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Fred Lum/The Globe and Mail

Inheriting a cottage is an enviable situation. However, there are potential pitfalls that go beyond black flies and sunburns.

Unexpected costs can be significant, including probate fees, capital gains tax and land transfer tax.

Elaine Blades, director for estate and trust products and services at Scotia Private Client Group, says there are many things families need to talk about before a cottage is handed down. Will the cottage be gifted now, bequeathed or sold? Will the best legal structure be joint title, sole ownership or a trust? And what about insurance strategies and tax exemptions?

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Cottage succession touches all aspects of wealth management planning and those plans must be aligned. For parents, there can be implications for retirement income and philanthropy. For children, what exactly are they taking on and how does that affect the wealth they are in the process of building for their family?

"When it comes to the cottage or cabin, family members are usually emotional stakeholders. So for a plan to succeed, it is essential to share and discuss openly," Ms. Blades says. "It's all about discussing, planning and seeking the right expert advice. By starting the succession conversation, adult children often find they're doing their parents a favour. Have the discussion and have it now."

Ms. Blades joined us on Tuesday to answer your questions on bequeathing or inheriting a cottage. You can read a transcript of the discussion below.



Read more: Cottages

  • Is a cottage a good investment?
  • Handing down the family cottage
  • Canada's largest home hits the market
  • Izzy Asper’s ‘one of a kind’ Florida mansion on the block
  • Madoff's Long Island beach getaway put up for sale






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