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For many families, a beach house is more than a piece of real estate. It is where summers are spent, traditions take root, and memories are made across generations. Without careful planning, however, passing these family properties down to new generations can become one of the most complicated and emotional transitions for a family already mourning a loved one.

Unlike financial accounts or investment portfolios, a vacation property is not easily divided, and inheritance comes with ongoing costs, scheduling decisions, and personal associations that can frustrate even the closest families. Without a clear plan in place, shared ownership often creates friction that erodes both relationships and the value of the asset itself. The families who navigate this transition most successfully are typically those who address the practical details long before the property ever changes hands.

The good news is that estate planning offers a range of effective tools for passing down a vacation property that preserve your intentions and give your family a workable framework for the years ahead. The key is addressing two core questions early: how the property will be used, and how it will be financed.

Start With the Right Structure

Before addressing the details of use and cost, it is worth considering how the property will be held after your passing. The ownership structure you choose shapes everything else, including how decisions get made, how the property is protected from liability, and how beneficiaries can exit if circumstances change.

Two structures are most commonly used for family vacation properties:

• A trust allows you to set specific rules for how the property is managed, used, and eventually transferred or sold. The trustees, whether you select family members or add a neutral professional, are responsible for carrying out those rules and resolving disputes when they arise. Trusts can be designed with considerable flexibility, allowing Trustees or other “trust protectors” to adjust certain terms by agreement over time.
• An LLC (limited liability company) is another option, particularly when the property may be rented occasionally or when liability protection for other inherited assets is a priority. An LLC can be structured with an operating agreement that governs decision-making, cost-sharing, and ownership transfers in much the same way a trust does.

Some families use both structures in combination, with the property owned by the LLC and the separate family trusts owning the LLC.

The right choice depends on your family’s situation, the nature of the property, and your broader estate plan. An experienced estate planning attorney can help evaluate which approach best fits your goals.

Planning for Use: Who Gets the House and When?

One of the most practical contributions a well-drafted trust or LLC agreement can make is a clear system for scheduling use of the property. Without one, even well-intentioned families find themselves in recurring conflict over scheduling access for holidays and peak summer weeks.

A rotation system is a common and effective solution. Each beneficiary or member receives a designated period each year, with the periods rotating so that no one family consistently holds the most desirable weeks. Additional rules can address the length of individual stays, notice requirements, and what happens when a beneficiary does not use their allotted time.

Some families also want to preserve specific traditions tied to the property. For example, one child’s family may prize the last weeks of August before school resumes, while another may want to ensure they can continue a longstanding Fourth of July tradition. In those cases, the agreement can set aside key dates each year rather than rotating them, ensuring the most meaningful times are protected for each sibling.

The goal is to remove as much real-time negotiation as possible. Decisions made in advance, while everyone is calm and the parameters feel fair, tend to hold up far better than those made in the moment when emotions are heightened and competing priorities are involved.

Planning for Finances: Who Pays and How?

Shared vacation property comes with real ongoing obligations: property taxes, insurance, utilities, routine maintenance, and periodic capital repairs or improvements. When these costs are not clearly assigned, they become a reliable source of tension.

A trust or LLC agreement can address this directly by establishing how expenses are allocated among beneficiaries or members, whether equally or in proportion to actual use, and by creating a reserve fund to cover recurring costs. Building that reserve into your estate plan from the outset, along with a framework for replenishing it, removes the burden of ongoing financial negotiation from your beneficiaries.

The agreement should also address how larger decisions are made and funded, such as major renovations or capital improvements, and specify what level of consensus is required before those expenditures are approved.

Building In Flexibility: Supermajorities, Buyouts, and Appraisals

One of the most valuable things a well-drafted agreement can do is give beneficiaries a clear process for adapting to changing circumstances, without requiring unanimous consent for every decision.

As interests are divided among successive generations, a supermajority requirement ensures the group can move forward on major decisions without needing every member on board. This applies equally to significant financial decisions, changes to the use schedule, or a potential sale of the property.

Buyout provisions are equally important. If one beneficiary or member no longer wishes to participate in shared ownership of the vacation property, the agreement should outline a clear exit process: how the property will be valued, whether one appraisal suffices or multiple are needed, and how the remaining beneficiaries will fund the “purchase,” whether through personal resources, financing, or other inherited assets.

Families may also want to consider how and when ownership interests can pass to a beneficiary’s children, and whether spouses are included or excluded from that process. These are decisions best made at the outset, when the conversation is straightforward rather than emotionally charged.

When Should You Sell the House Instead?

Not every family is positioned to share a vacation property successfully, and a well-designed estate plan should acknowledge that honestly.

If ongoing shared ownership is likely to generate more conflict than it is worth, directing that the property be sold so that the proceeds are distributed is often the most sensible path. This approach removes the need for ongoing coordination, eliminates the financial obligations of shared ownership, and provides each beneficiary with a clean and liquid share of the asset’s value. No matter how sentimental the property may be, preserving family relationships is often worth more in the long run.

Directing an independent trustee or personal representative to oversee the sale ensures that the process is handled fairly and at arm’s length, without placing any one family member in the position of managing an emotional transaction.

For strategies on distributing other meaningful assets, see our post on how to distribute sentimental items in an estate plan.

The Value of Planning Early

The decisions involved in passing down a vacation property are far easier to work through before the property changes hands than after. Defining the goals, starting the conversation, and building a clear structure while everyone is present and aligned gives your family the best possible foundation for whatever comes next.

At Sessa & Dorsey, we help clients think through these questions carefully and build them into a comprehensive estate plan that reflects their goals and their family’s needs. Whether the right answer is a structured shared ownership arrangement or a thoughtful and equitable sale, we work to ensure the transition is clear, fair, and as smooth as possible.

To discuss how your vacation property fits into your broader estate plan, contact Sessa & Dorsey at (443) 589-5600 or schedule a consultation