No engaged couple goes into a marriage planning to get divorced—but maybe they should. As a Tennessee bride-to-be I am certainly more concerned with flower arrangements and dress fittings than I am with whether the marriage will eventually sour. Unfortunately, the romance and excitement of planning a perfect wedding often overshadow the harsh reality that divorce is a common outcome of modern marriages, and it can be beneficial for you and your significant other to have an asset division plan in place before saying “I do.”

Prenuptial agreements, or “prenups,” are probably the most well-known premarital contract thanks to their widespread use by the rich and famous. Because of their association with society’s elite, prenups notoriously suffer from a negative reputation and are commonly believed to be an indication that the marriage is not expected to last. This common (albeit misguided) characterization of prenups means that it can be difficult and awkward to broach the topic with a partner.

Tennessee residents wishing to protect their individual property can avoid the delicate discussion altogether. In 2007, the Tennessee Investment Services Trust (“TIST”) Act established a new form of domestic asset protection by allowing a person to unilaterally transfer property into an Investment Services Trust (“IST”). Tennessee is one of only seventeen (17) states to offer this type of trust, thus making it a fairly unique method for local residents to shield their property from future ex-spouses.

An Overview of TISTs

A TIST is a type of irrevocable trust wherein the transferor (“grantor”) retains a level of personal interest, control, and ownership of the trust property while simultaneously shielding it from creditor claims. “Property” that can be transferred into a TIST includes real property, personal property, and one’s interests in real and personal property.

For a trust to qualify as a TIST it must expressly state that Tennessee law controls its validity, construction, and administration. As such, a TIST is most effective when both the trust and the trust property are located in Tennessee. Other core requirements for a valid TIST are that the trust must be irrevocable, contain a spendthrift provision, and have at least one “qualified trustee.” A qualified trustee for TIST purposes is simply either a Tennessee resident or someone who is authorized by Tennessee law to act as a trustee.

The qualified trustee must have at least some trust-related duties such as custody of assets, tax return preparation, or materially administering the trust. Notably, the grantor cannot also be a trustee.  They can, however, name themselves as one of the beneficiaries entitled to payouts.

TISTs and Divorce Planning

TISTs are attractive in the context of divorce planning thanks to their unilateral nature. Unlike prenups which require a signature from both future spouses, a TIST can be created without the approval or even knowledge of the other party.

To effectively shield property from a future ex-spouse the TIST must be created prior to getting married. A “Spouse” or “Former Spouse” as defined by the Act, are “persons to whom the transferor was legally married, at or before, the qualified disposition is made.” It further provides that, “The spouse or former spouse may only set aside dispositions after such person married the Transferor.” In other words, a TIST protects assets that were transferred into the trust before marriage.

Of course, the grantor cannot avoid every post-divorce financial obligation simply by creating a TIST. As evident by the language in the Act, any property or assets obtained after the marriage are fair game for an ex-spouse. Additionally, one of the more notable limitations of the Act is that the assets in the trust are not protected from claims of past-due child support or past-due alimony.

Other Uses and Benefits

Engaged couples are not the only ones who can benefit from creating a TIST. In fact, TISTs are most widely used in the context of asset protection in case of bankruptcy. Once a TIST is created and the assets are transferred, any creditors to the trust property have eighteen (18) months to bring a claim to seize it. If the creditors do not bring a claim within that time frame, they are generally barred from doing so.

As previously hinted at, TIST grantors are able to retain a lot of authority over the trust while still maintaining an interest in the transferred property. Some of this authority includes the power to direct the investments of the trust, remove and/or replace trustees, and veto any distributions. An everyday example of this level of grantor control is the grantor’s right to live in a home owned by the trust.

Those interested in creating a TIST for bankruptcy purposes should do so earlier rather than later. Importantly, TISTs cannot protect assets from past creditor claims, meaning that any debts incurred prior to creating the TIST can potentially be paid using trust property. Early transferring of the trust property also helps the grantor avoid the presumption that the TIST is being created to defraud certain creditors. Accordingly, it is most effective to form a TIST as a proactive measure rather than attempting to form one as a reaction to financial difficulty.

Conclusion

The amount of grantor control, coupled with the level of asset protection provided by a TIST, bolster Tennessee’s reputation as an incredibly trust-friendly state. After all, it is one of only seventeen (17) states affording its residents this form of domestic asset protection. The key to reaping the full benefits of this unique option is to treat TISTs as proactive tools for asset protection, regardless of the trust’s intended purpose.

If you are attempting to sign a prenuptial agreement with an apprehensive partner or are considering transferring property into a Tennessee Investment Services Trust in lieu of a prenup, you should seek advice from a Nashville attorney with expertise in protecting individual assets.  The professionals at Cole Law Group are experienced in family law and trust formation and can assist you with any questions you may have regarding asset protection in the event of divorce. Please contact us at (615) 490-6020 to request a consultation.

Author:  Madeleine Lamb, Law Clerk to the Firm

With the average age of marriage increasing, people are bringing more and more assets into a marriage. With that in mind, you should consider how to protect those assets in the event of a divorce. People have a tendency to scoff at the idea of a prenuptial agreement, also known as an antenuptial agreement or ‘prenup.’ Prenups are viewed as a sign that you do not think your marriage will work out or that you do not trust your future spouse. But I will ask you this: Would you rather decide how your assets and liabilities are divided when you are in love with your partner and have each other’s best interests at heart, or would you rather wait to have that discussion until the worst-case scenario has occurred and you now despise each other?

