Two years after the events in the previous film, the Baker family begins to undergo many changes, beginning with Lorraine (Hilary Duff) and her desire to study in New York. Their oldest daughter Nora (Piper Perabo) is now married to Bud McNulty (Jonathan Bennett) and heavily pregnant. They intend to move to Houston because of Bud's new job promotion.Feeling the family is breaking apart as the children grow up and move away, Tom (Steve Martin) persuades the entire family to take one last family vacation all together at Lake Winnetka. Tom's old rival Jimmy Murtaugh (Eugene Levy) and his large family (with "only" eight kids) are also there for the summer. Jimmy constantly flaunts his wealth and success to Tom, as well as the accomplishments of his children, often suggesting to Tom that the Baker children are less successful because of Tom's parenting style. The Baker kids get into many incidents, several of which are accidental: Mark accidentally sets off a backpack of fireworks, causing widespread panic, especially when the backpack is thrown into a boat, igniting its engine and causing it to explode; Sarah Baker (Alyson Stoner) is caught stealing merchandise from a gift shop, and Mark Baker (Forrest Landis), along with Kenny Murtaugh, crashes into a tennis court with a golf cart.Jimmy again starts the topic that Tom needs to use a firmer hand on his kids. Tom is angered by this, and they decide to settle the matter at the Annual Labor Day Family Cup. Tom trains the kids for days, not realizing they are miserable. Sarah and Elliot Murtaugh (Taylor Lautner) go on a movie date to watch Ice Age, but are spied on by their fathers. The two men argue and end up humiliating their children. Upon returning home, Sarah is furious and refuses to compete for her father in the "stupid cup". Everyone, including Kate, is angry with Tom, not only for spying on Sarah, but also for ruining the entire trip through his competitiveness.The next morning, Tom goes to the Cup to compete, taking Nigel and Kyle (the only two still willing to go). However, after discovering an old "Team Baker" flag, Kate and the rest of the family show up, showing they forgive Tom and are willing to compete. Unfortunately, after all the events, the Murtaughs and the Bakers are tied for first; a tiebreaking canoe race is announced, in which every family member must compete. During the race, Nora's water breaks; the Murtaughs want to help, but Jimmy, sensing the opportunity to defeat Tom once and for all, initially refuses to help. Eventually, the Murtaughs convince Jimmy that they should help the Bakers, and the Bakers and the Murtaughs work together to get Nora to the hospital as she goes into labor. Bud, Lorraine and Kate go with Nora in the delivery room, while Tom, Jimmy, Sarina and the rest of the kids stay in the waiting room. While talking to Jimmy, Tom realizes that he has to let his kids grow, but wherever they go, they will always be with him, and he will always be with them. Nora then gives birth to a baby boy who she and Bud name Tom in honor of her father, who has shown them "there is no way to be a perfect parent, but a million ways to be a really good one." Bud also announces that they have bought "The Big House", the vacation home that the Bakers have been renting. Nora, Bud and baby Tom leave for Houston three days later.
Output: Question: Where does the entire family decide to take one last family vacation?, Answer: Lake Winnetka