Many people have a dream of owning a vacation property, whether it is a beachfront bungalow or a lakeside cabin out of state. Achieving that dream can give families a place to escape from the stress of everyday life, or perhaps even rent out to earn some extra income.
Several people would say that investing in a vacation property is the best decision they ever made. Their families create and share many happy memories there.
This is just one reason why ownership over this property can become a major point of conflict for spouses pursuing a divorce.
Spouses must divide the vacation home too
Whether spouses purchased the vacation home together, or invested in it with joint assets, the home is usually classified as marital property.
Therefore, like any other real estate property in a divorce, vacation homes are subject to North Carolina’s equitable distribution laws. Dividing property according to these guidelines can be complex, but when it comes to vacation properties, it is particularly necessary to consider:
- The value of the property
- The taxes and expenses connected to the property
- Individual efforts to maintain or develop the property
Consider your finances before dividing the property
Even with the factors listed above, spouses still have a few options to divide the assets invested in the vacation property. For example, the most common options include:
- Both spouses can maintain ownership, but divide the time they spend at the property
- They can sell the property and divide the proceeds from the sale
If one spouse wishes to keep the property – or at least a portion of it – they must ensure they take a practical approach instead of an emotional one. They must make sure they can afford to keep the vacation property – and all that entails.
Overall, individuals must carefully evaluate their finances before beginning the divorce proceedings, so they can determine how they wish to accomplish their goals.