How to Share a Cabin | A Guide to Co-Owning a Cabin or Cottage

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The Ultimate Guide to Sharing Cabin Ownership

Here are the three main challenges faced by cabin co-owners and how to tackle each:


Photo: Shaun Montero on Unsplash
 
Cabin memories are often one of the most cherished things for a family to share. Cabin finances however, not so much. Cabins tend to devour dollars, and when one person isn’t chipping in financially, the inequities can cause family rifts and resentment.

For example, when Joe Williams decided to fix up the Vermont cabin he co-owned with his uncle, Williams says he put in new plumbing, fixtures and appliances, renovated the bathroom and kitchen, replaced the roof, installed nine windows and new carpeting, put in a deck and gave the place a coat of paint, inside and out. When he totaled the costs and asked his uncle for a little financial help, he says his uncle handed him a $100 bill and said: “This is for nuts and bolts.” (In fairness to his uncle, Williams says he did get much more use out of the cabin.) But when Williams went to sell the cabin, he had to split the proceeds evenly with his uncle.

Here's another example:
 
Call him K.C. Just K.C. He wants his initials changed to protect his identity. Don’t reveal where his cabin is located, either. “Just say mountains.”

His voice grows hushed. “You’re talking some real damage control if this gets out.”

K.C. wrote a letter – published in a long-ago issue of Cabin Life – begging readers to help him out of a fix: He inherited a cabin with his brother and sister. They’re all chipping in on the major costs. His sister is putting extra money into the property.  But she also wants more than her share of time in the cabin.

And K.C. is not alone.

Maybe it’s a Baby Boomer thing. Their generation’s parents are passing on unprecedented wealth, which sometimes includes second properties. So it turns out that many families are facing the same challenge: multiple children and grandchildren inheriting the family cabin. And that cabin may very well carry with it some of the fondest memories of childhood – and family bonding. But just as a cabin can enrich a family, it can also be a catalyst for problems. When the second generation inherits the cabin, disputes over the shared cabin can cause family conflict.

Because people are so emotionally invested in their cabins, it’s no wonder that these getaway homes can be such touchstones for family harmony. The value of the cabin is measured in much more than dollars.Ironically though, it’s money issues that cause the most dissent. But there are other issues, as well.

Challenges faced by cabin co-owners fall generally into three categories: 

•  Money: Who’s paying expenses, mortgage costs, taxes, general fund costs. What to do if one partner wants out – or dies? Do the partners share similar goals about how long they plan to keep the cabin and how they view it financially and for tax purposes?

•  Maintenance: Who keeps up the cabin? Should some family members who rarely use the cabin shoulder an equal share
of the maintenance burden?

•  Scheduling: How do you determine who gets to visit the cabin when? Are friends allowed? Will it be rented out?
 
Let's take a deeper look:
 

Money, Legal, and Maintenance Matters

 
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Families approach these issues in many different ways. While some families draw up 40-page legal agreements spelling out everything from who pays the bills to what’s allowed in the refrigerator, others try to agree among themselves, often using one family member as arbiter.

Although some cabin owners bristle at the idea of bringing in lawyers for family issues, experts say a contract can provide a plan that anticipates – and even avoids – conflict. Many families outline specifics in an original trust. Others use Tenants in Common agreements that spell out issues regarding ownership: scheduling, default on loan issues, housekeeping, owners’ right to sell, manager/rental issues, how bank accounts are held – anything the owners want to nail down in writing.

Experts caution that such agreements are best drawn up with an attorney from the state where the cabin is located, as laws vary from state to state.

But a cabin trust fund may not be an option. And frequently, siblings come to the table with different bank accounts.

Trading Maintenance for Money

Carolyn Barr’s family has owned their cabin in Huntington Lake, Calif., since it was built in the late 1800s. For the first 23 years of her life, Barr spent every summer there, all summer, never returning home until she had to go back to school.

“When Mom and Dad were alive, they never turned anybody away,” she says. When they died, they left the cabin to Carolyn and her three siblings. But one summer, Barr found herself uninvited when all the other family members went to the cabin. She believes she was excluded in part because she can’t afford to contribute financially as much as her siblings do.

“I told my sister how broken-hearted I was,” Barr says.

Barr decided to pitch in more on maintenance to try to make up for her inability to share all the bills. Several other families interviewed for this story work out money problems in the same way, assigning the person with the smallest monetary contribution other tasks – maintenance, scheduling, accounting.

Five-Year Grace Periods

Others take a tougher stance. Passing his Northern Minnesota cabin to four children, the Rev. Ken Lister added a provision in his trust that gives a family member a five-year grace period if he’s not chipping in. This is to cover unforeseen hardships the partner might encounter.

But if the partner no longer helps out after five years, he forfeits his ownership in the cabin. Lister says this solution might appear harsh, but his heirs agreed it would be the fairest way.

The Listers discussed every aspect of their trust before drawing it up.  Co-owners should approach their partnership by having an honest discussion about how much time each party uses the cabin, who should owe how much, and what alternative solutions might exist for those of lesser means.

Divide by Use

For those families in which siblings are able to share the financial obligations, they can draw up a contract where the family members agree to assume a portion of the fixed costs – taxes, insurance – and the variable costs – gas, heating, maintenance.

Sometimes those finances can be divided according to how much time a family member spends in the cabin. Jim Fergus’s family has taken those two types of costs and divvied them up, not equally, but according to “people days.”

A family accrues one “people day” for every day a person in their group uses their Michigan cabin. This includes guests and children. Each family gets charged their share of fixed costs and variable costs according to their percentage of “people days” each year.

