0:12

He served at the Pentagon as an army jag. He graduated from Notre Dame

0:17

and has two law degrees from Boston University and Georgetown University. He's been practicing

0:23

law for over thirty years. He's your family's personal attorney. It's time for

0:30

the David Carrier Show. Hello, and welcome to the David Carrier Show on

0:35

David Carrier. Your family's personal attorney, and you have found the place where

0:39

we talk about a state planning, elder law, real estate and business law.

0:44

Now give us a call at six one six seven seven four twenty four,

0:49

twenty four at six one six seven seven four twenty four at twenty four

0:53

we'll get your question, comment or concern on the air. Yes, it

0:58

is Saint Patrick's Day and we're still here. Unbelievable, right, but there

1:02

you there, there, you have it, So give us a call if

1:04

you would please. Now we we have the Cottage and Lakefront Living show is

1:11

coming up coming up next weekend. We're gonna be there, gonna be talking,

1:15

talking, talking, But if you don't have tickets, or if you

1:18

might have some idea what I'm going to talk about, well, yeah,

1:22

he looked out right. Now you're gonna find out. Uh, so you

1:26

don't have to go and look at all the dock systems and all the gardening

1:30

and have you ever been to that thing, a lakefront living show. It's

1:34

really cool, it really is. And cottage culture, you know, I

1:37

gotta tell you, cottage culture is huge. And we call them cottages.

1:42

In a buddy of mine, I'm describing this and he goes cottages. You

1:48

know, Grandma's have cottages and who else has cottages? I'm like, hey,

1:51

around here, everyone's got cottages. Well, in Pennsylvania call it apparently,

1:56

they call them cabins. So even if it's on a lake, they

2:00

call it a cabin. It's like, yeah, all right, well it's good to have a cabin, but not a cottage. Okay, whatever.

2:07

So if you're talking to your friends from Pennsylvania and you're describing your cottage,

2:12

don't call it a cottage. Call it a cabin. Otherwise you will lose

2:15

their respect. That's what I discovered. So here's the deal with cottages.

2:20

Cottages have a very long history in West Michigan. It's very ingrained, I

2:25

feel in the sort of American psyche. All right, the idea to get

2:30

out of town, get someplace different all the rest of it. If you

2:34

look at the original plat maps of the lakes that are right outside the city

2:38

of Grand Rapids, Michigan, for example, And this is true in other places as well. I just a more study in around Grand Rapids. But

2:46

you have companies that were divvying up. They were selling like twenty foot lots

2:53

now around the lakes themselves. They were forty foot lots. Okay, forty

2:57

feet you know, and they were deeper. But the idea is you had

3:00

a lot that was forty feet wide because that was enough for a you know,

3:07

for you to put your cottage on there. Okay, that was enough because it was just a way to get out of town on the weekend.

3:15

But it went smaller than that. They were selling like a place to pitch

3:17

it. You could get a ten foot lot ten by twenty foot lot for

3:22

you to pitch your tent. That's how strong the drive is right to get

3:25

the hell out of Dodge. And you think, you know, you think

3:29

back, well, you know, people used to be all segregated and racist

3:32

and everything else. Oh and of course now we're worse than ever. Well,

3:37

look back in the day, it wasn't just it wasn't limited to any

3:39

particular ethnic group who wanted to get out of Dodge. Okay, but back

3:44

in the day, we were segregated by religion, so there were subdivisions around

3:47

around lakes that Jews Jewish people could not buy the properties or or Black people

3:53

could not buy the properties. And so the response of them, their response

3:59

to that was to do their own. So if you go straight north right

4:03

up Lake Michigan around in Idlewild, now it's a National Historic Area, and

4:13

it was a black owned, African American owned whatever the right word is these

4:18

days. I apologize for not knowing exactly what it is, but it keeps

4:21

changing on me. Sorry anyway, it was just for uh, it was

4:27

just for African Americans. It's just for black people. And there's all kinds

4:31

of stories. The history is very rich, it's very interesting history if you

4:35

want to look at it. But it underlines I mean, the point is,

4:40

yeah, segregation's bad, I get it. I'm glad we don't have

4:42

any more good good, good good. But the point is that this urge

4:46

to get out of town, to get to a place near a lake is

4:49

not limited to anybody, and everybody wanted to do that okay, and yeah,

4:55

we're bad to each other. I get that. Okay, well it

4:58

ain't that way anymore. Let's move on. But but that urge I think

5:05

is very powerful. Let's get out of the city. Let's reconnect a little

5:11

bit, let's relax. Let's look at a body of water. People like

5:14

to look at water. For some I don't even know what the reason is. Why is it you'd like to look at water. I don't know even

5:19

even go to swimming. Don't go swimming. You like to look at it.

