Timeshares are unique assets because you share ownership of a property with multiple people. You have to balance between strict usage schedules, taxes and fees and guidelines to follow in “your” vacation home.
You also have to share a property with a former spouse if you divorce. You should know what your options are when you file for divorce especially with a timeshare. There are three main options that you and your partner can consider during the divorce proceedings.
In Kentucky, divorcing couples are allowed to divide their assets and debts into a separation agreement, a document stating how the spouses will divide their marital property. The courts have to approve the agreement to assure the ‘fairness’ of the distribution.
If you notice your spouse wants the timeshare more than you, you can award the timeshare in their favor in the agreement. It might help down the line if you want a specific asset more than your spouse, or it will relieve you of a specific burden.
Before you award it, have the property appraised and include the equity to divide between the two of you. If there is a debt, have the agreement state how the debt is paid and when. You can also require your spouse to refinance or remove your liability within a set time period.
Maybe you and your partner do not want the timeshare. The easiest solution is to sell your shares and divide the profits. Ideally, you want to sell the timeshare before your divorce is finalized, so each of you can cover the costs from a joint account.
Depending on the economy or timeline, it might not be reasonable to sell before a finalized divorce. What you can do is have one person take over the sell and be reimbursed post-divorce. It might mean more equity, more profits or another arrangement that works for you.
If there is a loss, both of you will suffer a financial burden. Before selling, consult with a financial advisor to determine the best time to sell or other options for your circumstances.
This option won’t work for every couple, but you could share the property.
It requires a comfortable relationship with your former spouse as well as clear guidelines for property rules and schedules. You could include in your separation agreement who receives vacation time when and how the fees are divided between the couple.
The agreement should include a plan if someone stops payments. For example, if someone is continuously late on their share of the fees, they need to forfeit vacation time and address a new payment schedule.
Whether or not you love your timeshare, it is an asset, and if it is martial property, then it is eligible for division like all other martial property. You have to decide with your former spouse what the best approach for your circumstance is.
Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Sheehan, Barnett, Dean, Pennington, Dexter & Tucker, P.S.C. or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.