Cottage Law - Resources

Resources

Ten reasons to use a limited liability company

A client asked me why a limited liability company was a good idea. With a nod to David Letterman, I offered ten reasons.

A cottage LLC:

1) prevents an owner from forcing the sale of the cottage through an action for partition

2) is an alternative to allowing common law rules dictate how the cottage operates

3) prevents transfer of an interest in the cottage outside the family (this includes preventing an inlaw from acquiring an ownership interest in the cottage)

4) helps protect the owners from creditor claims

5) establishes a framework for scheduling use of the cottage

6) provides sanctions for nonpayment of cottage expenses

7) can serve as a vehicle for an "endowment" (money set aside to fund cottage expenses)

8) can require mediation or arbitration of family disputes

9) allocates control of the cottage between or among generations of owners

10) can help delay (but not avoid) the uncapping of Michigan property taxes

Stuart J. Hollander (2006)

240 Northland Drive, Rockford, Michigan Call: 616.866.9593

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