Your vacation home can represent many different positive memories in your life. You may have spent happy days with your family during your children’s school breaks. It may have been a relaxing way to get away from the stress of your daily life. However, vacation homes are also valuable property, which can make property division a challenge if you and your spouse decide to end your marriage.
The fate of your vacation home could depend on whether it is marital property.
In the state of Michigan, your property is not necessarily divided in half when you divorce your spouse. Instead, the court will divide your marital property in an “equitable” way. Marital property includes most of the property that you acquired during your marriage, including the money you earned and any real estate that you may have purchased.
If you purchased this house during your marriage or paid for it with money earned during your marriage, the court will likely consider your vacation home marital property.
In some instances, however, the court may consider your vacation home separate property. If you and your spouse have a prenuptial agreement in place, that agreement may state that your vacation home is separate property. The court may also consider your second home separate property if you purchased it before you and your spouse tied the knot. In these cases, your vacation home will go to its owner.
What happens if the court considers your vacation home a part of your marital property?
In some cases, you and your spouse may choose to sell this property and divide the proceeds. While selling your house may be time-consuming and stressful, it can also simplify property division. It can also help you avoid conflict.
However, selling your second house is not the only option available to you. You may be able to keep your vacation home if you can buy out your spouse’s share. As Forbes notes, this does not necessarily involve taking out a loan or pulling the funds out of your bank account. You could also sacrifice your share in other valuable assets like the family home, a vehicle or other jointly owned property.
While property division can be complicated, it is possible to enter this new phase in your life with ownership of your getaway.