Keeping a Vacation Home After Divorce
Real estate owned by divorcing couples is typically one of the larger assets that must be resolved. A vacation home is no different.
A secondary home is popular among those in Washington State who can afford it. More than one-third of the homes in San Juan and Pacific counties are for seasonal or occasional use. Owners make the trek from Seattle, Tacoma, Olympia, and other areas to escape their usual hectic pace.
When spouses with a vacation home go their separate ways, the property will likely figure prominently in property division negotiations. Selling the home and dividing the proceeds is one option, but there are other possibilities.
Share the Vacation Home with Your Ex
Unlike a primary residence, a vacation home is used intermittently. Quick weekend getaways and weeklong stress relievers are typical. Some families use the second home as a summer home base. Amicable exes can use the home at different times. Both parties still enjoy the home, but they are not under the same roof at the same time.
Sharing options include these scenarios:
- Each spouse has exclusive use of the home every other weekend
- Summer is split equally between each spouse
- Each party is allotted specific weeks to access the home.
Former spouses must have a cooperative spirit for this option. In addition, legal steps will be necessary to ensure that both parties are responsible for any mortgage, maintenance, and other expenses related to the home. An agreement needs to include what happens to the property should one of the parties pass away.
Buy the Ex’s Interest in the Vacation Home
After obtaining a fair valuation, one spouse can buy out the other spouse. This option is possible when the other spouse needs the financial compensation or has no interest in the home.
Paying an ex for their interest in a vacation home can happen in multiple ways:
- Cash is exchanged to provide one spouse with sole ownership
- One spouse relinquishes their claim to other assets of similar value
- One spouse agrees to forego spousal support in exchange for the property
Consequences of the Options
Every financial decision in the divorce process will have consequences. Refinancing the home could negatively impact the monthly payment. The spouse holding the mortgage on the vacation home may have trouble securing loans for other important purchases.
The spouse who keeps the vacation home should do so with the understanding that the property could lose value. Vacation homes also are not eligible for the capital gains exclusion available in a primary home. The same evaluation is necessary when considering keeping the primary home after divorce.
Advantages of Selling a Vacation Home
Spouses who want fewer reminders of the marriage or are unable to cooperate are usually best served by selling the property. Whether to sell or keep a vacation home should not be a decision based solely on emotions. Mortgage, utilities, property taxes, and other expenses must be evaluated logically. Keeping a vacation home is not worth jeopardizing your financial health.
The experienced attorneys at McKinley Irvin can explain all implications of keeping or selling a vacation home. Schedule your consultation by calling 206-397-0399 or contacting us online.