What goes into a prenup?

A prenup helps ensure that you and your future spouse have a clear understanding of the division of finances and property if a divorce were to occur. It can also be used to outline how income will be utilized during the marriage, i.e. who pays what bills. In addition, a prenup affords you the opportunity to discuss various scenarios, such as whether you will receive additional finances at the time of divorce if you stayed home to take care of the kids.

If applicable, a prenup might also cover how business assets will be divided, how future inheritances will be divided, how children from a prior marriage will be taken care of, who is responsible for previous debts, who is responsible for debts incurred during the marriage, if any assets or finances will be kept separate from the marital estate, and how retirement or pension plans will be divided.

Sometimes a court will not follow the prenup during the divorce… why?

You had a bad lawyer. Kidding. However, a good lawyer will advise you that there are certain requirements a court will look at when deciding whether a prenup is valid, including the following:

1. Did you disclose all your assets? If you were hiding assets from your future spouse, then they did not know what they were truly agreeing to when signing the prenup. Therefore, it is unfair to hold them to that agreement.
2. Is the agreement unconscionable? What people define as fair might not be the same, but if a prenup is heavily weighted in favor of one spouse a court might find it invalid. This can be especially true when there is financial disparity between the parties, e.g. a millionaire with five lawyers talked their poor future spouse who could not afford an attorney to sign an agreement where the millionaire gets the majority of the assets if they ever divorce.
3. Did each person have time to read and understand the agreement without pressure? If you handed your spouse a prenup right as you were about to walk down the aisle, that can be viewed as duress. If you are considering a prenup, make sure you prepare it well in advance of the wedding.
4. Did each party sign and notarize the agreement? It is hard to hold your spouse to an agreement if they refused to sign it. No signature = no consent to be bound by the terms.
5. Did you agree that neither party should pay child support? It is unlikely a court would enforce this provision, because courts want children to be taken care of. However, the court may still find the rest of the agreement valid and binding.

Tennessee’s public policy favors prenuptial agreements.[i] These agreements are generally enforceable when entered into freely, knowledgeably, in good faith, and without the exertion of duress or undue influence.[ii]

How do I get my future spouse to sign a prenup?

For reasons discussed above, bring this conversation up as early as possible. Remind your partner that the goal is not to get a divorce, but that you want to make sure you are both protected in the event of a worst-case scenario. Take the time to talk through your concerns; after all, they say strong communication is the basis of a healthy marriage. Take the time to consider where the other person is coming from. And if that doesn’t work, consider sending them this article.

If you or your future spouse is considering a prenuptial agreement, you should seek the advice of a knowledgeable Nashville divorce attorney. The professionals at Cole Law Group have the knowledge and experience to assist you with any questions you may have about protecting your interests. Please contact us at (615) 490-6020 to request a consultation.

[i] Law v. Law, No. E2021-00206-COA-R3-CV, 2022 Tenn. App. LEXIS 166 (Ct. App. Apr. 26, 2022)

[ii] Tenn. Code Ann. § 36-3-501

Kids Are Expensive $!$

It is commonly said that one of the most expensive choices that can be made in life is having children. According to CBS News, the cost of raising a child from birth to age seventeen is approximately $310,000![i] In Tennessee the payment of child support is mandatory in cases where the child is born out of wedlock, where the parents are divorced, or where there is a domestic violence order of protection. The Tennessee child support guidelines may be found in Chapter 1240-02-04 of the Rules of the Tennessee Department of Human Services Child Support Services Division. The Social Security Act located at 42 U.S.C. §§ 651-669 requires states to establish guidelines for setting and modifying child support. Tennessee Code Annotated §§ 36-5-101(e), 71-1-105(a)(15), and 71-1-132 implement these requirements and direct the Tennessee Department of Human Services to establish guidelines to enforce those provisions of federal law.

In general, a child support order is based on the alternate residential parent’s earnings, income, and other evidence of ability to pay. The Child Support Guidelines define important terms in 1240-02-04.02 including Adjusted Gross Income, Adjusted Support Obligation, Alternate Residential Parent, Days, Pro Rata, and uninsured medical expenses.

The theoretical underpinning of Child Support in Tennessee is the Income Shares Model. The Child Support Guidelines describe this as: “This model presumes that both parents contribute to the financial support of the child in pro rata proportion to the actual income available to each parent.”[ii] The Tennessee Child Support Guidelines claim that over forty other states also use the Income Shares Model and that it is generally based on economic studies of child-rearing costs.

The most important factors that determine what child support is set at are:

• Income of the parties – The lower the income of the parents, the lower child support is set at. The higher the disparity of income between the parent paying child support and the other parent, the higher the child support will be. There is a statutory maximum.
• Parenting time that each parent exercises – Child support is lowest in a joint custody/split custody situation where each parent exercises the same amount of parenting time. Child Support is highest in the event one parent exercises all the parenting time (365 days) and the other parent exercises 0 days per year.
• Number of Children – Child support is higher when more children are involved.

