At its core, divorce is a simple idea – a married couple separates and become legally and financially independent of each other. Becoming “legally and financially independent” is not necessarily easy to do, however. After determining that a divorce is appropriate in light of the circumstances, the court must determine what property in the marriage is “marital property” and then determine how to most equitably divide that property between the parties.
The simplest method of identifying marital property is to take all property owned by the married couple and removing everything that is separate property. Any separate property is not divided by the court. Tennessee defines separate property as follows:
36-4-121. Distribution of marital property. –
(b) For purposes of this chapter:
(2) “Separate property” means:
(A) All real and personal property owned by a spouse before marriage, including, but not limited to, assets held in individual retirement accounts (IRAs) as that term is defined in the Internal Revenue Code of 1986, as amended;
(B) Property acquired in exchange for property acquired before the marriage;
(C) Income from and appreciation of property owned by a spouse before marriage except when characterized as marital property under subdivision (b)(1);
(D) Property acquired by a spouse at any time by gift, bequest, devise or descent;
(E) Pain and suffering awards, victim of crime compensation awards, future medical expenses, and future lost wages; and
(F) Property acquired by a spouse after an order of legal separation where the court has made a final disposition of property.
In simpler terms, separate property is anything owned by one party before the marriage, anything directly purchased or acquired through the trade or sell of anything owned by one party before the marriage, and anything specifically given to one party during the marriage. Everything else is marital property.
In Tennessee, the court may assign to each party any marital property or order the sale of any marital property with the proceeds being disbursed as the court deems appropriate and equitable. “Equitable” does not mean “equal,” though – the legislature of Tennessee has set forth factors that should be followed.
36-4-121. Distribution of marital property. –
(c) In making equitable division of marital property, the court shall consider all relevant factors including:
(1) The duration of the marriage;
(2) The age, physical and mental health, vocational skills, employability, earning capacity, estate, financial liabilities and financial needs of each of the parties;
(3) The tangible or intangible contribution by one (1) party to the education, training or increased earning power of the other party;
(4) The relative ability of each party for future acquisitions of capital assets and income;
(5) The contribution of each party to the acquisition, preservation, appreciation, depreciation or dissipation of the marital or separate property, including the contribution of a party to the marriage as homemaker, wage earner or parent, with the contribution of a party as homemaker or wage earner to be given the same weight if each party has fulfilled its role;
(6) The value of the separate property of each party;
(7) The estate of each party at the time of the marriage;
(8) The economic circumstances of each party at the time the division of property is to become effective;
(9) The tax consequences to each party, costs associated with the reasonably foreseeable sale of the asset, and other reasonably foreseeable expenses associated with the asset;
(10) The amount of social security benefits available to each spouse; and
(11) Such other factors as are necessary to consider the equities between the parties.
(d) The court may award the family home and household effects, or the right to live therein and use the household effects for a reasonable period, to either party, but shall give special consideration to a spouse having physical custody of a child or children of the marriage.
Essentially, the court considers the situation that each party was in when the marriage began and the individual estates of each party after the marriage and attempts to be fair. If the marriage lasted only a year, the court will try to reset each party to the lifestyle that he or she enjoyed before the marriage; if the marriage lasted forty years, the court will attempt to ensure that the parties live as similarly as possible after the marriage as they did during the marriage.
Subsection (d), seen above, gives some interesting insight into the equitable distribution. Child custody determinations are a separate issue from the equitable distribution of marital property, but the results of a custody dispute can factor into the equitable distribution.
The identification of marital property can be more complicated when degrees or professional licenses were earned, or when benefits or retirement accounts accrued, during the marriage. The identification and equitable distribution of property is necessarily unique to the circumstances surrounding the marriage. Further information about divorce and other family law issues can be found here.
