Who Gets the Vacation Home in a Divorce?

If you and your spouse are going through a divorce, your marital property will be subject to equitable distribution. In addition to your family home, retirement and pension accounts, and business interests, vacation homes and other investment properties will need to be divided equitably in the divorce agreement. This can be a complicated and potentially contentious process, particularly if you and your spouse want to maintain home ownership and enjoy the property.

The court will consider several factors when determining how the vacation home and the rest of your marital property will be distributed. In order to ensure that your legal and financial rights are protected throughout the divorce process, it is highly recommended that you contact an experienced divorce lawyer at your earliest convenience.

What Is the Difference Between Marital Property and Separate Property?

When deciding how property will be divided in a divorce, the first step is to determine whether the property is considered marital or separate. Marital property includes any real estate property and other assets that were acquired over the course of the marriage. For example, if you and your spouse purchased a vacation home after you got married, it will likely be considered marital property and subject to the equitable division of property.

Separate property is the property you or your spouse owned before the marriage. Property that was inherited may also be considered separate property. However, if marital funds were used to maintain the home or make significant renovations, or you and your spouse both made financial contributions to the property, it may be subject to partial division in the divorce.

What Factors Determine Property Division?

While other states automatically divide marital property equally, New Jersey is an equitable distribution state, meaning that all marital property is divided in a manner that the court deems fair rather than an automatic 50/50 split. The court will consider the following factors when determining how the marital property should be divided:

• The duration of the marriage.
• You and your spouse’s income and earning capacity.
• You and your spouse’s age and emotional health.
• Debts and liabilities.
• Each of your contributions to the other’s earning power and education.
• Standard of living that you have become accustomed to.
• Prenuptial and postnuptial agreements.
• Child custody arrangements.
• Other factors that the court deems necessary.

What Are the Options for Dividing a Vacation Home After Divorce?

Before you even consider how to divide a vacation home, it is critical that you determine the value of the home. This can be a complicated process, and a number of factors will impact the home’s value, including the location of the house, the current condition, and real estate market trends. It is highly recommended that you evaluate your property by a professional appraiser, who will assess it and provide an unbiased value based on comparable sales in the area.

Once you have an accurate home valuation, you will need to decide what to do with the vacation house and what makes the most financial sense. There are several options to consider, including the following:

• Sell the house. This option will allow you and your spouse to break from the relationship and move forward without any ties to the property. Once the house has been sold, the proceeds will be divided, and you can use that money towards a downpayment on another vacation home or invest it in other assets. However, if you have strong emotional ties to the home, there are other options that you may want to consider.
• Buy out your spouse’s share. If you feel strongly about keeping the vacation house, you can buy out your spouse’s share. If you pursue this option, it is important that you consider your financial resources. You will need to determine whether you can afford to pay your spouse their portion of the vacation home’s value in addition to the costs associated with your primary residence and other monthly expenses. A buyout is determined by subtracting the fair market value of the vacation property from the outstanding mortgage balance and other liens or debts associated with the property. The remaining equity is divided between you and your spouse. If you are keeping the vacation home, you will need to pay your spouse their share in cash or through other assets. Depending on your financial situation, you may need to refinance or take out a home equity line to do this. It is highly recommended that you consult with a financial advisor or mortgage specialist to determine the best path forward based on your financial circumstances. While buying out your spouse allows you to keep the vacation home, it is essential to make sure that it is a sound financial decision.
• Rent out the vacation home. This option allows you to keep the property and earn a steady income stream, particularly if your vacation home is in a desirable location with high rental demand all year. Before pursuing this option, it is important to understand the responsibilities of a landlord, including maintaining and managing the property and anticipating periods of vacancy. This also requires considerable cooperation between you and your former spouse. For example, you will need to agree on handling tenants, repairs, and rental agreements and how to make mortgage payments during the off-season when you do not have renters. This can lead to disagreements and resentment over how a problem was handled.
• Retain joint ownership. Another option is to maintain co-ownership of the vacation property. While this allows you to continue enjoying the property after the divorce, it does require a high level of cooperation. For example, you and your spouse will need to agree on how to manage expenses and maintenance. Creating a schedule for when and who will be using the house is also a good idea. Generally, this option only works for couples who have reached an amicable divorce and can communicate effectively and respectfully about financial matters.

How Can a Divorce Lawyer Help Me With My Divorce Settlement?

If you and your spouse own a vacation property, and you have questions or concerns about how the property will be divided in the divorce, an experienced divorce lawyer will help you navigate this complex process, discuss your goals regarding your vacation property, recommend the best option based on your financial situation and the current value of your property. If necessary, we will protect your interests in court and ensure your legal and financial rights are protected.

The Morristown Divorce Lawyers at Lyons & Associates, P.C. Assist Clients With Complex Real Estate Matters During a Divorce

If you are going through a divorce, and you are concerned about what will happen to your vacation home in the divorce, it is in your best interest to contact the Morristown divorce lawyers at Lyons & Associates, P.C. at your earliest convenience. We will help you navigate every divorce process step, explain the options for dividing real estate property, and recommend the best legal course of action. To schedule a free, confidential consultation, call us today at 908-575-9777 or contact us online. Located in Somerville, Morristown, and Freehold, New Jersey, we serve clients throughout Somerset, Woodbridge, Morristown, Parsippany, Rockaway, Short Hills, Chatham, Randolph, Madison, Morris Plains, and Monmouth County.

• Category: Divorce