Passing Wealth to the Next Generation

Passing Down the Family Cottage: The Conversations to Have Before You Promise It to Your Children

Before you say “one day, this will all be yours,” find out whether your children want the same future, and whether they can afford it.

By Sami Majdalani, M.A. (Econ.), LLQP · Eagle Wealth Partners · 4 min read

The dock is where your children learned to swim. The kitchen holds decades of family dinners. Every summer, the grandchildren add another chapter.

It is easy to say, “One day, this will all be yours.”

Before making that promise, ask whether your children want the same future, and whether they can support it. Passing down a family cottage brings responsibilities that memories alone cannot settle.

The short answer

Before promising the cottage, ask each child privately whether they want ownership, occasional access or a different inheritance. Separate being welcome from being responsible. Agree on how costs, work and decisions would be shared, plan for the tax when ownership changes, and decide how someone could leave without forcing a sale.

Ask what each child actually wants

Imagine an illustrative family with two adult children. One lives nearby and visits every weekend. The other lives several hours away and comes once a summer. Both love the cottage, but they would use it very differently.

The parents assume shared ownership will keep everyone connected. The children have never discussed whether that arrangement would suit their lives.

Ask each child privately, then talk together. Would they want ownership, occasional access or another form of inheritance? Give them permission to answer honestly. Declining ownership should not have to feel like rejecting the family.

Separate ownership from the invitation to visit

Being welcome at the cottage and becoming responsible for it are different commitments.

An owner may need to fund repairs, organize maintenance and participate in decisions. A guest can enjoy a weekend without taking on those obligations.

Discuss whether everyone needs to own a share to remain part of cottage life. The right arrangement depends on the family; a lawyer can explain how the intended access and ownership should be documented. Avoid making informal promises that conflict with the eventual legal plan.

Before you change the title

Be careful with shortcuts. Adding a child to the title now can have tax and legal consequences of its own, including exposing the cottage to that child’s creditors or a divorce. Ask your lawyer and accountant before changing ownership.

Talk about the work behind the weekends

Someone books the contractor, checks the roof, opens the property in spring and closes it before winter. That work can quietly fall to one sibling.

Money matters, but so does time. Agree on how tasks would be shared, what could be outsourced and how costs would be approved. A child who contributes labour may see fairness differently from one who contributes only money.

Also discuss holidays, guests, pets and whether anyone expects to rent out the property. Small assumptions can become recurring arguments when ownership is shared.

Give children a realistic financial picture

Prepare a simple record of annual costs and major work likely to be needed. Include property taxes, insurance, utilities and maintenance. Ask whether each child could contribute without damaging their own household finances.

The transfer itself may also create tax and estate expenses. Have your accountant assess the circumstances before deciding how or when ownership will change. A plan to keep the cottage needs a separate plan for the money required to do so.

$268,000

Potential tax on the $1 million gain on a cottage bought for $300,000 and now worth $1.3 million, at 2026 top Ontario rates, when ownership changes or at death, unless part of it is sheltered or deferred.

An estate tax exposure assessment shows what your cottage would actually cost to pass on, before anyone makes a promise.

Agree on what happens when life changes

A child may move, lose income or decide that ownership no longer fits. Discuss an exit process while relationships are good. How would a share be valued? Who could buy it? What happens if nobody can afford to?

Do not expect the next generation to solve these questions while grieving.

Your involvement now can help them understand your wishes and shape an arrangement they can live with.

Three questions for your next cottage weekend

Does each child want the responsibilities of ownership?

How would costs, work and access be shared?

What would happen if one person wanted to leave the arrangement?

Frequently asked questions

How do I pass down a cottage to my children in Ontario?

Start with what each child wants, then work with your lawyer and accountant on how and when ownership changes. Options include leaving it through your will, transferring it during your life or using a trust, and each has different tax and legal consequences.

Is there tax when a cottage passes to children?

Usually. At death or on transfer, the cottage is generally treated as sold at fair market value, and half of the gain is taxable. A cottage bought for $300,000 and worth $1.3 million could face about $268,000 of tax at 2026 top Ontario rates, unless part is sheltered by the principal residence exemption or deferred to a surviving spouse.

Should I add my child to the cottage title now?

Not without advice. Adding a child to the title can trigger tax and can expose the cottage to that child’s creditors or a divorce. Speak to your lawyer and accountant first.

What if one child wants the cottage and the other does not?

That is common. Ownership is not the only way to be fair; the other child might receive a different inheritance. Agree on it while you can still explain your reasoning.

A wish to keep the cottage needs a plan to pay for it.

At Eagle Wealth Partners, I help Ontario families identify financial exposure around the assets they hope to pass on. Let’s discuss whether your cottage wishes have a practical funding plan.

Important information

This article is for general information only and does not constitute personalized financial, investment, legal or tax advice. Before making changes to your estate plan, asset ownership or beneficiary designations, consult your lawyer, accountant and appropriately licensed financial or insurance advisor. The right approach depends on your circumstances and the laws and tax rules in effect at the time.