Dividing property in a divorce can be a complex process, especially when it involves high-value assets like a vacation home. In Tennessee, family law judges follow equitable distribution rules when dividing disputed property, meaning that they aim to divide it fairly, though not necessarily equally between spouses. This often isn’t an easy task.
When both spouses have an emotional or financial interest in a vacation home, deciding who gets to keep it—or whether it should be sold—can become a major point of contention between them. Ideally, spouses can find common ground with the help of their attorneys. If not, the fate of a vacation property will rest with the court.
Martial vs. separate property
Before determining who gets a vacation home, the judge assigned to a couple’s case must first classify it as either marital property or separate property:
- Marital property generally includes assets acquired during the couple’s marriage. This is true even if one spouse’s name is on the property’s title. If the vacation home was purchased jointly or with marital funds, it will likely be subject to division.
- Separate property generally includes assets owned by one spouse before marriage or acquired through inheritance or gifts directed to them alone.
If one spouse purchased the vacation home before marriage and kept it separate from marital finances, they may have a stronger claim to keep it. However, if separate property was commingled—such as using marital funds for mortgage payments, renovations, or upkeep—the court may consider it partially or entirely marital property.
If the vacation home is deemed marital property, the court will look at several factors to determine its division, including the overall value of the marital estate and how the distribution of interests in the home could impact broader property division goals.
If spouses want to resolve a dispute amicably
If both spouses want to keep their vacation home, there are several ways to resolve that dispute:
- One spouse buys out the other: The spouse who wants to keep the home compensates the other for their share, often through a lump sum or asset trade.
- Selling and splitting proceeds: If neither spouse can afford to keep the home, selling it and dividing the proceeds is a common solution.
- Co-ownership agreement: In rare cases, former spouses agree to continue sharing ownership, particularly if children regularly use the home.
Because vacation homes are often contentious assets, dealing with them proactively tends to be wise. Seeking personalized legal guidance is a good way to get started.