Below are answers to Frequently Asked Questions regarding Child Support that I have fielded in my significant experience as a family lawyer in Tennessee:

Is there a statutory maximum for Child Support in Tennessee?  

Yes these are:

• $2,100 per month for one child
• $3,200 per month for two children
• $4,100 per month for three children
• $4,600 per month for four children
• $5,000 per month for five or more children

Who has to pay for uncovered medical expenses for the children?

This is established in the Parenting Plan. Most commonly the parents pay Pro Rata in accordance with their incomes or 50/50.

What if one of the parents has other children in his/her home?

If that parent has a legal obligation to support the child, such as the child was born from him/her or the parent has legally adopted that child, then that child should be included in the credit for other in-home children section of the child support worksheet and the child support should be adjusted to account for that child/children.

What about work related-child care expenses; does this count?

Yes. Work related childcare expenses found by the tribunal to be reasonable are includable in the child support worksheet and do adjust the child support amount calculated by the worksheet. Unfortunately, the guidelines do not further define what is reasonable, so in my experience the issue seems to be entirely left to the discretion of the trial court Judge.

The other parent doesn’t have a job; can he/she still be ordered to pay child support?

Yes. Tennessee law allows the Court to determine whether income should be imputed to a parent because that parent is willfully unemployed or willfully underemployed. An example of being willfully underemployed would be a licensed doctor working a minimum wage job. In such a situation the doctor could get a job as a medical professional making significantly more money. In such a case, the Court may impute income requisite with the doctor’s past earnings or evidence showing what the market rate is.

Is there an average wage that may be imputed for men and women in Tennessee for child support purposes?

Yes. That amount is $37,589 annually for male parents and $29,300 annually for female parents.

Can I adjust my child support?

Maybe. Tennessee law requires there to be a 15% variance before a child support order may be amended. This means that if the child support is currently set at $500 per month the support would need to be adjusted by at least $75 at or above $575 per month or at or less than $425 per month.

What can I do if the other parent is not paying their child support?

You may start by contacting your local child support office to see if they can help. You may also consult with an attorney. In general, child support is punishable by contempt in Tennessee. Thus, the non-paying parent may be subject to fines, imprisonment, and paying the attorney’s fees of the other parent depending on the circumstances and what the Court decides to do to address the situation.

If you have additional questions about Child Support in Tennessee that applies to your specific situation, don’t hesitate to reach out to our team of family law attorneys at Cole Law Group at 615-490-6020. Our team has successfully litigated hundreds of family law cases and is prepared to assist you in navigating, litigating, and resolving your family law dispute today.

[i] https://www.cbsnews.com/news/raising-a-child-costs-310000

[ii] https://publications.tnsosfiles.com/rules/1240/1240-02/1240-02-04.20211001.pdf See 1240-02-04.03

Suing Your Ex for Defamation

Over the course of my nearly ten years practicing in defamation and privacy law, I have been asked on numerous occasions if it is possible to file suit against a former spouse for defamation. This question has recently popped up with a fervor due to the widespread publicity of the Johnny Depp vs. Amber Heard trial. Although every situation is unique, here are some factors that you should consider before deciding to pursue litigation against your ex.

Litigation Privilege

In the late 18^th century, The Code Duello, or the “rules of dueling,” was developed to cover the historical practice of resolving disputes through physical violence. Despite the drafters’ best attempts to “civilize” dueling, it continued to be a bloody and chaotic business, and society eventually determined that disputes involving honor or any other offense to person or property, would be better handled by the civil courts. However, for the civil courts to act as a venue for resolving controversy in a just manner, both parties would need to be free to voice their side of the story — they both would need “their day in court” without fear of future reprisals that would only extend the controversy rather than resolve it.

This is the purpose of the litigation privilege, which grants a type of immunity to the parties and their attorneys for certain acts and statements made in connection with the pursuit of litigation. For example, if the opposing party was to say on the stand during your divorce trial, “ My spouse works as a horse thief I tell you!” that statement would be privileged, and you could not sue your ex later for making a defamatory statement. I would note that, although you may not be able to sue your spouse for defaming you during the trial, if your spouse is making defamatory statements about you during the course of the divorce, particularly to third parties, you should discuss with your attorney the possibility of seeking an order from the court restraining that malicious conduct.

Q:  Why didn’t the litigation privilege stop Mr. Depp from pursuing a claim against Ms. Heard? 

           A:  The statements that Mr. Depp complained about being defamatory were made by Heard in an op-ed published in the Washington Post.  The statements in question were clearly not made in connection with the pursuit of litigation, and therefore Ms. Heard did not have immunity from suit in making those statements.

Prospective Damages

The old children’s rhyme, “sticks and stones may break my bones, but words will never hurt me,” is obviously not true. Defamatory statements can injure your reputation in the community and, if they result in loss of business opportunities, inflict monetary damage.  There are two types of relief a litigant can seek in a defamation case; a) injunctive relief and, b) monetary relief. If your request for injunctive relief is granted, the court will issue an order that requires the other party to cease making the defamatory statement(s). If your request for monetary relief is granted, the court will order the opposing party to compensate you for your damages.