5:24

Okay, that's just the way it is. And this whole cottage thing,

5:27

there is a life cycle to cottages, so even people are fairly limited.

5:31

Means, right, you don't have to be rich. At least you

5:33

didn't used to have to be rich to have a cottage, although that's changing.

5:40

So an awful lot of folks had these four were buying these It was

5:43

working class people were buying the forty foot lots, right, who were buying

5:46

the campsites and all the rest of it. So they could so they could

5:50

get out of Dodge, so they could get out of so they could get

5:55

out of town and actually have you know, a little respite from the city.

6:00

Okay. And as my whole point there was was it's universal. Everybody

6:08

wants to do that. Okay. So now we've got the Lakefront Living Show

6:11

coming up. Great, so it's more about, well, how do how

6:15

do we do that? And nowadays it's we're not in a situation where like

6:20

back in the sixties, Okay, you could buy a lot on Lake Michigan,

6:25

because I got clients who've done this for sixteen thousand dollars. That was

6:29

on Lake Michigan, okay, and you could put up a shack, you

6:32

know, and that's all was. That's what it was. You know,

6:34

a little cozy country kitchen there. You know how many lakes around here they

6:40

get the single wides on them, they got the little what do you call

6:45

the cement block, it's not cement block, then you know the concrete block

6:50

construction, you know what I mean, very modest, but still it's your

6:54

place on the lake, right And those used to be extremely extremely affordable,

7:00

so affordable anymore. And so now my way of thinking the way is the

7:03

question is how do we preserve that for the next generation. So here's the

7:08

life cycle of trust, of trust, here's the life cycle of cottages,

7:13

all right, This is how it works when the kids are little. Right,

7:17

when the kids are little, the cottage is magic, right, it's

7:20

oh, I can't wait to get to the lake. It's so wonderful.

7:24

Blah blah blah blah blah. Okay, fine, kids, little kids love

7:27

it. My French grandmother, my Irish one, my French one, she

7:31

had a cottage on a lake forty minutes away. We would go there.

7:35

We go fishing on the weekends. Couldn't wait to go to Keeach Pond.

7:39

This was in Chapatrick. Ronald couldn't wait to go to Keach, you know.

7:45

And we went swimming. There were fishing there, the whole nine yards,

7:48

you know, woods to hike through, camping, the whole nine yards,

7:51

you know, wonderful. Couldn't win. But when you're a teenager,

7:56

it's like, oh, I mean we have to go there, and it

7:59

smells funny. Grandma's going to pinch my cheek. The teenagers don't like to

8:03

go. The young kids love it. But as the kids get older,

8:07

not so cool. I mean, you have to force them to go. They're not so into it. Then as they go to college, young adult

8:13

and all the rest, they don't have time to go to the cottage,

8:20

and if you give them a share of the cottage, it's more important for

8:22

them to buy a car or a house, or down payment or something.

8:26

They'll find some reason to sell their share of the cottage, right because they

8:31

got these other expenses. They're overwhelmed. But then those people, all right,

8:37

so little kids love it. Teenager too cool, right, don't want

8:41

to go. Then, as a young adult, start in your life.

8:43

Whatever. You've got all these other expenses that seem more they're more urgent,

8:48

but they're not more important, I would say. And then and then you

8:52

get to the phase where you regret having sold Graandma's cottage. Okay, because

8:58

now you've got kids your own, and you got a rent. Have you

9:01

looked at rent what it costs to rent the cottage? Oh my god,

9:05

it's unbelievable. All right, you might as well buy one. Oh,

9:07

except you can't buy one because they've all been bought. Right and by the

9:13

way, this is my thingy, we're selling them, all right. You

9:16

got two problems. Number one, you're selling them because Graham's in the nursing

9:20

home and that's the first thing that's going to go. They won't let you

9:22

keep that you gotta sell it, all right. You got to sell the

9:26

cottage. And if you've lived on if you live on a lake, you

9:30

know every summer, every year there are cottages that come up because miss McGillicutty

9:35

couldn't stay there anymore, and that's why they got sold. It's like farms.

9:39

They get carved up and sold off to pay the nursing home bill.

9:43

But let's say you made it past that. Let's say you made it past

9:46

that, we didn't have to sell the cottage or the farm to pay the

9:50

nursing home bill. It's still around all right, in the family. When

9:56

we get back, I'll tell you what happens next. So remember, here's

9:58

the life cycle of life cycle of cottages. There is a life cycle to

10:03

them. You start off, you got the little kids. The little kids

10:05

love it. Everybody loves it. That's great. They get to be teenagers.

