What happens to vacation property in a divorce?

| Mar 19, 2020 | Property Division

If you and your spouse own vacation property, don’t be surprised if it becomes a hot-button issue in your divorce. Vacation properties are usually valuable, and some spouses tend to see them as a “prize” or a sort of trophy that they can claim when a marriage sours.

So, who really has the right to the vacation house? Even though California law is a community property state that requires divorcing couples to split their marital assets more-or-less 50/50, there’s no easy way to divide up a single asset. (And don’t think that you can skirt that rule just because your vacation home is in another state. California is likely to still consider it “quasi-community” property and treat it just like any other marital asset during the divorce.)

If you happened to own the vacation home prior to your marriage, you may be able to remove it from the pool of marital assets altogether — but that’s still a tricky financial issue. If you renovated the home during the marriage with marital funds, that may confuse the issue. If the property increased in value while you were married, your spouse may have some right to half of that increased equity.

Usually, this leaves you with just a few options:

  • You can sell the vacation property and split the proceeds. Sometimes, that’s the only real option when neither spouse will give in.
  • You can let a judge make the decision. Usually, this is the least popular option and can leave everyone involved dissatisfied.
  • You can make an agreement. If one of you is more emotionally attached to the property than the other, it’s usually best to “trade” for an asset of comparable value.

Ultimately, it’s always wisest to have some experienced advice when it comes to complex property divisions during your divorce. That’s the best way to protect your rights and your future.

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