Timeshare Division in a Divorce
A timeshare is an asset (or liability, depending on circumstances) that must be divided in a divorce just like any other asset or liability. However, unlike houses or cars, timeshares are inherently difficult to sell.
If one spouse owned the timeshare prior to the marriage, then he or she may be able to keep such as premarital property if there was a prenuptial agreement, or if the timeshare has not appreciated much in value.
However, if the timeshare was purchased during the marriage, the parties will essentially have three options. Just like any other asset to be divided, the parties can decide to share such (rarely advisable), sell the asset, and split any proceeds or deficiency, or one spouse can buy out the other one.
If both parties truly love the timeshare, and the parties’ are amicable and have good communication, in theory, they can jointly retain the timeshare and each utilize a week, or alternate years if they only own one week per year. However, continuing to share an asset after a divorce may be difficult, so the parties truly have to be on board with communicating with each other. In addition to that, the dissolution agreement should specify who pays the maintenance fees, any other fees, who can use which week(s) when, what happens if a party wants to redeem points, etc. Furthermore, it is also beneficial for the parties to work together and ensure that their estate plans reflect their wishes as to whether the timeshare would pass to one party if the other party were to pass away, or if it would pass to a child or other beneficiary (this will also depend on how the parties hold the title to the timeshare).
While it is difficult to sell timeshares, it can be done. However, both parties should be prepared to face a financial loss if the timeshare is sold as they do not often appreciate. If the sale of such is not final by the time of the divorce, then the dissolution agreement should specify how the parties are going to sell it, by what date, and how any deficiency would be split. If the parties do make a profit, the agreement would need to specify how that would be split as well.
The last option, which is the most common, is for one spouse to buy out the other one. That means that the value of the timeshare needs to be determined and agreed upon and then the party who is going to retain it will need to transfer funds to the other party to cover the other party’s value of interest in the timeshare. Again, a dissolution agreement should identify the specifics for this, such as how and when the payment will be made, what happens if the payment is not made and when does the other party remove his or her name from the timeshare. Timeshares are usually located outside of the parties’ home state and thus, an additional attorney is usually required to draft a quitclaim deed to transfer the property.
If you have questions, or need assistance in dividing your timeshare, or other assets, through your divorce, contact us and let Wolf & Shore Law Group go to work for you and help make your family law matter easier, not harder. Ever Argue with a Woman? Click here, call us at 203.745.315, or email us at email@example.com.