10:11

They don't want to go there anymore. It's a hasshole that smells funny,

10:13

grandma's weird, blah blah. Okay, young adult, they rather not

10:18

have it. They've got other needs. They need the money. They're going

10:22

to sell their interest. If they have an interest, it's no big deal

10:24

to them. And then comes the nostalgic regret. So whatever happened to the

10:31

camp well, you know, whatever happened to the cottage, whatever happened,

10:33

you know it's gone. Now that's the deal. We're going to tell you

10:37

how to fix that when we get back. You've been listening to the David

10:41

Carrier Show on David Carrier Your Family's Personal Attorney. This hour of the David

11:09

Carrier Show is pro bono, so call in now at seven seven twenty four,

11:13

twenty four. This is the David Carrier Show. Welcome back to the

11:20

David Carrier Show on David Carrier, your Family's Personal Attorney. That's right,

11:24

it's a hard day's night, but we're we're still here buy you money to

11:30

buy you things. That's exactly a yeah, that's you don't love the Beatles,

11:35

don't you. I mean, there's not a lot of subterfuge there.

11:39

It's pretty straight ahead. But you know, back when the Beatles were popular,

11:43

you could buy a house on Lake Michigan for about four hundred and twenty

11:46

thousand dollars. Okay, you could buy a cottage on any other leg for

11:48

about half of that. Not a big deal. Does it work that way?

11:52

Now. Now, of course, of course your dollar doesn't go as

11:56

far any other way either. But cottage is one of those things where he

12:01

here's the test of it. Okay, try this. Try go to Chicago

12:07

on a weekend, all right. Have you ever been to Chicago for Chicago

12:11

for the weekend. Have you ever been to Chicago for the weekend? Right?

12:13

And then come back to Michigan on Sunday, anytime Sunday, preferably in

12:20

the afternoon early evening, Okay, and this is especially true in the summertime.

12:26

Come back. And so you're heading back to Michigan and traffic is still

12:31

moving. It's a little heavy, but still moving. And then look at

12:33

the four rows of backed up traffic going from Michigan to Chicago. And if

12:43

you wonder who, well, who are those people? Right? We wonder

12:46

if it's popular to get the hell out of dodge, get out of town,

12:48

right, look at those people. When I was I grew up on

12:52

the Cape, right on Cape Cod and that's the way it was. On

12:58

Sundays. We would actually go to the highway overpass that wasn't far from the

13:01

house, like a mile away from the house. We'd bike over there just

13:05

to look at the backup, and we were halfway out on the cape.

13:09

I mean it was it was twenty thirty miles you know, to the bridges,

13:13

and it was backed up all the way. It was kind of you

13:18

know, I don't know if we were doing it the torture of the tourists

13:22

or whatever, you know, wave them goodbye, but it was. It

13:24

was one of those I'm not saying we did every weekend. It wasn't that fascinating, but you know, we from time to time. You just go

13:31

and look at the look at the traffic backup. Of course, we didn't

13:33

have TikTok or YouTube. Its fact that we had to look at the you

13:39

know, and it was a black and white TV and reception wasn't good on

13:41

the cape. So there you go. So things you did to keep amused.

13:46

But anyway, the point is that everybody wants to get out of town.

13:50

Everybody wants you know, I don't care race, ethnicity, religion,

13:54

whatever, everybody. Everybody likes getting out of town. And then you got

14:01

to go back to town. And the proof of that is look at all

14:05

the people going back to town Sunday afternoon, Sunday evening. Okay, that's

14:11

the thought. Now, when you have competition, right, competition, more

14:16

people want the same thing. Remember we're talking about supplying demand with long term

14:18

care. Remember when the demand goes up and the supply goes down, or

14:24

it's just stagnant and demand goes up, it's a relative thing. What happens

14:30

the price goes up. That's what's happening around all the lake, every little

14:35

lake. Everybody's built up. Blah blah blah. Why because everybody likes looking

14:39

at water for some reason. I don't know what the reason is exactly.

14:41

It's elemental, I guess. And we got a lot of water here in

14:45

Michigan, so great, it's wonderful. Everybody likes looking at it. You

14:50

know, a lot of people like boating on it and water skiing on it

14:52

and fishing in it and all the rest. But that's not the elemental thing.

14:56

The most thing is, you know, looking at the lake. Go

15:00

with a cup of coffee. Huh, I've done that, I bet you

15:03

have to. Of course, I was renting. I don't actually have a

15:07

cottage where, but anyway, the point is here we are, and you

15:15

manage to get a cottage or you sacrifice like crazy right now to buy one.

15:20

Because the price is crazy, right. The question is how do you

15:22

get the most out of it, because you know the prices are only going

15:26

up. Everybody's like, oh, you know they're not making any land.

