Vacation homes provide a welcome respite from the grind of everyday life. If you and your husband or wife own one, you likely have place you can enjoy while making memories with your friends and family. Of course, like other marital assets, you must decide what to do with your vacation house after your divorce.
If you are contemplating divorce, you may already know that Pennsylvania judges typically divide marital property based on what is fair for each spouse. With that in mind, you can begin to think about what happens to your vacation home when your marriage ends. Here are three possibilities.
- You keep your vacation property
If you love your vacation property, you have the option of keeping it after your divorce. In this scenario, you give up other assets to secure exclusive ownership of the home. If you plan to go this route, though, you should seek tax advice. As a second home, your vacation house is likely subject to capital gains taxes should you decide to sell it in the future.
- You split ownership of the house
Despite your divorce, you and your soon-to-be ex-spouse may not have an acrimonious relationship. If that is the case, continuing to jointly own your vacation property may be an option. Of course, before deciding to split ownership, you should think about and allocate upkeep costs. You probably also want to draft a usage schedule.
- You sell the vacation home
Selling the house and splitting the proceeds is perhaps the most common approach to dealing with a vacation home during divorce. Remember, though, valuing a vacation property can be difficult, especially if it has rental-income potential. Further, if your house is in a secluded location or expensive area, finding a buyer quickly may be challenging.
As you can see, when it comes to addressing the vacation property you own with your partner, you have some options during your divorce. By thinking carefully about your goals and financial situation, you can likely choose the one that is right for you.