For people who own real estate such as a vacation home, divorce can be particularly complicated. In Texas, community property consists of assets and debts acquired during the course of the marriage. If real estate was purchased in that time, or if the property was acquired before the marriage date but the value increased while the couple was married, then the value of property may be subject to division.
Following are a few things divorcing property owners might want to consider when negotiating for a fair divorce settlement.
How would the cost of upkeep figure into keeping the property?
This can be a particularly difficult aspect to consider when you're in the midst of divorce. For example, you might have every intention of using and maintaining a vacation home, much as you did during your marriage.
But people's attitudes and priorities tend to change after divorce, and sometimes people find themselves saddled with a vacation property that turns out to be more of a burden than a place of enjoyment. This outcome could be especially stinging if the other spouse received valuable property in exchange for a share in the real estate.
While Texas has no state property tax, local property taxes and the cost of insurance should also be accounted for when negotiating a divorce settlement.
If you have adult children, are you interested in keeping a vacation home for their benefit? Or does it make more sense to sell the property and distribute the proceeds?
Every family is different, and the answer here will depend on your family's unique dynamics and financial situation. Often families have a strong sentimental connection with their holiday getaways, and the kids' happy memories of the place may be a significant factor to consider.
Still, if one child uses the property more often than the other, or if one sibling does more maintenance and upkeep, or if one child wants to sell while the other doesn't, then you could be looking at a possible family conflict -- and in some cases, a lawsuit.
It may be appropriate, then, to agree with your spouse to sell the property and distribute the proceeds accordingly, either between each other or to your children.
Any kind of real estate, whether it's your family home or a beach house, should be accurately and comprehensively appraised in order to reach a fair divorce settlement.
Accurate property valuation is a crucial aspect of divorce for individuals with significant assets. At the Law Office of Mark M. Childress, we help people in the Fort Worth area obtain accurate valuations and reach reasonable settlements that account for now and years to come.
For more on marital property division in Texas, please see our overview of "Protecting Your Assets."