How do you protect your family cottage?

    Ah, life is good.
    Idyllic summer days spent at your lakeside cottage with the children and grandchildren create memories you hope will last throughout their lives.
    And it's an experience you hope you can pass on to the future generations of your family.
    "That's great in theory," said local attorney Richard Arnold, who with his partner John Prelac, specializes in cottage law at Day Ketterer in Canton. But transferring your lake property to the next generation requires thought and planning to ensure the best results.
    The attorneys recommend forming a Family Cottage LLC or limited liability company.
    An LLC provides guidelines to deal with problems that may arise when there are multiple owners of a company.
    What happens when four children are given a cottage, Arnold asks, and one lives in California, another can't afford it, and another has no desire to use it.
    Is the fourth left with maintenance costs and taxes or is it sold even though that is not what the fourth child wants?
    An LLC, said Prelac, anticipates disputes.
    It can create a lottery to dole out the best weeks of the summer and provide a schedule for who uses it in the off-season, as well. It can state how the property will be maintained, plus offer liability protection and tax benefits.
    "It's important to talk to the next generation," said Arnold. "Sit down and make sure everyone is on the same sheet of music."
    It's usually important to the parents, they said, to keep the property in the family bloodline. That means using the LLC to protect the cottage from creditors, ex-spouses and lawsuits.
    Another bonus is that once the property is deeded to an LLC, the deed no longer needs to be transferred from generation to generation, which, in turn, saves money.
    One last thing that should always be included, added Prelac, is a dispute resolution process.
    "Make sure that if a dispute arises, it can be settled peacefully," he stressed.