Vacation and Timeshare Property Division

A big part of a divorce is the division of assets and property. In the easiest of cases there is only the home in which the parties resided. However, some married couples acquire vacation homes, lake houses, ranches and even time shares. The division of these properties can be tricky and sometimes painful. There are many questions associated with the division of such secondary properties.

First things first ­ What kind of asset is it? A wholly owned single family or condo vacation home will be much easier to divide or sell than a points-­based or deeded timeshare. Deeded timeshares are transferable. However, one must consider the fact that they typically have not appreciated, but rather depreciated in value and are usually sold at a fraction of what they were bought for. Further, many resorts managing the timeshares do not allow form subsequent divisions of deeds, thus requiring one spouse to take the entire timeshare as a whole or sell it to a third party. Points­-based timeshares are also transferable, however unlike deeded timeshare, the sale or transfer must be submitted to the club or resort, who typically has the first right to purchase at the price offered by the buyer.

Next Up ­ Who wants it? Is only one party realistically interested? Will children have access to the property? Are both parties going to continue to use the property? If only one spouse is interested in the property, why make a mountain out of a mole­hill. Establish a value and apply it to the total divisible assets and move on to more disputed assets.

Difficulty sometimes occurs when both parties want the property. Determine if both parties can amicably continue use of the property. Can a set of rules related to the property use be established? Much like the custody of a child, “custody” of the property can be arranged if the parties can come to an agreement. The property may be split weekly, monthly or even bi­annually. Further, the agreement can include the number of visitors allowed, maintenance and upkeep, payment of taxes, mortgage and insurance.

Can or should both parties continue to pay for the upkeep of the property? Even if both parties can cover the costs in the beginning, the agreement must consider the outcome if one fails to pay or becomes unable to cover the costs. Another consideration is whether the parties will have the ability to transfer their ownership to outside parties later down the road and if each party has a right of first refusal.

What if a shared use of the property is not a possibility? There are three options: (1) award by the court to one spouse, (2) forced sale of the asset, or (3) donate it to charity (if they are willing to take on the taxes, fees, dues, etc…). All options can be expensive and one must take a step back and determine if the legal costs of “winning the asset” outweighs the benefit of the use of the asset in the future.