The Colorado landscape is dotted with mountains and lakes, both of which lend themselves well to the establishment of a vacation home. Many families in Colorado have a vacation home where they can enjoy the summer or the winter holidays together. These properties can often be a major source of contention in Colorado divorces.
Much like with the main home for the family, the vacation home or second home can also be an asset that has significant emotional ties for both spouses. Additionally, like any real estate, a vacation home likely represents substantial value.
It is normal and reasonable to wonder about how the courts may handle your vacation home in your divorce proceedings. There is no clear answer, as the judges presiding over divorces have discretion regarding how they handle the terms of the divorce.
Common ways the courts may dispose of secondary or investment properties
The primary residence for the family may receive some special consideration from the courts during divorce proceedings. This is particularly true of cases with minor children who will live in the home after the divorce. Secondary properties, including vacation homes or investment properties, are typically treated as most other assets in a divorce. In other words, the courts will typically apply the equitable distribution standard to the real estate in question and other marital assets.
If it was the sole property of one spouse prior to the marriage, they will most likely retain it in the divorce. Barring that scenario or a prenuptial agreement, your vacation home is likely subject to division. Provided that you have acquired the vacation home during your marriage or pay the mortgage with income earned during marriage, you and your spouse will likely share the value of the home.
The courts may award the vacation home to one spouse and allocate other assets of a similar value to the other spouse. The courts could also order the refinancing of the property, with the spouse not retaining the property receiving a portion of the equity as a cash out in the transaction. Other times, they may order the liquidation of real estate assets. That means that the courts will order you to sell the home and divide up the proceeds in a specific manner.
How important is the vacation home to you?
People often get fixated on real estate holdings in divorce proceedings. This is both because they are of substantial value and because they often have emotional value for both divorcing spouses. However, you may want to focus more on the value than on the emotions. You can use the proceeds from the sale of the property or your share of its equity to purchase a new vacation home where you can create memories that won’t stem from your marriage.
If retaining the cabin or vacation home is very important to you, that should impact how you approach your divorce strategy. Discussing your wishes for specific assets with a family law attorney can help you plan the best strategy to secure the outcome you desire in divorce.