Even if your former spouse has made statements that are defamatory, in Tennessee you still must be able to prove actual injury in order to obtain compensation for your damages. Statements made by a former spouse may be embarrassing or even infuriating, but often they do not result in actual damages such as a lost contract for business, termination from your job, etc. Given the debilitating financial effect a divorce has on most people, serious thought must be given, despite how angry you may be over what your ex has said, whether it really makes sense to engage in a lawsuit that, at the end of the day, could provide you with little if any recompense.

Q:  Why were damages not a barrier to Mr. Depp? 

A:  First, Mr. Depp’s suit was not filed in Tennessee, but rather in the Commonwealth of Virginia where the Heard op-ed had been published. Although I am not licensed to practice law in Virginia, it became very clear during the trial that Virginia does not require proof of actual injury in order to obtain compensation. In certain situations, one of them being where the defamatory statement would prejudice a person in his profession or trade, there is a presumed injury due to the very nature of the words themselves. Even though proof of actual injury was not required (and damages could have been left up to the jury to determine), Mr. Depp was able to show that he lost at least one film contract and several million dollars due to Ms. Heard’s defamatory statements in her op-ed. 

Anti-SLAPP Statutes

When it comes to who should pay the legal fees associated with litigation, the “American Rule” requires both sides—the plaintiff and the defendant—in a court case to pay their own legal fees, no matter who wins the case. The rule was established to ensure no one would be hesitant to file a legitimate court case due to the fear of having to pay for legal fees on both sides. In recent years, concerns over this rule acting as an incentive for “bullies” to file suits against those exercising their fundamental Constitutional rights (such as the right to free speech) have lead to the passage of state statutes barring “strategic lawsuits against public participation,” or “Anti-SLAPP” statutes.

Among other things, Anti-SLAPP statutes alter the American rule so that plaintiffs found to have filed a SLAPP suit can be held liable for the legal fees of the defendant in defending against the suit. Whether Anti-SLAPP statutes have effectively leveled the playing field, or now given those who want to defame others an upper hand in litigation by adding payment of legal fees to the plaintiff’s risk equation in filing a suit, remains a hotly debated question. In Tennessee, the Anti-SLAPP statute is titled the “Tennessee Public Participation Act” or “TPPA”.  Interestingly, to date only state courts have been affected by Anti-SLAPP with Federal courts remaining unaffected by the statutes.

Q:  Why was Anti-SLAPP not a factor in the Depp vs. Heard case?

A:  To some degree it may have been, as Virginia does have an Anti-SLAPP statute albeit it is considered a “weak” one, as it does not have, as traditional anti-SLAPP statutes generally provide, a mechanism to force a hearing to try and throw out a SLAPP lawsuit or stay discovery pending determination of whether the suit was in violation of the anti-SLAPP statute. Although Mr. Depp was at risk up until the final hearing of having to pay Ms. Heard’s legal fees in defending his suit, in the final analysis he obviously felt this risk was worth having his case go to a jury of his peers.

Summary

As discussed above, litigation privilege, prospective damages, and anti-SLAPP statutes are just a few of the factors you should consider before contemplating filing a defamation suit against your ex. As demonstrated by the case of Depp vs. Heard, defamation cases can be factually and legally complex, and it is very important that you work with an experienced legal team that understands defamation law and how to best bring your case before the court.

When a couple seeks to end their marriage in Tennessee, the termination of the marriage is generally accomplished through divorce. The divorce process usually commences with one spouse filing for divorce in a Tennessee court of competent jurisdiction. Once the divorce litigation is initiated, it will progress in either an uncontested or contested fashion. In uncontested divorce cases, the divorce is finalized upon the court approving and incorporating a Marital Dissolution Agreement (and a Permanent Parenting Plan if there are minor children born of the marriage) into a final judgment of divorce. In contested divorce cases, the parties are unable to agree on a Marital Dissolution Agreement (and Permanent Parenting Plan if applicable), and the divorce is finalized by a trial judge upon the entry of a final judgment of divorce after a trial.

There is, however, a rare alternative to divorce: annulment. Annulment is only available if grounds for annulment existed at the time a couple married. In other words, there must have been a defect in the marriage from its inception that renders it subject to annulment, and the spouse seeking the annulment has the burden to prove that the defect existed at the time of the marriage. Simply put, grounds for annulment in Tennessee do not arise after a couple marries, although they may be grounds for divorce.

In Tennessee, marriages subject to annulment are either void or voidable.

A void marriage is one that can be annulled during the lifetimes of the couple, but may also be challenged after the death of either or both of the spouses. If a marriage is void, it is invalid from the moment of its inception – sometimes, this is referred to as being void ab initio. Even if a marriage is void, it is still generally useful to bring a formal annulment proceeding in a court of competent jurisdiction so the court can make clear the marital status of the parties and adjudicate any issues related to children or property. Marriages that are prohibited by law are void.

A voidable marriage, however, is a marriage that is valid unless and until it is annulled. Importantly, a voidable marriage can only be annulled during the lifetime of the parties. If one of the spouses in a voidable marriage dies, the marriage will no longer be able to be annulled, and it will thereafter be considered a valid marriage even though it may have been voidable before the death of one of the spouses.

Under Tennessee law, there are several grounds for annulment, and these grounds are further divided between void marriages and voidable marriages.

