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Owning a cabin can be a heartwarming and joyous experience. However, being a cabin owner also presents numerous issues, especially when one wants to keep a cabin within their family. The counsel of a competent attorney can lead to multiple solutions to the legal perils of cabin estate planning, including the use of two common devices: the cabin trust and the cabin LLC.

Why Should I Worry About Cabin Planning?

There are numerous issues that can arise amongst beneficiaries to a cabin including: financial and labor contributions, renovations, sharing use of the property, and transferring ownership.

Financial & Labor Contributions

There are numerous expenses that come with owning a cabin such as property taxes, temperature control, or even association fees. Furthermore, properly maintaining the cabin will require regular labor such as mowing, cleaning, tree removal, etc. If there are multiple beneficiaries that are to receive a cabin, there must be a plan for how these beneficiaries will allocate financial contributions and labor.


Regardless of the steps that one takes to maintain the property, mandatory renovations will be inevitable. Careful cabin planning can allocate responsibility for renovations amongst beneficiaries, which can prevent future conflicts.

Sharing the Cabin

If there are multiple beneficiaries to a cabin, multiple disputes might arise regarding who gets to use the cabin, how many times, and when. Cabin planning can lay out a timeline for how beneficiaries must share the cabin and ensure that one beneficiary does not oust the others.

Transferring Ownership of the Cabin

There might be certain circumstances when a beneficiary is no longer capable of maintaining a cabin. Therefore, proper cabin planning requires developing procedures for transferring or selling the property when necessary.

Overall, there are numerous issues that come with a cabin. However, these issues can be alleviated with either a cabin trust or a cabin LLC.

What Is a Cabin Trust?

A cabin trust functions similar to any type of trust. A trust agreement is created, which places the cabin and select funds inside of a trust, which is managed by a trustee. The trustee makes decisions pursuant to instructions left by the trust’s creator, often referred to as the settlor. The funds that are placed inside of the trust are to be used for expenses and maintenance of the cabin.

What Is a Cabin LLC?

A limited liability company (LLC) is a type of business format where ownership is assigned to a group of members. Management of the LLC is either given to the members themselves, which is known as a member-managed LLC, or to selected managers, which is known as a manager-managed LLC. An LLC is created with an operating agreement, which will lay out the specific rules for the cabin’s ownership and operation. All cabin-made decisions are made by a majority vote of the members. As its name suggest, the owners of the cabin LLC will have limited liability, therefore, they cannot be personally liable if the cabin LLC is sued.

Why Can’t I Just Pass Down My Cabin with a Will?

Transferring a cabin with a will is insufficient to protect one’s interests. All assets conveyed with a will must go through probate, which can result in litigation and extensive time and expense. The above options are much more flexible than wills.

Advantages of Both a Cabin Trust & a Cabin LLC

Cabin trusts and cabin LLCs have become the popular devices to transfer ownership of a cabin, particularly among parents who wish for the cabin to pass down to the next generation, because of its numerous advantages which include: 1) the ability of the creator to retain control during their lifetimes; 2) the cabin obtaining a full step up in income tax basis at the death of the last member of the first generation; 3) the ability to exert “dead hand” control over a cabin; and 4) the ability for the trust/LLC creators to continue to help the next generation.

What are the Advantages of a Cabin Trust over a Cabin LLC?

One advantage of trusts is that they give owners more control over what future generations can do with a cabin. Furthermore, if owners want to leave some money or investments for future generations to use for cabin expenses, a trust will better protect those funds and ensure that they are used for the benefit of the cabin.

Another advantage of a trust will result in less legal formalities than an LLC. An LLC involves multiple legal formalities such as annual meetings and mandatory filings that are not present with the creation of a trust. Overall, a trust is less complicated and requires less attorney oversight.

What are the Advantages of a Cabin LLC over a Trust?

A major advantage that an LLC has over a trust is flexibility. An operating agreement can be modified at any time. On the other hand, it is very difficult to modify a trust when the settlor has passed away. Therefore, an LLC is better equipped to handle unforeseen circumstances.

Another advantage of an LLC is perpetuity. An LLC will last forever until it is dissolved by its members. Such perpetuity is not present for trusts which must eventually come to an end.

Finally, another advantage of an LLC is the members’ ability to insulate themselves from personal liability. As mentioned above, members of an LLC will not be personally liable when the cabin LLC is sued. On the other hand, beneficiaries of a trust can be subject to greater risk of liability.

How Our Lawyers Can Help!

Dudley and Smith, P.A., has skilled and experienced estate-planning attorneys, including Joseph J. Dudley Jr. and Steven C. Opheim, that can assist you with your cabin planning needs. If you have questions about planning for your family cabin, please contact Mr. Opheim or Mr. Dudley at 651-291-1717. Dudley and Smith, P.A. is a full-service law firm with offices in Blaine, Bloomington, Burnsville, Woodbury, Eagan, Eden Prairie, Roseville Mendota, Heights, and White Bear Lake.

The law is continually evolving and Dudley and Smith, P.A.’s blog posts should not be relied upon as legal advice, nor construed as a form of attorney-client relationship. Postings are for informational purposes and are not solicitations, legal advice, or tax advice. A viewer of Dudley and Smith, P.A.’s blog should not rely upon any information in the blog without seeking legal counsel.