One of the most difficult aspects of a New York divorce is dividing up the marital property – particularly when there are complicated real estate holdings.
If you and your spouse have a vacation home, there are a few things you need to understand as you approach the asset-division process of your divorce.
1. A vacation home in New York is treated the same as your residence
Vacation property inside this state must be treated the same as a couple’s residential property. Under New York’s equitable distribution laws, all property acquired during the marriage – with some exceptions for inheritances and separate property carved out through premarital or postnuptial agreements – are generally considered marital assets, regardless of how the deed is titled.
Even in situations where vacation property was owned by one spouse before the marriage, the other spouse’s contributions to that property’s mortgage payments, maintenance or remodeling costs may need to be considered. It may be necessary for the spouse who owns the vacation property to compensate the other spouse for their share of the property’s increased value.
2. Rental income from the vacation home may need to be considered in financial calculations
Many couples use their vacation properties as a source of rental income, whether through short-term leases or as an Airbnb. If your vacation home generates income, that will most likely have to be included when income is calculated for issues of spousal support or child support.
In many cases, it may be more pragmatic to sell vacation property used as a rental and divide the proceeds. If one spouse does want to keep the property and its income, however, it would then become necessary to buy out the other spouse’s interest.
3. Different rules may apply to vacation homes in other states or countries
If the vacation property is located outside of New York, different rules may come into play, especially when the property is located in states with community property rules or another country. Every country has its own legal framework for dealing with property in divorce, and not all of them recognize foreign divorce decrees.
Even in states that follow equitable distribution rules, there may be nuances in the laws that affect how your vacation property is treated. It’s essential to have experienced legal guidance to navigate these issues.
At The Law Firm of Poppe & Associates, PLLC, our focus is relentless advocacy for our clients. If you or someone you know is considering divorce, reach out to schedule a consultation at 646-665-3903 or by contacting us online.
Let Me Be Your Brave
Mia Poppe, Esq.
Managing Partner