A marriage is void from the beginning under the following circumstances:

1. when either party was already lawfully married (bigamy);
2. when the parties are within prohibited degrees of kinship, closer than first cousins (incest);
3. when, for any other reason, the marriage was prohibited by law, and its continuance is in violation of law.^[i]

A marriage is voidable from the beginning under the following circumstances:

1. when either party was insane;
2. when the complaining party was under duress;
3. when one of the parties was under the age of consent at the time of the marriage;
4. when the consent to marry was obtained by force, fraud, or was given by mistake;
5. when the defendant was impotent;^{[ii] [iii]}

Although many couples may prefer for their marriage to end in annulment rather than divorce, in Tennessee the overwhelming majority of marriages end in divorce rather than annulment. This is partially because, although annulment is possible or even required under certain circumstances, the grounds for annulment are often narrowly construed, and most couples simply do not meet the necessary legal criteria to have their marriage annulled.

If you believe that your marriage is void or voidable and that annulment may apply to your marriage, you should seek the advice of a knowledgeable Nashville divorce attorney as quickly as possible. Annulment plays an important role in domestic relations law in Tennessee, and even if annulment is found to not apply in your particular situation, it may lead you to analyze other factors that could be relevant to divorce. Contact Cole Law today at 615-490-6020 to schedule a consultation and learn more about whether annulment may be an option for you.

ABOUT THE AUTHOR: Andy Goldstein

Andy Goldstein is an Associate Attorney at Cole Law Group. He is a graduate of Belmont University College of Law and is admitted to practice in Tennessee state courts, the United States District Court for the Middle District of Tennessee, the United States District Court for the Western District of Tennessee, the United States District Court for the Eastern District of Tennessee, the United States Court of Appeals for the Sixth Circuit, and the Immigration Courts of the Executive Office for Immigration Review (EOIR). Andy focuses his practice in the areas of Family Law, Defamation & Privacy, Probate, and Complex Civil Litigation. Cole Law Group clients benefit from Andy’s passion for the law and dedication to serving them well.

Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an experienced lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

^[i] Coulter v. Hendricks, 918 S.W.2d 424, 426 (Tenn. Ct. App. 1995) (quoting 2 Gibson’s Suits in Chancery § 1147 note 10 (5th ed. 1956)) (citations omitted).

^[ii] For the ground of impotence to sustain an annulment under Tennessee law, one spouse must be physically unable to have intercourse, the impotence has to be permanent, and the impotence must have existed before the marriage.

^[iii] Coulter v. Hendricks, 918 S.W.2d 424, 426 (Tenn. Ct. App. 1995) (quoting 2 Gibson’s Suits in Chancery § 1147 note 10 (5th ed. 1956)) (citations omitted).

U.S. Military retirement benefits allow military service members to elect to purchase a Survivor Benefit Plan (“SBP”).¹ SBP was created by Congress in 1972 and has been amended several times. The SBP is a monthly annuity that, upon the service member’s death, will be paid to the service member’s designated beneficiary, such as a surviving spouse, former spouse, surviving children, or dependent children. If the designated beneficiary is a spouse or former spouse, the annuity is terminated upon death of the spouse or remarriage of the former spouse before age 55. Under the SBP, premiums are deducted from a participating service member’s pay (including retirement pay). The military service member may or may not elect to provide this annuity and may change that election. 

Can SBP Be Distributed In A Divorce Settlement? 

Yes, SBP can be distributed in divorce. The most common way this is done is by execution of a military Qualified Domestic Relations Order (“QDRO”). The QDRO should specify if the spouse is awarded a portion of the service member’s military retirement. It should correctly follow the format prescribed by the Defense Finance and Accounting Service (“DFAS”) to show how the military retirement is to be calculated.² Further if SBP is awarded to the former spouse, it should clearly state that designation and order the military service member to execute whatever document is required by DFAS to notify them of this action. Further, the QDRO should state that the military service member may not change the SBP beneficiary without written approval of the court or the former spouse.   

How Does a Former Spouse Deem Election of SBP Benefits? 

A subsection of the law found in 10 U.S.C. § 1450(f)(3) is of significant concern to a service member and spouse who are about to be divorced or a service member and former spouse who have previously been divorced and are concerned about SBP. The section is titled “Required Former Spouse Election to be Deemed to Have Been Made.”  

From the perspective of an experienced military law attorney, this subsection is poorly drafted and should be amended by Congress. Unfortunately, many legislative mishaps as bad or worse than this continue to exist. In the event of continual inaction by Congress, the law is what it is. One of my goals with this article is to help former spouses navigate the labyrinth that is deemed election of SBP by a former spouse. 

The law currently states in part: 

(3) Required former spouse election to be deemed to have been made. 

(A) Deemed election upon request by former spouse. If a person described in paragraph (2) or (3) of section 1448(b) of this title [10 USCS § 1448(b)] is required (as described in subparagraph (B)) to elect under section 1448(b) of this title [10 USCS § 1448(b)] to provide an annuity to a former spouse and such person then fails or refuses to make such an election, such person shall be deemed to have made such an election if the Secretary concerned receives the following:  

(i) Request from former spouse. A written request, in such manner as the Secretary shall prescribe, from the former spouse concerned requesting that such an election be deemed to have been made.  

(ii) Copy of court order or other official statement. 

