| It's important to note that when "giving away" an | | | | when there are minimal or no capital gains taxes |
| item such as your cabin or cottage to your | | | | to be incurred. |
| children, despite your purest intentions, it can | | | | You can make your children "joint tenants". In |
| quickly become an enormous tax burden for the | | | | such as case you and your children share an equal |
| recipient/s. | | | | ownership of the property, and the property is |
| Here are some different options to discuss with | | | | considered to have one owner: parents and |
| your children, a lawyer and a tax specialist to | | | | children collectively. The property can be passed |
| determine the best solution for you and your | | | | directly to the joint tenants without paying |
| family. | | | | probate fees, but capital gains are still triggered. |
| You can "gift" your cabin to your children now. | | | | You might consider transferring your cottage to a |
| This option will still trigger immediate taxable gain | | | | "living trust". This is an option available to persons |
| based on fair market value, but any additional | | | | over the age of 65. In such a case you would no |
| capital gains can be held off until the children | | | | longer own the cottage, but you'd still have |
| dispose of the property on their own terms. For | | | | control over it and benefit from it. At the time |
| this transfer, owners will need to secure a "life | | | | the trust is created, there are no capital gains |
| interest" clause in order to have the rights to be | | | | payments or probate fees. The trust will provide |
| able to use it and to protect it from being sold | | | | shelter from capital gains for up to 21 years. |
| while they are still living- that is, if they still want | | | | In the case where the property in question is on |
| to use it and/or live in it. | | | | the larger side and to be passed down to many |
| You can also "sell" your cabin to your children now. | | | | family members, there is the option of establishing |
| This way you can free up capital for other | | | | the cottage as a "non-profit organization". In this |
| pursuits and although capital gains still have to be | | | | case, members pay dues for access to the |
| paid, your children will avoid the probate costs. | | | | property. Also successive generations can use the |
| Also, it can be sold incrementally which will help | | | | property without paying capital gains tax or |
| break up the annual capital gains, and make the | | | | probate fees. Capital gains will likely be triggered in |
| purchase more financially accessible. | | | | the initial transfer- but these can be filtered into |
| The "simple bequest" is a standard option | | | | the "member fees". There are also ongoing |
| whereby when the owner passes, the property is | | | | accounting fees to consider as an accumulative |
| left to the children in a will. This is a good option | | | | expense. |
