25 Aug Your Family’s Beach House: How to Keep It in the Family Without Tearing the Family Apart
A client told me something I hear often from families with shore property: “Once you give up property on this island, you’re not coming back. It’s a one-way exit.” He and his wife love the house. Their kids love the house. Their grandchildren are growing up there. They want it to stay in the family.
But he also watched his cousins fight over an inherited beach house for three years. Nobody could agree on repairs, nobody could agree on who paid what, and nobody could agree on whether to sell. The house was eventually sold at a deep discount because the family couldn’t function as co-owners. He didn’t want that for his kids.
This is the tension. The property is worth keeping. But two or more children have to share it, pay for it, and make decisions about it together for the rest of their lives. Without a plan, that’s a recipe for family infighting (and, in some cases, lawsuits) between siblings.
The Decision That Comes First: Can They Sell It?
The first question: can your children sell the house or must they keep it? There’s a spectrum here. On one end, you can express your wish (without requiring) that the house stay in the family. It has no legal force. It’s a suggestion, nothing more. On the other end, you can lock the property in trust with a prohibition on sale, subject to narrow exceptions like a natural disaster, condemnation, or a serious medical need where all other resources have been exhausted.
Most families I work with land somewhere in the middle. A common approach: no sale for a set period (until your youngest grandchild turns 25, or for 20 years after the second death), then the restriction lifts and the children decide for themselves. This gives the grandchildren their childhood at the shore, then hands the decision to the people who have to live with it. It avoids a rule written in 2026 binding people in 2075.
Who Pays for It
Every year the house costs money: property taxes, insurance, maintenance, utilities, repairs. If nobody plans for this, one child ends up carrying the cost and resenting it. The fix is a reserve fund that belongs to the house, not to either child. You fund it from the estate, either carved off the top before the split or funded by a portion of the life insurance proceeds. Rental income flows back into it. The trustee pays the carrying costs out of the reserve.
At a 4% draw, a $400,000 reserve produces about $16,000 a year. Combined with six weeks of summer rental income, that’s typically enough to cover taxes, insurance, and routine upkeep for a shore property. If the reserve runs out, the trust should spell out what happens next: both children chip in equally, the house rents more weeks that year, or the sale restriction lifts.
Calendar, Use Rules, and the Awkward Questions
Decide now how the calendar works. Rental weeks come off the top first, enough to keep the house funded. What’s left is family time, split evenly, with an alternating pick order so neither family always gets the Fourth of July. Set a deadline for picking weeks. Miss it, you pick from what’s left.
The house rules are straightforward: nobody lives there full-time, nobody uses it as a mailing address, nobody borrows against it, you leave it the way you found it. Capital improvements over a threshold (say $10,000) require both children to agree. Under that, the trustee handles it.
Then there’s the question families don’t want to ask. If a child divorces, does the son-in-law or daughter-in-law keep using the beach house? In most plans, use rights follow your bloodline. A son-in-law’s access ends at divorce, and ends at death unless they’re raising your grandchildren.
The Trust Structure
The property should be held in trust, not passed outright. An outright transfer puts the house in your children’s individual estates, exposes it to their creditors, and makes it vulnerable in a divorce. Holding it in an irrevocable trust (or a sub-trust within your family trust) keeps it protected. The trust owns the property. Your children have use rights, not ownership. For the difference between revocable and irrevocable trusts, see Trusts: Revocable vs. Irrevocable.
And the trust has to be funded properly. It does not good to create the trust, put in the language about the beach house, and then forget to transfer the deed. The house is still in the parents’ names when they die, which means it goes through probate and the trust provisions don’t control it. For why this happens and how to prevent it, see Why Your Trust Might Fail.
Keeping It in the Family
This is planning that requires thought, conversation, and decisions that feel premature when everyone’s healthy and getting along. But that’s exactly when to make them. The families that do this well aren’t the ones with the fewest disagreements. They’re the ones with a plan that handles disagreements before they become permanent.
Does Your Estate Plan Address Your Family’s Property?
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Related Reading
Trusts: Revocable vs. Irrevocable. Understanding which trust structure protects family property from creditors, divorce, and estate taxes.
Why Your Trust Might Fail. A trust that isn’t funded properly won’t protect