Married couples in Texas may share quite a few valuable assets with one another. They each have an interest in the income that the other earns. They also share the value of any property acquired with marital income.
Texas is a community property state, which means that almost everything that spouses share with each other is subject to division when they divorce. Spouses often focus on their most valuable assets first, such as the home where they live together. In addition to a primary residence, many couples in Texas acquire vacation homes where they may enjoy holidays or long weekends with their families.
What typically happens with a vacation home in a Texas divorce?
Spouses need to know its value
A cabin, lake house or other vacation home in Texas may not be worth nearly as much as a primary residence, but it can still be worth tens or even hundreds of thousands of dollars. The longer people have enjoyed their vacation property, the greater the difference between what they initially paid for the home and what it is worth today. Couples may find that they need to hire an appraiser to determine what the property is worth even if they have no intention of listing it for sale. Only when they know the value of the property and therefore how much equity they have accrued in it can they begin negotiating away to address the vacation home in the divorce.
Spouses can sell or buy each other out
The two most common solutions for vacation homes during property division are to list the property for sale or to arrange for a buyout. One spouse can purchase the property by refinancing and offering the other spouse their share of equity. It may also be possible to use other resources instead of the accrued equity in the vacation home to buy out a spouse during the property division process. Spouses may sometimes disagree about how to handle a vacation home because both of them would like to retain the property after a divorce or because they don’t agree on its value.
Thinking about the financial and upkeep responsibilities of a vacation home might help people set realistic goals as they prepare for a Texas divorce featuring a complex marital estate. Those who address the most valuable marital assets they own early on can minimize conflict later in the divorce process.