Vacation homes in the divorce process/division of assets
Skilled Attorneys Help Advising on Vacation Home Division in Ocean County and other Jersey Shore Localities
Divorcing in New Jersey means dividing one household into two through an equitable division of marital assets. This often includes vacation homes and shore houses in towns like Sea Bright, Sea Girt, Lavallette, Belmar, and Long Beach Island.
Equitable means what is fair. Either the divorcing parties will agree to what they consider a fair division, which the court will approve, or the court will equitably divide assets if the parties cannot agree. They may also resort to mediators to resolve their disputes regarding property division. A mediator or judge knows that before splitting the assets, they must first determine marital property and separate property. All property acquired during a marriage is marital property, except inheritances, personal injury awards, property owned before or after marriage, and property the parties agreed to keep separate in a prenuptial or postnuptial agreement. Typical marital assets include the family residence, bank accounts, vehicles, and other real property acquired as investment or vacation homes.
Aspects considered by the court to determine property division in Manasquan NJ
Fairly dividing assets does not require the court or the parties to split each marital asset down the middle. So, the spouses may not have to sell the family home to divide the proceeds in each instance. What is equitable for dividing a family residence is defined by each marriage, considering how long the couple is married, two years or 20. Also relevant are the family home’s market value, equity, and debt. In dividing a residence, a court also considers each party’s age, health, income, debt, and hardships. In addition, it looks at the separate property contributions to the property by each party, the child custody arrangements, and the standard of living during the marriage. Whether one party stayed home to raise kids, contributed to the other spouse’s education, or put their career on hold to help the other matters too. If one parent primarily cares for the children and needs the residence for the children, the court also considers that. And finally, the tax consequences of distributing the property are also a factor.
As to dividing the couple’s vacation home, the considerations differ from the primary residence, though the parties may link the vacation home to who gets the house. For example, the parties may decide to sell the vacation home and split the proceeds or award one party the property as an offset to the other party’s unequal distribution, say, of a business or the primary residence. The home’s value is the fair market value, meaning the price it would sell on the market. A realtor may supply comparable home prices to find that value, or an appraiser may calculate a value.
Parties must decide what they wish to do with the secondary property, sell it or keep it.
Both parties must agree to sell, or else the court decides. And if the parties do not outright transfer the property to one party or another, the court can allow one party to own or occupy the vacation property for a time until its future sale. Or one spouse can buy the other’s interest in the vacation home if they can afford the sale price or, minimally, the mortgage payoff. If there is a mortgage on the property, the person assuming the mortgage must refinance to eliminate the other spouse’s obligation on the loan, so they are no longer on the hook for the mortgage. The party refinancing must have the ability to maintain the property as well as pay the mortgage. Since the parties split debts and assets, the debt one party assumes for the vacation home may offset the additional value they receive in acquiring the property as sole owner.
So, for example, if a vacation home has a fair market value of $400,000.00, the parties would be entitled to $200,000.00 each. That assumes the property is debt-free, meaning they owe nothing on a mortgage or the couple paid cash for it. But if one party is buying the vacation home, they would owe the other spouse $200,000.00. And if they did not pay off the mortgage, the party acquiring the home would owe the other party $200,000.00 less one-half of what they owe on the mortgage. Thus, if the mortgage were $50,000.00, the purchasing party would owe the other spouse $175,000.00. That is one possible scenario of splitting a vacation home.
Is it Possible to split the vacation house time in Seaside Heights NJ?
Of course, they can also keep the property and split their vacation home time. But this can be complicated if the parties do not cooperate. It could also be unworkable if one party has more money to pay a mortgage and the maintenance on the property. Moreover, such an arrangement may cause friction if the couple has differing upkeep standards, such as one party does not maintain the property the same as the other, leaving it messy or damaged. And the memories stored in the place may make it psychologically and emotionally challenging to share. Similar difficulties arise with investment properties, like rentals. The spouses may not agree on who should rent the property, how much to charge, or how the division of labor breaks down. Rental properties need management for plumbing, landscaping, and structural integrity of the property. They must agree on the specifics of who does what.
And they do not always agree, even between the most amicable of divorcing couples. Divorce occurs because people cannot remain married any longer for various reasons. A couple may divorce because they are such opposites that they cannot agree or cooperate on anything from making simple decisions to significant lifestyle choices. Keeping property together may be too much to manage over a long time. There may also come a time when either party needs to sell to pay for other debts that arise. So, if they sell the vacation home or investment property, there needs to be a provision for what the parties do if they place the property on the market. However, the more the parties can maintain a cooperative and tolerant relationship, the more options they have with the vacation home and all property they must divide.
Contact our Monmouth Family Law Experienced Team of Attorneys Today
Fortunately, divorcing couples with properties can rely on the advice and creativity of family law attorneys at The Law Office of Peter Bronzino, who has helped others come to reasonable arrangements with real property.
If you are divorcing, know that you have more than one route to take to equitably dividing real properties. First, talk to a family law attorney who helps divorcing parties craft viable agreements for real property owners other than a family residence.
We can assist you with this process, as we often do for clients in Beach Haven, Wildwood, Brick, Brielle, Island Heights, Lavallette, Manasquan, Mantoloking, Normandy Beach, and throughout Monmouth and Ocean County.
Contact our office by calling (732) 812-3102 to discuss your current situation in a free, personal and confidential consultation.