I must admit that I had to read the statute carefully to understand its meaning. In essence, if a military service member is ordered by a lawful court order to provide SBP coverage to his/her former spouse, such an order is not sufficient. A former spouse must also provide a written request, separate from the Court Order stating that he or she has been awarded continued SBP coverage from the military service member in a divorce. As the program is currently administered, such a request in writing should be submitted to DFAS. 

What Is the Time Limit for A Divorced Spouse To Submit Request For SBP Benefits? 

After reading thus far, you may be thinking to yourself that the process doesn’t seem so bad, and this isn’t really a labyrinth of a legal issue. After all, if the former spouse forgot to file anything with DFAS after the divorce, he or she would still have plenty of time to do so. Right?  

WRONG!  Part (C) of the same section states: 

 (C) Time limit for request by former spouse. An election may not be deemed to have been made under subparagraph (A) in the case of any person unless the Secretary concerned receives a request from the former spouse of the person within one year of the date of the court order or filing involved. 

   Hence, there is a one year time limit for a former spouse to make the required written request to DFAS. The statute doesn’t give any exception if the service member was ordered by the Court to execute whatever documents are required to ensure his/her former spouse continues to have SBP annuity and deliberately fails to obey that court order. From my review of the caselaw on this issue, the United States Court of Federal Claims does not allow for equitable tolling or any other exception to this arbitrary one year requirement.  

How Do I Navigate this Legal Labyrinth?

1. Ensure you/your attorney specifically include in the divorce final order (or QDRO) that you are being awarded continued SBP Annuity, that your spouse will not designate a different beneficiary and that your spouse and you are authorized to execute required documents with the Department of Defense to effectuate this. 
2. As soon as the order is final, navigate to the DFAS website and submit a DD2656-10 (no later than one year after the order was issued).³
3. Submit copies of all relevant documents requested by DFAS. 
4. Have DFAS confirm in writing within one year of when the order was issued that you are deemed SBP former spouse election. 

If you are a former spouse who has been awarded SBP coverage in your divorce and failed to notify DFAS within one year of the order, I recommend you consult with an experienced military divorce attorney at your earliest available opportunity. Once the service member is deceased, your options may be more limited. 

Call Cole Law Group Military Law Attorney Paul Tennison in Brentwood, TN with any military divorce questions regarding SBP designation at 615-490-6020. Let Cole Law Group help you Navigate, Litigate, and Resolve your military law issues today. 

_______________________________

¹ 10 U.S.C. § 1450.

² https://www.dfas.mil/garnishment/FormerSpouseSBPDeemedElection

³ DFAS website as of February 3, 2022: https://www.dfas.mil/garnishment/FormerSpouseSBPDeemedElection

Divorce Law Basics

Lawyers label divorce cases according to the complexity of issues that must be resolved prior to the granting of a decree and/or to the degree of contention that exists between the two opposing parties. An uncontested divorce is one in which both spouses seek a divorce and agree on all divorce related matters. A contested divorce is a case where one of the spouses does not want a divorce or where the spouses are unable to agree on all the issues of the case. A complex divorce case is a contested divorce where many issues are in dispute.

Important considerations in a divorce may include: alimony¹, a parenting plan and child support (when there are minor children), the division of personal property (such as furniture, cars, firearms, etc.), payment of attorney’s fees, marital debt, division of real property, taxes, and other financial considerations. Every case is unique, and significant issues will vary based upon the complexity of the marital estate and the personal goals of each spouse.  Speaking with an attorney before filing for divorce can help someone who is considering divorce determine what issues may or may not be significant to him or to her.

Lifecycle of a Divorce Case

A divorce case begins with one of the spouses (the plaintiff) filing for divorce. Divorces are regulated by state law. Under Tennessee law, there is a statutory basis for divorce that must be proven for a court to award a divorce to the parties.² After the plaintiff files for divorce, the opposing spouse (the defendant) will be served with a copy of the complaint and a summons. Upon receiving the summons, the defendant should file an answer.

At this point the process of discovery may begin. Discovery is the process of finding relevant information pertaining to the divorce.  Relevant discovery is often financial in nature, or it may include issues regarding parenting and children, and should include facts that would support grounds to grant the divorce.

If the parties agree on all relevant issues, each will sign a Marital Dissolution Agreement (MDA) agreeing to the divorce and file it with the court along with a motion to set for final hearing. At the final hearing, the court will listen to testimony that establishes who the parties are, on what grounds they are seeking a divorce, and review the submitted documents. If the parties satisfy all legal requirements, then the court will approve the divorce and sign a final divorce decree.

The county courts in Tennessee have differing approaches regarding mediation in divorce cases. In many counties, mediation is required under the local rules or required as a matter of practice by each judge. Other counties do not require mediation yet encourage it. Judges are generally supportive of mediation because they are often quite busy with numerous cases on their dockets, and many cases are likely hung up on a small number of issues that could be settled without a trial. In many cases, even if mediation is unsuccessful, it may still reduce the length of the trial as the parties may stipulate or agree on some of the previously contested issues.

If the parties cannot agree to a settlement, then the case will go to trial. At trial, each side will attempt to prove their case by providing relevant evidence about all issues in dispute. Trial can be a time consuming and expensive process in divorce cases.

