment than the parents ever expected. “Mom and Dad thought the kids would just maintain (the house), but they were thinking about the outhouse and a septic system, not Wi-Fi, a helicopter landing pad, whatever they might need,” Goffe said.
Also, it might be a good idea to discuss the idea of renting out the home when it’s not in use. A recent report from HomeAway, an online marketplace for vacation rentals, found that vacation rental owners were able to make, on average, $1,778 for a weekly rental over this summer.