If you own a vacation home, odds are that you consider it a place of serenity and fond memories. When couples separate and divorce is on the horizon, the question is inevitably asked: “What happens to our vacation house?”

First, you and your spouse can always agree on what to do with your vacation home. Examples of the types of agreements you and your spouse could reach are: agreement to sell it and divide the proceeds, one spouse could buy-out the other spouse’s interest and keep the home, or perhaps the home becomes part of a bigger picture estate plan or trust so that children and grandchildren may continue to enjoy it, despite any divorce. You can agree with your spouse about the fate of your vacation home at any time during the divorce process. You don’t have to wait until the divorce is final.

If you and your spouse cannot agree and you have a contested divorce case, your trial will likely be a year or more away. The court will decide what will happen to your vacation home only at the end of the entire process – and the court is limited to two options:

1. Order the sale of a jointly titled vacation home and the equal division of any sales proceeds; or
2. If the vacation home is titled only in one spouse’s name, the court cannot transfer title to the other spouse. However, if the home was acquired during the marriage with marital funds, the non-titled spouse has a martial property interest in the home. The court may order the spouse who owns the home to make a monetary award payment to the other spouse in consideration of their interest in the home and as part of the overall equitable distribution of marital property. “Equitable” does not always mean equal – who gets what depends on the courts consideration of a variety factors – some of which include the duration of the marriage, each party’s age, health, financial circumstances, and contributions to the marriage and property, and the circumstances that contributed to the divorce.

If you and your spouse do not agree on what to do with your vacation home, consider that prior to the actual divorce, the court cannot:

• Force you or your spouse to sell your home;
• Force you or your spouse to refinance any debt associated with the home;
• Force your or your spouse to move out of a jointly titled vacation home. The one exception to this is if a party is ordered stay-away from a vacation home being used as one or both parties’ residence incident to a domestic violence protective order;
• Force you or your spouse to pay the mortgage or carrying costs.

Also, if you and your spouse do not agree on what to do with vacation home, and it is titled in joint name or solely in your spouse’s name, the court cannot transfer it to you.

You and your spouse can enter into an agreement to do something other than what the court can do, which is legally binding and enforceable.

Before filing in court or entering into any divorce related agreement, you should consult with a family law attorney to determine what effect this has on the other issues in your case.

The Court has more options when it comes to what can happen to your primary home in a divorce. For more information about that, see our article, “What does divorce mean for your home?“

For more information, contact Erin at elkopelman@lerchearly.com.