15:28

Real estate always goes up. Well, you know, yeah, there's land,

15:31

and there's land, right, there's good place in baplace. And the

15:35

thing is with cottages, those are always going to go up because everybody wants

15:39

to live on the lake. Right. Just make sure it's not the lake

15:41

like we had a couple of years ago out out east eastern southeast Michigan.

15:48

I guess it was. The lake was held in by a dam. The

15:52

dam collapsed. Now instead of looking out on placid water, Oh it's so

15:56

lovely, they're looking at a mud puddle. Ooh bad. You don't want

16:00

that one. But get a regular like springfed like and you'll be you know,

16:04

you'd be doing fine. Point is the price is getting so high.

16:07

Life cycle to cottages is little kids love them, teenagers hate them, young

16:12

adults rather sell them. And then then when you finally have kids of your

16:18

own, or you're a little bit older. I don't think you even need

16:21

kids, but you get a little bit older and now you're full of a

16:23

regret and nostalgia and oh whatever happened to why did we ever sell it?

16:29

It's like old cars, you know, you talk about guys with old cars. Oh, I had one of those men. I don't know why I

16:33

ever sold it. I'll tell you why you sold it. Because it was rusting apart. It was a lot of work to keep maintained. There are

16:37

reasons, very valid, good reasons. The point is that if you have

16:42

a cottage right now, my suggestion is that you should break those reasons.

16:48

Break the cycle. Okay, break the cycle. Here's how you do it.

16:53

Everybody, or a lot of folks. Oh, I just do a

16:56

deed on the cottage. I just died the house, did the cottage to

17:00

my kids? The problem with just eating the cottage to the kids when you

17:04

do that is what about the kid who leaves the milk and the refrigerator?

17:10

Okay, what about the kid who leaves the garbage under the sink? What

17:12

about the kid right who leaves the lawn chairs out? What about the kid

17:18

who you know, brings all his friends they vomit in the in the bathtub,

17:22

and then they leave and they don't clean it up. What about that

17:25

kid? All right? Well, You can't cannot effectively sanction that kid.

17:32

You can't prove it. What if they don't want to pay the taxes, you can't make them. What if you want to get them out, you

17:37

can't get them out. You're stuck. What if they come right and they

17:40

have the crazy party with the biker gang and everything else. Apologies to biker

17:44

gangs, but too bad. You know, the biker gangs rips up everything

17:48

and doesn't maintain it. It's terrible. Who's going to get hit with the

17:52

cousing code violation all of you? Thanks about my dad for deeting this to

17:56

all of us and make us put up with yoyo head over there? Who's

17:59

room it for everybody? And there's no escape. You can't get out because

18:04

you put them on joint Oh, we want to stay in the family,

18:07

so you know, whoever dies, you know, last man standing, whoever

18:11

dies last owns the thing, right and in the meantime, you're all joint

18:14

owners, so you know, we keep it in the family. We don't

18:18

have to worry about divorces, we don't have to worry about it going to

18:21

an in law like that's that's the thought process that goes on here. Okay,

18:26

because nobody likes your spouse, right, we don't want to put them

18:30

on. Well, I just wanted to be my kids, right. That's

18:32

that's the thought process. Generous thought process, a nice thought process doesn't work.

18:37

It doesn't work because they because of the nature. You know, you

18:41

put it's like scorpions in a bottle. You put them all in there,

18:44

you shake it up and see what happens. Not good? All right?

18:47

So the reaction to that, what people have been doing in reaction to that.

18:51

There's a guy up in Traverse City wrote a book on this reaction to

18:55

the easiest, simplest, most common way, which is utter disaster and dis

19:00

look at horrible stuff, horrible consequences. The reaction to it has been,

19:04

let's set up an LLC. Let's set up a company, give everyone shares

19:08

in the company, right in the limited liability company. That's the idea,

19:12

or a limited partnership. It's not a good idea, but they set up

19:15

the LLC. Now, the advantage to that is, ooh, now we've

19:19

got rules. Now you can't bring the biker gang. Now if you want

19:25

to use the thing, you've got to pay the taxes, You got to

19:27

help with the utilities, you've got to leave it in a certain way.

19:30

Now with the LLC, this was a huge leap forward, understand, from

19:36

the way that it used to be done to now now it's a Now it's

19:41

a LLC right now, a limited liability company. Oh wow, Now it's

19:45

great, all right, much much better than the joint tendancy. There's also

19:48

a tendency in common. I'm not getting into that right now. If you

19:51

have a question about that, though, give me a call, well we can discuss it. But the point is we went from putting the kids on

19:56

the deed. Everybody said, oh, I'm going to name my kids on

20:00

the d oh oh, what a curse on your family? Curse? And

20:07

you say, oh, well it worked out in my family. I'm like, yeah, yeah, there are pink elephants out there. I believe that,

20:12

you know on by no way, there are pink elephants. Right,

20:15

it could work, you might get away with it, right, But most

20:19

of the time when I hear these stories of what happens is one of the

20:22

kids buys the other ones out right, with these joint tendancies and stuff,

20:26

right, it doesn't really work at all, because that wasn't the idea,

20:30

all right, When we get back, we'll talk about what the real solution

20:33

is, because I know you're just champion at the bit for that one.