For example, a sibling who is single and doesn’t use the cabin for a year gets assessed nothing for variable costs and only a small portion of fixed costs, while a sibling with a big family that uses the cabin frequently pays more of the expenses.
 

Scheduling


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While some families find their greatest conflict comes with maintenance issues, others put scheduling at the top of the list. Remember K.C.’s problem with his sister using the cabin more than everyone else? Well, it’s so common that some cabin owners have an actual term for it: Cabin Hog.

Rotating weeks works best for many families. When more than two cabin users are involved, however, some families must come up with more complicated arrangements.

The owners of a log cabin in northern Wisconsin recently drew up a will to pass the cabin on to their five kids. They drew up a scheduling system in a formal document outlining the need for a Limited Liability Company (LLC).

The system reserves the cabin for seven weeks each year for family gatherings and maintenance. The remaining weeks are assigned on a rotational basis and run from Friday afternoon to Friday afternoon. The order of the rotation changes each year for five years, then returns to the original year.

The Lister family in northern Minnesota has a different rotation method. Each year, a different family gets to pick when they want to stay in the cabin, which is co-owned by four family members. One family gets top pick one year, then moves to the bottom of the list.

It’s all spelled out in the trust.
  
“I wanted to put it in writing because that makes it clear you’ve got a plan,” says the Rev. Lister.

Other families don’t put the schedule into writing – or don’t see the need for getting lawyers involved. With 12 children and 12 grandchildren sharing a cabin located on an island in Maine, the Abbe family might well expect chaos.

But they have one family member who acts as master scheduler. And the days in the cabin are doled out on a first-come, first-served basis. They’ve never felt compelled to put it in writing.

“It’s all very Maine,” Steve Abbe says. “It’s a totally different set of standards and lifestyle. The state of Maine slogan is ‘The way life should be.’ ”
 

Maintaining Relationships

Photo: Tyler Nix on Unsplash
 
K.C., in contemplating how to approach his sister, wrote: “There must be a way to make this work and still maintain a loving relationship.”

The good news is, there is.

Dr. L.B. Wish, a Florida psychotherapist and professor of conflict resolution, believes there are probably several solutions to K.C.’s problem.

She suggests that he meet with the siblings and list all the “prime times” each family would like to use the cabin. Then ask the sister how she thinks the time should be divvied up for the coming year. The schedule should be renegotiated each year.

“Usually the person who likes to be in control also tends to focus on what she thinks is fair,” says Wish. “By addressing her first, she voices her agenda and will tend to be more generous when she has control. Then, if she is happy, the unrest decreases.”

The most important thing is to address the issue and discuss it in a loving and solution-oriented way. Exploring creative solutions to a potentially divisive issue could end up making the family closer. It just takes communication and compromise – and a plan.
 

Planning Ahead

What happens if one partner in the cabin wants to sell?


For partners who want to sell their portion while they’re still alive, many families feature in the legal agreement a buy-out clause, which includes provisions for how to determine fair value for the property.

Ideally, the owners agree on a modest price, allowing their partners the flexibility to buy them out. Cabin owners may also wish to protect the property against the death of their partner by taking out life insurance on each partner in the cabin. The policy names the remaining cabin owners as beneficiaries and affords them the money to buy out the descendants of the relative who died.

The same principle can apply to other aspects of sharing a cabin. Because partners don’t have as much control over the property as sole owners, partners might build as many firewalls as they can. For example, getting replacement insurance and taking out an umbrella policy to protect yourself if a partner’s friends hurt themselves on the property and sue you all.

A lot of family issues can be avoided on the front end if parents passing down a cabin try also to self-fund it by leaving behind money dedicated to a cabin trust fund.
 

Bonus! Conflict Resolution

Guidelines to help a family at odds work together


Not every family can hold it together as peacefully as the Abbe family of Maine. Many discover the need for legal protection only when it’s too late. For those, specific steps can be followed to resolve the conflict as peacefully as possible. Dr. Wish offers a few steps:

1.  Assemble the family. Express respect and admiration for how everyone is trying to work together.

2.  Express how new, and difficult, it’s been to deal with a hot issue and how everyone has really tried to be fair and understanding.

3.  Compliment each person for a personality trait so that you’re actually, in a kind way, stating what you wish the person to do. An example: “You know what I like about you, Tom (who has been mostly silent)? You ponder things. You don’t rush. But I feel we’ve short-changed you in expressing your ideas. What solutions do you have regarding…”

4.  Avoid family members complaining and accusing each other by having each person ask the others for help and solutions to solving each person’s problem.

5.  Stay focused on this process. If you’ve agreed upon a leader, have him establish guidelines such as: no name calling, no shouting, no accusing, no digging up the past. You may consider using an egg timer to give everyone a talking limit.
 

Legal Terms to Know

Joint Tenancy: An ownership interest in property shared with one or more persons. This form of ownership entails a “right of survivorship,” meaning that in the event of the death of one joint tenant, the other joint tenant(s) acquires the deceased joint tenant’s interest.

Tenancy in Common: A form of joint ownership without right of survivorship, meaning that on the death of a co-tenant, the decedent’s interest passes according to the decedent’s will or other dispositive mechanism.

Irrevocable Trust: Created during life or at death, it contains a set of written instructions to a trustee on how to manage property for the benefit of a grantor’s children and other beneficiaries and how to eventually, if ever, transfer ownership of the property. A Revocable Trust is also known as a Will Substitute and can be revised by the grantor until the grantor’s death.

Limited Liability Company (LLC): An entity created under state law that can combine the characteristics of a corporation and partnership. Generally considered the most flexible legal entity for purposes of management.