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Property division and vacation homes: A guide for divorce in Hawaii

On Behalf of | Sep 9, 2024 | Property Division

Divorce often involves the complex process of dividing assets between spouses, which can be particularly difficult when it involves vacation properties. In Hawaii, the approach to property division during divorce is one of equitable distribution. This principle aims to divide marital assets fairly, though not always equally, between the parties.

When dividing any property, including vacation homes, Hawaii courts consider several factors to achieve a fair distribution. One of the key principles that guides this decision is that of marital verses separate property. Only marital property is subject to division. Assets acquired individually before marriage or through inheritance or gift generally remain separate unless commingled.

Vacation properties often carry both financial and sentimental value. As a result, handling these properties requires attention to detail and careful consideration of several factors. After determining whether the property is marital or separate, the owners would next determine the property’s value. is the value of the property. It is generally wise to seek a professional appraisal to get a better idea of the current market value of the vacation home.

How do divorcing couples divide assets like vacation properties?

Those going through a divorce can choose to divide a vacation property using various methods. Three of the more common include:

  1. Buy-out. In this option, one spouse keeps the home and compensates the other the agreed upon value of the property. Compensation can be in the form of cash or an exchange of another asset of equal or similar value — such as retirement assets or business interests.
  2. Sell before the divorce is finalized. Another option involves selling the property and dividing the proceeds.
  3. Co-ownership. For some, the best option is to continue co-ownership post-divorce. This is not always easy and requires careful consideration.

It is a good idea for property owners to discuss the benefits and risks of each option before deciding which would work best for their divorce.

How can I make the process move forward as smoothly as possible?

It is helpful to prepare all necessary documentation. This includes deeds, purchase documents, and proof of contributions to the property’s upkeep and improvement.

Dividing a vacation property during a divorce in Hawaii requires a thorough understanding of local laws regarding equitable distribution. By considering the factors that affect the division and following the proper legal procedures, you can work towards a fair outcome.

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