Mountain properties and vacation homes can be as important to address in a Colorado divorce as the primary residence where spouses live together. Vacation homes often command premium prices due to their proximity to popular attractions and high-demand markets.
They can be sources of revenue for the family. They also tend to have many happy memories attached to them, leading to emotional disputes between spouses. Understanding the challenges of addressing real estate in the mountains and vacation homes can make it easier for people to navigate property division proceedings effectively in a Colorado divorce.
When are vacation properties divisible?
Real estate holdings are often part of the marital estate. Even if one spouse owned the vacation home or mountain property before marriage, the property likely appreciated in value during the marriage. The increase in value may be part of the marital estate even if the original fair market value of the home or cabin is the separate property of one spouse.
Under Colorado’s equitable division standards, any assets acquired during marriage or with marital income are likely subject to division. The equity accrued or the price appreciation that occurred during marriage is often divisible. In cases where spouses bought the property during the marriage, its entire value may be marital, even if the deed only features one spouse’s name.
Valuing mountain properties and cabins can be difficult. Unlike urban homes, there may not be many recent sales of comparable properties to use as a baseline for valuation. Real estate professionals may struggle to effectively calculate the fair market value for the property, especially if the couple has invested in prestige finishes and other valuable improvements.
Additionally, spouses may need to factor in any income generated by their mountain properties and vacation homes. Savvy owners frequently offer their properties as short-term rentals on platforms such as VRBO and Airbnb. They may need to factor that income into property division and financial support arrangements.
Partnering with an experienced high-net-worth divorce attorney can help Colorado property owners protect their finances during a divorce. Those with mountain properties and vacation homes may need support valuing their holdings and negotiating arrangements that are reasonable when addressing those valuable assets, and that’s okay.