20:37

So when we get back from the news, we'll be talking about how to

20:40

break the life cycle of trust, make it perpetual and avoid the usual traps.

20:48

E've been listening to the David Carrier Show on David Carrier. Your Family's

20:52

personal attorney, music, Jesus, David's working as working and taking your calls.

21:11

Now this is the David Carrier Show. Dance with me if you want

21:18

to dance. Oh good, we're back. Welcome back to the David Carrier

21:21

Show on David Carrier. Your Family's Is that Chuck Berry doing that? No,

21:26

Chuck Berry did it originally. Anyway, now's the time to give us

21:30

a call. Six one six, seven, seven, twenty four, twenty

21:33

four. Who doesn't like going to the cottage? The answer is nobody doesn't

21:37

like going to the cottage. Nobody doesn't like Sarah Lee. Right, nobody

21:41

doesn't like going to cottage. Right, everybody likes going to the cottage.

21:45

Why, I don't know. I don't know. It's elemental. People just

21:49

let people just do. You can live in a high rise, working a

21:52

high rise and all that in the high rise. Come the weekend, you're

21:56

going to the cottage. All right, how many people And there's a lot

21:59

of them who during this, you know, during the COVID that's your raid.

22:03

Anyway, during that they said, hey, you know I could do

22:07

my work at the cottage. Why the hell would I ever go back to the city. You know, that's the thing people think. Oh, anyway,

22:17

here's the deal with cottages. Let me recap if you if you just

22:21

got here, there's a life cycle to cottages. Little kids love them,

22:23

teenagers hate them, young adults want to sell them, and when you got

22:29

kids of your own, you wish it was still around. Okay, that's

22:32

how it works. Now. The problem the families have with cottages, right,

22:36

Grandma Graham's got the cottage. The problem is, Grahama Graham I is

22:40

going to have long term care, going to need long term care. You're gonna have to sell the cottage because you won't qualify for the government program that

22:45

pays for long term care, namely Medicaid. You're not going to qualify for

22:49

it as long as you get the cottage. So it's like farms that get

22:52

carved up. The long term care is the way it's going to break the

22:59

cycle. Now, here's the other way the cycle gets broken, you know,

23:03

was it may the circle be unbroken? Yeah, may the cottage circle

23:07

be unbroken? How do we unbreak it? Well, the first thing people

23:11

would do is they would put all their kids on the deed. So that

23:14

was a problem when they needed long term care because then they get denied long

23:18

term care because the kids were on the deed. You didn't wait the five

23:22

years. It was a problem. You couldn't get the hot cottage just a

23:26

mess. Okay. So that was one thing. The other is you still

23:30

own it now they make you sell it, and so it's not going to

23:33

the kids. But what if you actually managed to get through the long term

23:38

care problem all right, and you wanted to get it to the kids.

23:41

Well, people would the most popular thing, the cheapest, easiest. Why

23:45

is it always the cheapest and easiest thing is the thing that's done the most

23:49

I don't know, Oh, call it human nature of course. Anyway,

23:57

So it was to put all the kids on the deed, okay, which

24:00

is not a good idea for a myriad of reasons. There's no enforcement,

24:04

there's no rules, Who gets it, who you can't get rid of them.

24:08

There's common liability. Just a mess, just a mess. But people

24:14

do that. Okay, fine, they do it, but not the good

24:17

way to do it. The response was, and this was a real leap

24:22

forward, was to put the house in an LLC and then give shares of

24:26

the LLCs to the kids. Now, the advantage to that is, now

24:30

you've got a board of directors kind of thing. You've got rules, you've

24:33

got a procedure, you've got a process. If somebody doesn't want the cottage

24:38

and want to leave, the other ones can buy them out kind of thing.

24:41

And okay, that was no denying it. That was a huge step

24:48

forward. But here's the problem as it gets implemented, here's the reality problem.

