One of the most complex parts of a divorce case deals with determining the division of debts and assets. Next to child custody, the division of property has a reputation as one of the biggest reasons cases become lengthy. Parties may feel so strongly about their position to hold onto a certain asset that negotiations effectively stall. This is the point in time when it becomes crucial to know and understand your rights under the law. An experienced family law lawyer helps you reach creative solutions when distributing property during a divorce.
Table of Contents hide 1. Division of Property 2. Determining the Value of Assets 3. Distributing Debt 4. We Can Help
Division of Property
The division of property is one of the first issues addressed during a divorce. Tennessee law requires that the court characterize assets as either marital property or separate property. Marital property includes all property acquired by either party during the marriage—or the value accrued on any property during the marriage. This means that a portion of the property acquired before the marriage may be considered marital property. Thus, types of marital property can include:
- Real estate,
- Vehicles,
- Bank accounts,
- Businesses, or
- Furniture.
If the parties cannot agree on property classification, the court will make that determination. Conversely, separate property is all property acquired by either party before the marriage, with some exceptions.
Types of Assets You Will Keep During a Divorce
One of the biggest questions you may have when divorcing concerns the type of assets you will keep during a divorce. You may want to know if your ex will be able to reach your bank account if you will get to keep the house, or even what furniture you will be able to keep. Both spouses can work to agree on who keeps what after the divorce. However, in highly contentious divorces, both parties may not be able to reach an agreement for the division of assets. In this case, the court decides how to divide their property. Each spouse is entitled to keep their separate property, including:
- All property acquired before the marriage;
- Property acquired in exchange for property acquired before the marriage;
- Funds that were not commingled with marital property or used for the benefit of the marriage;
- Awards received for pain and suffering, a victim of crime compensation awards, future medical expenses, and future lost wages;
- Property acquired after an order of legal separation if the court made a final disposition of property; and
- Income from and appreciation of property owned by a spouse before marriage, with exceptions.
In certain circumstances, property that was once separate property might become marital property because of its use during the marriage or because it was commingled with marital funds. The court will have to determine whether such assets are still subject to equitable distribution. Tennessee law requires that the court divides marital property based on a set of factors.
Tennessee Property Division Factors
Once the court determines which property is marital and which is separate, the court decides how to divide the property. The judge uses these Tennessee’s property division factors:
- The length of the marriage;
- The general age and mental health of each spouse;
- Each spouse’s employability and earning capacity;
- The financial liabilities and needs of both spouses;
- The tangible or intangible contributions that either party made to the marriage;
- Each spouse’s contribution to the acquisition, preservation, appreciation, depreciation, or dissipation of the marital or separate property—including a party’s contribution to the marriage as a homemaker, wage earner, or parent;
- The value of each spouse’s separate property;
- Each spouse’s economic circumstances when property division is effective;
- The tax consequences to each spouse;
- The social security benefits available for each spouse;
- The attorneys’ fees paid by each spouse in connection with the divorce proceedings and whether they were paid using marital property; and
- Any other factor necessary to consider equity between the spouses.
Depending on the circumstances, the court may consider the unique circumstances affecting your family. This is not an exhaustive list of factors influencing distribution, so if you have any questions regarding what the judge may consider in your case, do not hesitate to contact our office. Our team of experienced divorce lawyers at Batson Nolan PLC is here to assist you.
Determining the Value of Assets
Some assets, like funds from bank accounts, already have a clear value and don’t need an appraisal or liquidation to determine their worth. However, there are assets that couples acquire without a readily ascertainable value. The court determines the value of these types of assets. That determination is based on testimony given by each spouse as to the value of the asset. However, an appraiser or qualified expert may offer the most persuasive evidence for property values. Regardless, if one party contests the matter, each party will need to prove why the asset in question is or is not worth a certain amount.
Distributing Debt
The process of equitable distribution is not complete until the court determines marital debt. Marital debt, like marital assets, is any debt incurred by either or both spouses during the course of the marriage. This debt can also include attorney’s fees incurred for the divorce proceeding. When the court assigns each party their share of responsibility for the payment of any marital debt, they will consider:
- The purpose of the debt,
- Which party incurred the debt,
- Which party benefited from the debt, and
- Which party is best able to repay the debt.
The court can order the parties to pay the marital debt from marital assets before determining each spouse’s responsibilities.
We Can Help
Batson Nolan PLC is a large and established firm based in Tennessee. Our lawyers handle a wide range of cases, including family law. Our family law attorneys have decades of combined legal experience in domestic relations. Our clients can count on our lawyers to provide them with the compassionate and aggressive representation they deserve. We are passionate about making the divorce process easier on our clients while helping them reach amicable solutions. If you are dealing with a divorce, contact the attorneys at Batson Nolan PLC today. We look forward to assisting you.