Mediation

Mediation involves a neutral third party helping the two parties come to an agreement and resolve the case.³ Mediators are often, yet not always, attorneys. In my experience, the best divorce mediators are attorneys that have practiced family law in the county where the case is assigned and are familiar with the judge assigned to the case. This is important because that mediator can then add value to the discussion by giving each side a realistic assessment of how the court will likely see any disputed issues if the case were to go to trial. The mediator’s job is to get both sides to compromise enough to reach a deal. If a mediation is successful, both sides may leave the mediation feeling a bit disappointed that they did not get everything they wanted. This is to be expected because, if the spouses had agreed to compromise, they could have filed an uncontested divorce or negotiated an agreement without the time and expense of a mediation.

Mediation is a straightforward process. Each spouse prepares a statement for the mediator to review before mediation that gives a brief history of relevant facts, discusses what is in dispute, and makes arguments for why those disputes should be resolved in his or her favor. Before the mediation occurs, the mediator will review all information that has been submitted. During the mediation, each party is assigned to separate rooms. The mediator will then introduce herself or himself to the parties separately and establish expectations. The mediator will determine what the opening offer of the mediation is and then go room to room and work with the parties to reach a compromise. The mediator will continue working with each of the parties until the case is resolved, one of the parties leaves the mediation, or the mediator declares an impasse.

An effective mediator is good at exerting a bit of pressure to keep the negotiations flowing and avoid a stalemate. Many common negotiation techniques may be employed to reach a creative solution. This includes asking the parties to list the issues that are most to least important to them, logrolling, informing the parties what law applies to each issue, making persuasive arguments citing to evidence that a judge would likely consider important, and others.

When might be the best time for Mediation?

Each case is different. In some cases when there are few contested issues, an earlier mediation is best. This is true because, if little is in dispute, then a lengthy discovery process is an unnecessary litigation expense that should be avoided. On the other hand, perhaps in a case where one of the spouses is unable to determine important financial information (such as real property owned by the opposing spouse, the opposing spouse’s ownership interest in companies or stock, etc.), then discovery is important for that spouse to have an accounting of what assets exist in order to understand what outcome would be fair and equitable under the circumstances. Also, if the parties cannot agree on important considerations regarding the children, mediation may not be practical until closer to trial.

Conclusion

Mediation can be an effective way to resolve many divorce cases without the additional time and expense a trial would incur. Our skilled and experienced divorce attorneys at Cole Law Group will have a strategic plan and advise you if or when you should go to mediation. We have successfully represented many clients in mediation, thereby avoiding lengthy and expensive trials. If you are about to enter divorce proceedings, give us a call at (615) 490-6020. We are here to help you resolve or litigate your divorce.

About the Author

Paul E. Tennison is an associate attorney with Cole Law Group, where he aggressively advocates on behalf of clients in a broad range of civil legal disputes including Divorce, Military Divorce, Child Custody, and Military Law matters. Paul is a West Point and Vanderbilt Law graduate who has over nine years of management, human resources, and leadership experience in the United States Army. He continues to serve our country as a captain in the Tennessee Army National Guard.

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¹ Tennessee law includes several types of alimony: “The court may award rehabilitative alimony, alimony in futuro, also known as periodic alimony, transitional alimony, or alimony in solido, also known as lump sum alimony or a combination of these…” Tenn. Code Ann. § 36-5-121.

² See Tenn. Code Ann. § 36-4-101.

³ See https://www.tncourts.gov/programs/mediation/resources-public This website includes Mediation resources for the public including answers to FAQs, a Parents guide to Mediation, and other helpful resources.

In many marriages, one spouse will be the primary breadwinner. If a couple is happily married, a significant disparity in income is often not a cause for concern, but if the couple decides to divorce, the lesser earning spouse is at a financial disadvantage and may wonder if he or she can afford the cost of an attorney. The law aims to protect the rights of all individuals, even individuals that cannot afford an attorney. Thus, in many divorce cases, the court will order one spouse to pay the other spouse’s legal fees. If you intend to end your marriage, it is in your best interest to consult a skillful Tennessee divorce attorney to discuss whether your spouse may be responsible for your legal fees.

Responsibility for Legal Fees

Like many states, Tennessee follows the “American Rule,” which traditionally requires a party to a lawsuit to pay his or her own attorney’s fees unless a statutory or contractual provision states otherwise. State v. Brown & Williamson Tobacco Corp., 18 S.W.3d 186, 194 (Tenn. 2000). Nevertheless, Tennessee statutory law vests trial courts with the discretion to award one party his or her attorney’s fees in the context of a divorce proceeding, and some trial judges may deem such an award to be a form of alimony. See Tenn. Code Ann. § 36-5-103(c).

Under Tennessee law, there are four types of alimony: rehabilitative alimony; alimony solido, which is known as lump sum alimony; alimony in futuro, which is also referred to as periodic alimony; and, transitional alimony. Generally, an award of attorney’s fees constitutes alimony solido.

In addition, a contractual basis for an award of attorney’s fees often exists for divorcing or divorced parties when the parties have entered into a prenuptial agreement, postnuptial agreement, marital dissolution agreement, or other contract. If you think there may be a contractual basis to support an award of attorney’s fees in your divorce matter, you should consult with a knowledgeable family law attorney and get an evaluation of your potential options in the event of litigation.

