One of the questions I am asked in my travels, is "What is the best way to plan the gifting of our family bach?" and today it was on my mind as I made my way to the beach to visit the grandkids.
There's a whole range of issues to think about before answering that question.
The main issue is that, although the government treats a bach as an investment property, often it's either been in the family for generations or it is your intention that it becomes a gift to future generations. So it doesn't really hold investment value - it's more about heritage.
The sorts of considerations you might face in working out how to preserve the bach include:
The point is that every family's circumstances are unique to that family and a one-size-fits-all approach, isn't going to necessarily be the right solution for your family.
One example that springs to mind is a recent case of mine where the family was struggling to work out what to do. In that case, my client had promised Mum and Dad that he would keep the bach he had inherited for use by future generations of the whole family (including his brothers and sisters) but my client owned the majority of the property, so property ownership didn't quite reflect this promise. My client's accountant had advised him that he should set up a family trust to own and manage the family bach. While it is one approach which can work, it was not quite the right fit for my client.
My client owned the majority of the property and wanted to continue to do so. All he wanted to do was make sure that his parents'wishes that future generations of his and his siblings' families could enjoy the use of the property were documented appropriately, while retaining majority ownership by him or his children. Working together with his accountant, and the other owners, I was able to achieve a more suitable and more cost effective solution to the problem.
Ultimately in these sorts of situations, you do have to realise that your commitment to the future use of the bach may differ to the intentions of future generations and there really is only so much you can do. Ruling from the grave, so to speak, has its limitations.
But if your family sees the care and attention you put into the planning for the bach and your family's future, that often translates to a greater understanding of its significance. The same applies to all of the assets you have strived so hard to obtain.
I'd love to hear your comments on the subject of preserving the bach for future generations.
On that note, its time to get back to the beach with the grandkids for epic sandcastle building while the sun is out to play!
Trish likes to do her thinking while she drives - what a perfect combination for a mobile lawyer!
This blog shares those thoughts.
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