With summer imminent, many Mainers and those “from away” will be heading to their camps or vacation properties for relaxation and recreation. Frequently, these camps are legacy properties that have been used by families for generations providing an important family tradition and shared memories. As time passes, the number of family members who wish to use the camp may increase significantly. Unfortunately, a traditional estate plan will likely not address all issues regarding ownership and use of the camp that may arise.
The creation of a family camp Limited Liability Company (LLC) is a succession plan that can meet the objectives of the original owners. The LLC will also provide a framework for maintenance and use of the camp in the future. The LLC becomes the title holder to the family camp. An operating agreement created by the members (owners) of the LLC will govern the camp’s management, scheduling, and transfer from one generation to the next.
Used properly, the family camp LLC creates a democratic ownership structure which can require members to vote on everything from buying new screens for the porch to allowing non-family members to use the camp. Alternatively, if there are multiple family groups, it can create a family committee to make those decisions based on a vote from each group. An LLC can also contain a fair and perpetual camp sharing system that respects family customs and is clear on how time is to be divided among family members. Perhaps its greatest benefit is that it can allow the senior generation or the original owners to retain control over virtually all of the camp’s operation while gifting membership interests in the LLC to other family members during their lifetimes.
If you are a parent planning on passing the family camp to your children, or thinking about acquiring a camp or vacation property to benefit future generations, contact Rudman Winchell to discuss the creation of a family camp LLC.