The more assets spouses share with one another, the more they have to address when they divorce. Real estate holdings can be particularly challenging for people to effectively integrate into property division negotiations. Parenting plans, pre-existing connections and proximity to work could all potentially influence how spouses address their marital home when they divorce. However, they may own other real property in addition to their primary residence.
Specifically, the spouses may share a vacation home. A cabin in the mountains or a beach home could represent a significant investment of marital resources. It might also be a place where both spouses enjoy spending time, making it difficult for them to fairly address.
What solutions are most common for those with vacation homes and other secondary real estate holdings?
1. The sale of the property
In scenarios where both spouses feel an attachment to the vacation home but do not want to make concessions regarding the property, selling the home for a fair market value could be a reasonable solution. Spouses can agree to a specific split of the proceeds from the sale. They could even use some of the funds to fulfill shared financial obligations, limiting the debt they have to divide.
2. One spouse buying out the other
If one spouse has a stronger attachment to the vacation home or is in a better position to either afford or maintain the property, then allowing that spouse to retain the home might be the best solution available. The spouse keeping the vacation home can refinance and withdraw equity to compensate the other spouse. They could also compromise in other areas of property division to make the final arrangements as fair as possible.
3. Continued joint ownership
Perhaps there are young children in the family, and both parents want to spend weekends at the vacation home with the kids occasionally. Maybe both spouses have an attachment to the property and want to spend time there by themselves or with friends. It is theoretically possible for divorced people to maintain co-ownership of a vacation home. They can establish thorough contracts allocating financial responsibility for the property, such as arrangements for covering taxes and insurance. The spouses can establish a schedule regarding when each has access to the property, possibly including an alternating schedule for holidays or the summer months.
Every property division case requires different solutions. Looking into every option for high-value resources during divorce can help people negotiate effectively. Spouses who settle their property division disputes retain control and may ultimately feel more satisfied with the terms that they set.