The painful emotions that surround divorce are often amplified by the stress or anxiety of losing the family home, the car or personal belongings. The financial implications of divorce for Tennessee residents make it vitally important to get it right in the final divorce settlement, especially concerning property division.
How is property divided?
Tennessee divorce laws are guided by the principle of equitable distribution, which means that the court will determine property division that is fair, but not necessarily equal. Marital property encompasses everything that has been acquired during the marriage, including both assets and debts. Commingled or shared personal assets and debts also includes the mortgage, car loan, one spouse’s business income or dividends.
Not subject to division is property owned or acquired by either spouse prior to marriage, including capital gains, inheritances or other gifts, awards for civil damages, or victim compensation for pain and suffering or medical expenses.
The judge will factor in each spouse’s needs and means as well as contributions during marriage, including:
- the tangible or intangible contributions of each one spouse to the education, training or increased earning power of the other spouse
- the relative contributions of each party during marriage as wage earner, childcare provider or homemaker
- the relative earning power of each party in the future
- the economic circumstances of each party at the time of property division, including tax consequences associated with the sale of assets
- the amount of social security benefits available to each spouse
How is marital property determined?
Since the court must know the value of all divisible property as well as debts, both spouses will need to determine assets by their fair market value. A spouse may also estimate the replacement value of an asset that is not marketable, based on what the cost would be to replace it.
Once the valuation of the entire estate has been determined, the court will rule on the best way to divide shared property such as the family home, the car or other assets. This may include the auction sale of property, the division of proceeds from the sale of property, or the transfer of title of property. Where there are children, the judge will also determine whether the parent who gets primary custody should keep the family home.
For Clinton and Anderson County residents contemplating divorce, it is essential to have personalized and attentive legal representation to help them protect their assets and their futures.