The concept of fractional ownership is one that is often useful in divorce with high-value or unique assets. Fractional ownership grants both parties a percentage of ownership, which also allows them usage and income-sharing rights. For some parties, this is the ideal way to own an asset that they would otherwise not be able to afford. In high-asset divorces in the Birmingham area, it may be a way to let both spouses continue to benefit from assets that they aren’t willing to split.
Fractional ownership may come into play during the division of assets in your Birmingham divorce. Let us help you figure out which solutions best fit your needs—call Kirk Drennan Law at 205-953-1424 now.
How Fractional Ownership Affects Timeshares
Timeshares are a form of fractional ownership that Birmingham couples may invest in for the sake of having a family vacation home. Spouses may opt to take their fractional ownership one step further by dividing their shares up more during divorce. This is often the case when selling the timeshare is too time-consuming, expensive, or stressful, and both parties would rather wait until the market improves. Selling a timeshare is considerably harder than selling a home that you own in its entirety.
If the divorcing couple opts to split the timeshare, they have to split both the usage rights and the costs associated with it. Your plan should include both recurring expenses, such as usage fees, and unexpected expenses, such as maintenance. You must also address who has the right to use the property and when.
Fractional Ownership of Jets
Fractional ownership is often a viable option in high-asset divorces involving extremely expensive assets that neither party can afford alone. The terms for sharing a jet are largely the same as a timeshare—you must negotiate both usage rights and expense sharing.
One key difference is the fact that the expenses of owning a jet tend to be extraordinarily high, so you must be sure that both parties can afford their share. Additionally, owning a timeshare may only give you one or two weeks per year you can use it. That’s less time to split up. A jet, on the other hand, may be available to you year-round. Figuring out access rights may be more challenging.
Other Assets That May Be Owned Fractionally
Jets and timeshares aren’t the only assets that can be fractionally owned by Birmingham couples. Other assets that may be subject to fractional ownership include luxury real estate, exotic or high-end cars, artwork, and valuable collectibles.
Factors to Consider
There is a reason you don’t hear about fractional ownership too often in Birmingham divorce cases. It is legally complex, and it requires you to maintain an ongoing relationship with your ex-spouse.
Even with legal contracts drawn up regarding usage rights and financial obligations, you could still run into situations where your ex-spouse does not hold up their end of the agreement. It’s your year to use the timeshare, but when you arrive, they’re already there with their new partner and stepchildren. There’s a breakdown of one of the main components of your jet, but they claim they can’t pay their 50% because of financial difficulties.
In both cases, they may be in violation of your divorce agreement. However, you have no immediate remedies—your timeshare vacation is ruined, or you have to fund the jet repairs yourself and hope they reimburse you.
This can be very stressful and time-consuming if your ex is someone who is commonly low on cash or unable to fulfill their promises, so it’s important to think about that before agreeing to fractional ownership. For example, if your marriage is largely ending because they took on $30,000 of credit card debt behind your back, perhaps sharing ownership of an expensive asset is not how you want to spend the rest of your life.
Additionally, you’ll want to think about an exit strategy. Few people want to co-own an asset for the rest of their or their ex’s life, so how long do you want to hang on to it? Under which conditions do you want to sell, or would you consider letting them buy you out?
Pursuing Divorce? Contact Kirk Drennan Law Today for Help with Your Birmingham, AL Divorce
The team at Kirk Drennan Law is here to support you through your divorce. We serve people throughout the Birmingham area, providing solutions to your most complex divorce problems. Call us at 205-953-1424 or fill out our online contact form to set up a time to talk to our team now.