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Property Classification in Divorce

DEC
16
2016

If the parties cannot reach an agreement, the divorce court must decide who walks away with what. Property will be classified as either marital or separate. Only marital property is subject to division. Marital property generally encompasses all property acquired by one or both spouses from the date of marriage through the final divorce hearing. 

Separate property is property acquired by the spouse before marriage. It also includes property acquired by gift or inheritance during the marriage. However, if the gift or inheritance is treated like property of both spouses, the court may find the property has been commuted to marital property and is subject to division in the divorce. 

Separate property that appreciates in value or generates income during the marriage potentially adds another asset subject to division if the court finds the non-owner spouse contributed significantly to its preservation or appreciation. 

Retirement accounts and pensions associated with employment during the marriage are also subject to division. Disputes over the value of these retirement benefits frequently arise, particularly when the benefits began accruing before the marriage. Expert witnesses, such as a CPA, may be needed to bolster a party’s position on this issue. 

Once the marital property is identified and valued, the court will equitably divide the property after consideration of several factors found at Tennessee Code Annotated § 36-4-121(c). The weight given to each factor will depend on the circumstances of each case. One factor which deserves special attention in cases with a misbehaving spouse is “wasteful expenditures” for purposes “contrary to the marriage.”

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