When couples go through the divorce process, issues that must be resolved to finalize the divorce often vary depending upon the specific circumstances of the divorcing couple. However, one of the issues that must always be resolved in every Tennessee divorce is that of property division. Property division and equitable distribution will be determined regardless of whether a divorcing couple has children and is often a point of great contention.
How Does TN Determine a Fair Division of Property?The manner of property division on divorce depends upon the law of the state in which the divorce proceeding occurs. There are two primary systems for dividing marital property utilized on a state-by-state basis throughout the United States: (1) community property; or (2) equitable distribution. In states utilizing the community property system, the property of both spouses is categorized as either “separate property” or “community property,” and community property is divided either equally or equitably. As of this writing, there are only nine states that utilize the community property system: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In states utilizing the equitable distribution system, the property of both spouses is categorized as either “separate property” or “marital property,” and marital property is divided equitably.
Marital Property vs. Separate PropertyThe vast majority of states, including Tennessee, utilize the equitable distribution system of marital property. In Tennessee, a court will first categorize the property of both spouses as either marital property or separate property. After the property of the spouses is categorized, courts in Tennessee will proceed with equitably distributing the property categorized as marital property prior to formally divorcing the spouses.
Marital property in Tennessee is generally defined as all real and personal property, both tangible and intangible, that was acquired during the course of the marriage and owned by either individual spouse or by both spouses up to the date of the final divorce hearing. The following specifies additional assets that may be considered as marital property:
Under Tennessee law, the equitable distribution of marital property does not necessarily mean that the division of marital property will be equal. When making the equitable division of marital property, Tennessee courts consider all relevant factors, including:
Therefore, the trial judge generally exercises a significant degree of discretion, based on the application of the factors listed above, when making an equitable distribution of marital property in a Tennessee divorce. While an “equitable” distribution may often result in an equal or roughly equal distribution of marital property between the divorcing spouses, the trial judge generally has the discretion to order an uneven division of the marital property between the parties so long as that uneven division is supported by the evidence before the court and grounded in the application of the applicable factors governing the division of marital property under Tennessee law. As a result, it is not uncommon for divorcing spouses to receive unequal portions of the marital estate after trial in a Tennessee divorce.
What if My Spouse and I Agree on How to Divide Our Property?Importantly, it should be noted that couples can generally divide their marital property in any manner they choose during divorce if they reach an agreement. When divorcing spouses reach an agreement on the division of their marital property, they must both execute a Marital Dissolution Agreement (MDA) formally setting forth their agreement on the division of marital property. The MDA is a legally binding contract between both parties and must be approved by the court prior to the finalization of the divorce.
What if My Spouse and I Previously Entered Into an Enforceable Prenuptial or Postnuptial Agreement?Similarly, if a divorcing couple previously entered into an enforceable prenuptial or postnuptial agreement, then the process of equitable distribution may be significantly influenced and controlled by the terms of the prenuptial or postnuptial agreement. Under Tennessee law, antenuptial, prenuptial, or postnuptial agreements are generally binding upon any Tennessee court having jurisdiction over the spouses, provided that the agreement was entered into by the spouses “freely, knowledgeably and in good faith and without exertion of duress or undue influence upon either spouse.”
Although there are certain circumstances that can render a prenuptial or postnuptial agreement ineffective in a Tennessee divorce proceeding, a more detailed discussion on the enforceability of prenuptial and postnuptial agreements under Tennessee law is beyond the scope of this article.
How Can I Feel Confident That I Will Receive My Share of Marital Property?The division of property in divorce can have extremely significant consequences that may impact your life for years or even decades after the divorce has concluded. If you are experiencing divorce or think you may need to plan for divorce in the future, you should seek the legal advice of a knowledgeable and experienced divorce attorney immediately.
Contact a Nashville attorney with Cole Law today at 615-490-6020 to schedule a consultation and learn about how Tennessee’s laws governing the distribution of property on divorce may impact you.