24:55

The reality problem is go back to remember the life cycle. Little kid

24:59

loves it, teenager hate it, young adult, young adult, got other

25:04

things going on, all right, And so that young adult who needs a

25:08

car, needs a taxes, needs to pay for the wedding need, whatever

25:11

it is. Okay, they're gonna sell out their share. They say,

25:15

well, you know, I'm going to California, I'm never coming back,

25:18

or I'm marrying to or I need a car, or I gotta pay my

25:21

taxes or or all these different things, all these urgent things, right,

25:29

the urgency of the moment. I got to get this done. So they

25:32

sell their share of the cottage. Right. Well, guess what when step

25:37

four shows up, which is you're a little bit older, you got kids,

25:40

whatever, Now you're regretting it bitterly and for the rest of your life.

25:45

Okay, So how do we unravel that? And here's what happens.

25:52

You can do the LLC. You've done the LLC. Let's assume you did

25:55

that, right, you did the LLC. But now you need the money and you say, hey, I'm selling out my share. My experience is

26:03

that when one person wants to sell out the share, the whole thing collapses.

26:07

They all sell. Okay, Now that's just observed reality. That's how

26:15

it seems to worry. I'm not paying you, you know, Oh,

26:17

I don't have the money. You know, I'm barely making the taxes as it is, in the upkeep and all the rest of it. And that's

26:23

when the situation falls apart. That's when it that's when it collapses. And

26:29

it's not just then either. I don't know if you heard of this thing called divorce. Have you ever heard of that? Called d I V or

26:33

rce divorce? It happens, okay, And now that family cottage is part

26:40

of it, right, so selling out, let's get rid of it or

26:45

people, there's another thing called bankruptcy. Oh my goodness, bankruptcy. What

26:49

about that? Well, you own shares in the cottage. It's like going

26:53

and shares the IBM. It's a GM. It's the same thing you own

26:56

shares. It's got value taking it. Okay, So there are downsides to

27:03

do in the LLS. It was a leap forward, there's no question about

27:06

that. It was a leap forward rules, accountability, fairness, there's all

27:11

kinds of good stuff about it. But it didn't accomplish the goal. Because

27:17

here's my question to you, what is the goal when you're leaving a cottage

27:21

to your loved ones? Is the goal to put off paying him some money?

27:26

Is the goal a temporary solution? I say no. I say the

27:30

goal for the cottage, the family cottage, right, should be the same

27:36

goal that we had one hundred and fifty something years ago. You listenes that

27:41

Grant was the president, you probably don't remember that, right when you listen

27:45

that s Grant, the Civil War general. Well, he was president there

27:48

for a while, and one of the things he did, God bless him,

27:52

was sign off on making Yellowstone the first national park. Now, what's

27:56

the deal with Yellowstone? Think about this, What the deal? Why did

28:00

he do it? Why did John Muir and the rest of those conservation is

28:03

why did they want it? Why did we go ahead and do that?

28:07

Because what they recognized, was very intelligently recognized, was if we lose Yellowstone,

28:14

we ain't getting it back. If we cut down all the redwoods,

28:18

we aren't getting them back. Okay, we're not going to wait two thousand

28:22

years. Look at Look at northern Michigan. All right, We clearcut that

28:25

sucker right then it burned and everything else. You know, this is the

28:27

history of Michigan. And now it's a bunch of scrub. You know,

28:30

there's some growth back, but nothing like it used to be, nothing like

28:34

the forest prime evil. Right, So if you lose it, you aren't

28:38

getting it back. That's the point, okay, right, This is why

28:42

we have national parks and guess what it's not or state parks. And it's

28:47

not free to stay at a state park. You got to pay to drive

28:51

on the road. Get the sticker. Of course that's cheaper, but you got to pay for a campsite. You got it. There's rules. Okay.

28:56

Now here's the thing. You've never been to Yellowstone. You will never

29:03

go to Yellowstone. You saw that thing on the TV. And oh,

29:07

I don't like people, cowboy hats and whatnot. I'll never go to Yellowstone.

29:11

I hate bears and geysers and make me nervous. And here's my doctor's

29:15

letter saying I'll never go to Yellowstone. Well, can you now go.

29:18

You've got a doctor's letter that says you'll never go to Yellowstone. You swear

29:21

an affidavit. I will never go to Yellowstone National Park. I'll never go.

