Owning a vacation home has become increasingly popular in recent years. According to the National Association of Home Builders, there were roughly 7.5 million second homes in the U.S. in 2018. That year, vacation properties represented 5.5% of the total number of private residences in the country.
Your vacation home may be one of the more valuable assets you and your spouse own. If the property is part of the marital estate, though, you must divide it during your divorce. While you have a few options for doing so, you should first ask yourself three divorce-related questions.
1. How much is the property worth?
Whether you intend to sell your vacation home, keep it, give it to your spouse in exchange for something else or take any other action, you must know how much the property is worth. Because valuing vacation homes can be challenging, you should probably find an experienced appraiser to give you a reliable estimate.
2. Who’s name is on the mortgage?
If there is a mortgage on your vacation property, there is a good chance it is in both your name and your soon-to-be ex-spouse’s. The ultimate ownership of the home may depend on whether you or your spouse can independently qualify for a mortgage.
3. Can you split ownership?
Despite your divorce, you and your spouse may not be enemies. If both of you love the vacation property, you may be able to split ownership and occupancy. Doing so likely requires addressing some matters proactively.
Writing a comprehensive joint-ownership agreement that covers usage schedules, maintenance and upkeep, utilities, fixtures and furnishings and other important topics may be an effective way to minimize future conflict.