Are there any estate planning benefits in purchasing fractionals?
Yes. Owners of vacation homes sometimes find that they have inadvertently created difficult situations when passing ownership of vacation homes to their children or grandchildren. Conflicts sometimes arise between the new co-owners over finances, usage and responsibilities. Should we sell and take cash or hold for future generations? Who will get the use of it and when? Who will manage the finances and perform maintenance? Who is willing (or able) to pay for operating, maintenance and capital improvement costs? Many of these issues can be resolved through fractionalizing the ownership of the property. For example, each child may be deeded a separate fractional interest in your unit (assuming you own more than one fractional interest.) Each child is free to use, sell, mortgage, rent, or trade usage rights to his/her fractional unit as he/she pleases. All maintenance and management issues are handled professionally. This resolves many of the common conflicts that may arrise in a co-owner