29:26

Okay, can you write to the Can you write to the National Park

29:30

Service, the Department of the Interior and say, hey, cash me in

29:33

my share of Yellowstone because I ain't never going there. I even got a

29:37

doctor's letter. They will laugh at your face. Why, because that's not

29:41

the point of Yellowstone. The point of Yellowstone is that be there for the

29:47

long haul, all right. Even if you don't want to use it,

29:49

you might have kids who want to use it, and there's other people want

29:52

to use it okay, so ain't all about you. My suggestion is we

29:56

do the same thing with the cottage. All right. This is why we

30:00

call our cottage trust the national park model. All right. Nobody can sell

30:07

it out. Your kids can't sell it. They can go through bankruptcy,

30:10

divorce, whatever, go to nursing home, whatever, nobody. They have

30:14

no entitlement to sell the property to get out of it. But there are

30:18

rules because we did it as a trust. Now there are rules, and

30:22

we do an LLC, so there's limited liability so you don't have to worry

30:26

about that. So we've got the protection parks coming. I'll finish talking about

30:30

that when we get back in the last segment. But think about your cottage

30:34

as a national park. Your cottage is Yosemite. That's the idea. You've

30:40

been listening to The David Carrier Show. I'm David Carrier. Your family's personal

30:45

paternity limit nothing. I think it's aday. This is the David Carrier Show

31:07

on News Radio with thirteen hundred and one six nine f M. Welcome back

31:14

to the David Carrier Show. I'm David Carrier, your family's personal attorney.

31:18

Now here's the deal. Here's how you do the cottage. Okay, what

31:22

we do is we put the cottage in trust. Yeah. Trust, you've

31:25

heard about those before, right, But that's what you do. You need to break this life cycle. Right, So when the kid is in his

31:32

twenties or early thirties and he's got all these bills and oh it's terrible,

31:36

right, you need to get over that home because guess what if you hadn't

31:38

had the cottage, they'd figure a way. Okay. It's not your job

31:42

to rescue them. It's your job to take the long view, the long

31:48

view. Okay, you have got the perspective, right. You own the

31:52

cottage. You bought it in the sixties to seventies and eighties of the nineties,

31:56

whenever you bought it when it was still possible to buy. You did

32:00

that. That's good. Let's not blow it, okay. Number one,

32:04

you want to protect it from long term care. Okay, that's part of

32:07

them for us, that's part of the course. Right. So we're not

32:10

going to lose it to the nursing home. We're not going to do that,

32:13

all right, But then we're not going to make the follow on mistake,

32:16

the follow on blunder, the follow on disaster of putting all the kids'

32:22

names on the damn thing. We're not going to do that, and we're

32:25

not going to turn it into the piggy bank. You know. Uh,

32:30

what's the deal with piggybanks, right, You got to smash them to get

32:32

the money inside. Well, kids, at certain points in their life,

32:37

they're more than willing to smash the piggy bank. They're more than willing to

32:39

smash the cottage because they feel like they need the money. Is any of

32:45

this strange to you, No, of course not. You know this,

32:49

You already know this. This is how they are, Okay, got it.

32:52

And what we want to do is we want to avoid avoid that regret

33:00

that sets in later when the cottage isn't around anymore. Okay, So number

33:05

one, we're not going to lose it to stupid things like nursing home.

33:07

We're not going to lose it to long term care. That's job one,

33:12

Okay, accomplished, That's we do all the time anyway. But the key

33:15

with the cottage is you can't. You're not just oh because people say,

33:20

oh, I don't care. You just let the kids do whatever they want, eh. I don't think so, especially not with people you built the

33:27

thing. You maintain the thing. It's a special place. There's meaning to

33:30

it. Now, if you don't feel that way about your cottage, God

33:34

bless you. Okay, fine, let them blow it. I don't care.

33:37

But my experience has been people don't generally feel that way. And I

33:45

say cottage, but you know, it's also the hunting cabin, the hobby

33:47

farm, the whatever, you know. But we got the cottage shows coming

33:52

up. That's what I'm talking about. The point is, the point is

33:54

there's meaning there, there's meaning to it, there's purpose in it. Okay,

34:01

all right, let's not sacrifice long term purpose for short term gratification.

34:07

The way you do that is you put the cottage in the trust and you

34:10

have let the trust do an LLC if they want to, which we recommend.

34:14

But now the rule is, the rule is that the family members can

34:19

use the cottage, all right, but there's no entitlement to it, you

34:23

get it. There's no like entitlement. They could use it. Possibly it's

34:28

available to them, right, but they've got to pay what it actually costs.

34:32

So there's a budget sinking funds the whole nine yards to maintaining the cottage,

34:40

and then you work it out with the family members, who gets what

34:44

do a lottery? There's all kinds of different ways of allocating the use of

34:46

the thing, but the point is. The point is we always budget for

34:52

a cleaning fee too, so if you're going to use it for a week, you got to pay for what it costs. It's just like the It's

34:58

just like you go on a Yellowstone. It ain't free to go to Yeloso, you go to the Porky Pine mountains up there, you know what I

35:02

mean? That isn't free. Go to National Seat where it's not free.

