Although it might be assumed that a “house is just a house” when comparing the “marital residence” to a “vacation home” under New York divorce law, that assumption is probably incorrect. Although the general rule is that a house purchased during the parties’ marriage is “marital property” and therefore subject to “equitable distribution” upon the couple’s divorce, separation or annulment, the primary marital residence and the vacation home may be treated quite differently by the Court as well as during settlement negotiations.

Houses qualifying as marital property in a divorce are often ordered by the divorce Court to be sold in order to liquidate its equity for division between parties, satisfy existing mortgages and/or reduce payment obligations for one or both parties, among other reasons. This is where differentiation between the primary marital residence and the vacation home may become important.

When determining what to do with a house, the divorce Court will have to consider the value of the property, when it was purchased, whether either party or both contributed “separate” or “premarital” funds to its acquisition or upkeep and other facts and circumstances.

If the house in question is the primary home of the couple and the couple has school age children, then the argument is often made to the Court that the marital residence’s sale should be delayed because of the overriding importance of the children’s stability, continuation in their school district, relationships with their friends and existing involvement in extracurricular activities for example.

However, this “child centered” impact on disposition of the marital residence is almost never the case with vacation homes. A vacation home is most often treated in a much more matter-of-fact manner by the Court, generally closer to division of a bank account.

If a vacation home is ultimately determined to be a marital asset, the divorce Court will determine its value (routinely established by a Court selected licensed appraiser), any separate property claims asserted by the parties and will likely order its sale, with the proceeds credited between the parties in percentages to be determined by the Court at trial, based upon the totality of facts and circumstances, other assets, debts and a set of factors set forth in statutory law and relevant case law that the Court may consider in its ultimate equitable distribution decision. Of course, the above is a hypothetical situation where there is a divorce trial and the divorce Court in its trial decision determines how parties’ assets will be dealt with and divided equitably.

Before any trial in a divorce action, the parties have numerous opportunities to negotiate and achieve a settlement between them. Since the parties are usually in a better position to decide how they wish to live post-divorce than to have a stranger, meaning a Supreme Court Justice, decide their fates, the disposition of the marital residence and a vacation home may be determined by the parties with assistance of their respective attorneys as part of the couple’s overall settlement scheme.

During divorce settlement discussions it may become known that neither party wishes to retain the vacation home and an agreement to sell it and divide the proceeds may result. Or, it may become revealed that one party has a desire to buy-out the other person’s interest in the vacation home. If the value of that person’s interest in marital residence is close to the value of the other person’s interest in the vacation home, it may be possible to “swap” respective interests and one person walks away owing the marital residence and one person will own the vacation home. This is a simplified example of course. Many possible settlement scenarios exist and these will be dependent on the unique facts and circumstances of each case. However, even in settlement negotiations, the marital residence and the vacation home will need to be looked at differently, especially when children are involved, even though both are intrinsically just houses.

How vacation homes and the marital residence are treated whether the couple is working towards a settlement agreement or if the divorce case has to be tried by the Court is only one of the numerous issues that must be addressed by the divorcing parties. Robert B. Pollack, Esq., principal attorney of The Pollack Law Firm, P.C. in Jericho in Nassau County is available to assist and represent parties in divorce and all other matrimonial and family law cases. Call today to schedule a free consultation: (516) 938-3330.

DISCLAIMER: This article is intended to provide only general information for entertainment purposes and should never be relied upon as legal advice. One should seek the assistance of experienced matrimonial counsel to assist in explaining the law, options and making important decisions in any divorce, matrimonial or any family law matter.

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