All About Estates
By Emily Hubling
September 19th, 2025
A family cottage is not an ordinary asset. It’s a special place where memories are made and traditions are passed down, and as a result, planning for its succession can be challenging.
Often, individuals will include a trust in their Will that holds the cottage for the benefit of their family members. While the drafting of a cottage trust is a topic too big to thoroughly cover in a blog post, here a few things that should be considered when drafting a testamentary cottage trust:
- Trustee:
Consider who will be an appropriate trustee (or trustees) of a cottage trust. In a large family, should there be representation from multiple branches of the family? Is there likely to be disagreements among family members, such that it would make sense to appoint a neutral third party? Should the trustee be compensated for acting, and if so, from what funds? - Beneficiaries and Use of the Property:
Who is the trust being held for? How will use of the cottage be shared – as they agree, or should more structured terms be built into the trust? Can the beneficiaries rent out the property, and if so, what happens to the income? Should there be a requirement that beneficiaries enter into a co-ownership agreement before an ultimate distribution? - Maintenance and Costs:
How will costs associated with the maintenance of the cottage be paid for? Should there be a fund set aside in the Will to cover these costs? Who will be responsible for completing the actual maintenance? What about capital improvements – should they be allowed? Who determines if they are necessary? - Duration of the Trust:
Is the intention of the trust to hold the property for as long as possible, or to give family a short test-run before making a distribution? Taking into account the ongoing management required of a trust, how long can the trust realistically be maintained? If the trust is to be held for a long term, how will the deemed disposition be dealt with every 21 years? How will the cottage eventually be distributed once the trust is completed – who is likely to be able to enjoy the use of the cottage at that date?