35:07

Okay, yeah, well it's a good thing. We have it here so

35:10

you don't have to go out and buy it, which you never could do,

35:13

right, you couldn't buy it. But it's not free to use it

35:16

because there are actually expenses involved. Right, great, so let's pay what

35:22

it actually costs. Now here's the other thing. One of the things we

35:24

found was observed observed is that when you have when you've done this all right,

35:32

and which I'm doing with my brothers incidentally on a property, you know,

35:37

we own the thing, but then we rent it out so that we

35:39

don't have the expense of it except for when we want to use it right,

35:44

so you get Airbnb and Verbo and all the rest of it. Look, whack those tourists hard. They don't have a cottage in their family.

35:50

I feel sorry for them. But you can let them use yours at the market rate. And now you get the taxes paid. And here's the other

35:55

thing. If you do this correctly, which you should, of course,

35:59

do it correctly, you're not going to uncap the property tax value either,

36:02

all right, because under Michigan law, now you know, this is why

36:06

people are doing the joint tendencies, which was a bad reason for doing them, but they were doing it in order not to jack the tax rate up

36:13

when somebody died in the transferred. They were trying to avoid the transfer.

36:17

Okay, well, now that's all been settled. I've been settled down now

36:21

for years. Okay. It takes a long time for this information to get

36:24

out, but we do our best anyway. The point is that because you've

36:28

got family members who are inheriting it, even though they're getting it through the

36:31

trust. Even though they're getting it through the trust, we're still not uncapping

36:37

uncapping the taxable value. So we've got gosh, any number of clients who

36:43

they got mom and Dad's cottage. If they had to pay at current the

36:49

current value of the property, they have to sell it. They can't even

36:52

afford Get this, they can't even afford to pay the taxes. Okay,

36:55

But because there was some foresightedness, fire sighted, you know, looking forward

37:00

to the future to hey, I'm not trying to transfer this asset to the

37:04

kid. There's a million ways to do that. I want to provide an

37:07

opportunity through the generations for something that's irreplaceable. That cottage is not replaceable.

37:15

They can't afford it. You know that they're not going to do it.

37:20

But you did it, You already did it. And when you're done with it, why not do it? Why not pass it on to the kids

37:25

in such a way that you keep the promise of the couste It'll be there

37:31

for your great great great grandkids when they're little kids. And when they're too

37:35

cool to go there, well you'll get over it, because you know that

37:38

even when they're dire straits, right, dire straits, and the oh I

37:44

would have sold my share. I wish I could tell this, but well,

37:47

look, they can go for a weekend. They go for a weekend

37:50

and it'll be a lot less expensive than renting a place. They still have to pay the cost, but it'd be a lot less expensive, right because

37:57

why because now you're only paying the cost. You're not there's no profit involved.

38:00

And Grandma, grandpa, great grandma great grandpa set that up also many

38:05

years ago. That's the point. And then then they'll be one of the

38:08

families, the old families at the lake that's had the thing in the family

38:12

forever, okay, and your great grandkids will meet up with your friends great

38:16

grandkids and they'll all talk about how great it was that this was set up

38:21

for them many long years ago. That's the payoff, okay, because my

38:28

experience is that it's unusual for people to get the cottage right and not become

38:34

attached to the place. I mean, think about what people do. They

38:36

clear out a Friday afternoon, they're up to the cottage, they're doing all

38:38

the work on it. It becomes a thing. It's almost like farming.

38:45

You know, farming is a lifestyle choice. Right, Well, the whole

38:49

cottage thing becomes becomes that way, and it is important for it is important

38:54

for people, for all kinds of people. We at one of these charity

38:58

auctions. We got a house up and I don't know where it was twenty

39:02

two, you know, over there, and you know, we're walking down

39:07

to the beach. Well who do you think we see? But there's you know, and I'm looking at this. There's a woody station wagon there and

39:13

this this guy comes over and you know, the the guy from a tool

39:16

time, what's his name, the TV guy he did Buzz light Year,

39:22

that guy, the actor guy. Well, anyway, it turns out to be a very nice guy. And he's got he's got a cottage on this

39:28

on the lake over there. You know. My point is that it's all

39:31

kinds of folks like that kind of thing, right, And you don't have

39:37

to be a movie star, TV star, whatever the hell. In order to perpetuate that. You can do that through your family. You can make

39:45

it happen like everything else. Even listening to the David Carrier Show. On

39:49

David Carry I see you at the cottage show this weekend. Your family's personal

39:53

at the time you've been listening to the David Carrier Show, a lively discussion

40:16

addressing your questions and concerns, but not legal advice. There is a big

40:21

difference. So when making decisions that affect your family, your property, or

40:24

yourself. The best advice is to seek good advice specific to your unique needs.

40:30

If you missed any of today's show, or would like additional information about

40:32

the law offices of David Carrier, please visit Davidcarrier law dot com.