Discretionary Factors the Court Will Consider

As with many decisions in divorce cases, the decision of whether the court will order your spouse to pay your legal fees ultimately rests within the discretion of the trial judge. In assessing whether to award attorney’s fees, the court will typically weigh several factors, including the earning capacity, needs, debt obligations, income (which includes money from retirement funds and trusts), and financial resources of each spouse. Financial resources include not only jointly owned property but also the separate assets of each spouse. Additionally, the court will evaluate the duration of the marriage and the age and mental and physical health of each spouse. The court will look at each spouse’s education and whether either spouse is unable to work due to being the primary caretaker of children born of the marriage. Finally, the court will evaluate whether the party from whom the attorney’s fees are sought has the ability to pay such fees.

If the court finds that the spouse seeking attorney fees has sufficient income or property to pay his or her own fees or expenses, the spouse will not be entitled to attorney’s fees. Instead, attorney’s fees are only appropriate when the spouse seeking such fees lacks adequate funds to pay for them. The court may also award a spouse attorney’s fees if he or she would be required to deplete his or her resources to pay an attorney. As such, if you are able to demonstrate that you are financially unable to pay an attorney, the court may order your spouse to pay your legal fees.

Speak with an Experienced Divorce Attorney

Divorces are not only emotionally draining, but they are often financially draining as well. If you wish to seek a divorce and want your spouse to pay your legal fees, it is prudent to speak with an attorney to discuss your rights. At Cole Law Group, our experienced Tennessee divorce attorneys can assist you in protecting your interests throughout the divorce process. You can contact us at (615) 490-6020 or via the form online to set up a meeting to discuss your case.

The marriage is over but the divorce lingers on.  Perhaps you are one who has now reached a high level of frustration because you still can’t get on with your life, because you and your ex-spouse are deadlocked on every issue, and because your divorce is dragging along at a snail’s pace.  Actually, your consternation may be justified.  The prolongation of divorce proceedings is both financially ruinous and emotionally devastating.  And you shouldn’t have to endure it forever. 

In Tennessee the procedure for dissolution of marriage is pretty straightforward.  A no-fault divorce based on irreconcilable differences with no minor children involved has a minimum statutory waiting period of 60 days (90 days if minor children are involved.)  This uncontested divorce process should be completed within one year and consists of four primary steps:  1) File a petition for divorce with the  court, 2) Prepare a Marital Dissolution Agreement, 3) Agree on a Permanent Parenting Plan if minor children are involved, and 4) Schedule a final hearing in court. The procedure for a contested divorce, on the other hand, can take up to two years and beyond to finalize simply because of the filing of motions and counter motions, discovery (interrogatives, fact finding, and depositions), court ordered mediation, or multiple hearings and a backlog of court cases.

And even though a contested divorce by its very acrimonious nature takes longer to resolve, it is wise to be aware of certain mindsets and external influences that can turn a routine process into a never-ending nightmare.  Below are some bumps in the road that can derail a successful, timely divorce resolution.

REFUSAL TO COMPROMISE

An “I’m going to win at all cost” attitude doesn’t serve anyone well.  Realistically, it is probable that neither party will get everything he or she wants in the divorce.  Pick your battles, consider rational alternatives, and choose areas in which you might be willing to negotiate.  Avoid using the courtroom as an arena where you can “finger point”, out-strategize and demoralize your spouse.  Judges don’t take kindly to spousal attack, accusations, and constant bickering.

IT’S ALL ABOUT THE MONEY

Very few people find their “pot of gold” at the end of a divorce. If you reside in one of the nine community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), both spouses are considered equal owners of all marital property, and a 50-50 split is the general rule. In a common property state such as Tennessee, the court will determine a fair or equitable division of marital property according to certain variables.  Most judges will begin by awarding 50% of the marriage assets to each party and adjust that distribution based upon evidence presented.  If you believe that your spouse is hiding assets, then you and your attorney must act accordingly.  Otherwise, an extended fight over money or ownership interest in a business is expensive and you may not be rewarded accordingly.  Years of fighting the good fight over money can eventually chew up a large percentage of available wealth.

ONE SPOUSE DRAGS FEET

An unwillingness to “let go” can delay divorce proceedings and make the process even more painful.  A less-motivated party may procrastinate in responding to motions, postpone court hearings, and reject even generous settlement offers.  At times it is prudent to step back and allow the unwilling party time to emotionally adjust.  However, eventually, the process just has to be pushed along.  Reality is that a spouse who is determined to divorce will ultimately prevail.

CUSTODY BATTLE

A custody battle is  the single most emotional reason for perpetuating divorce issues and will create havoc with the divorce process.  Hostilities escalate when one parent  or the other attempts to use the children as pawns in order to gain leverage in financial matters, child visitation, or control over mutual parenting practices. If allegations of mental illness, substance abuse or emotional/physical abuse are made in a high-conflict divorce, a forensic psychologist may be appointed by the court to do an evaluation of both parents and the children.  A judge may also utilize the services of a guardian ad litem  (“GAL”) to help determine which parent should have primary residential responsibility.  The GAL’s job is to act as an advocate for the children.  He or she will interview people who come in contact with the children, prepare a report for the judge, and perhaps testify at trial.  An independent psychologist may also be employed to help the children through this traumatic chapter in their lives.  The undertaking of experts who attempt to resolve custody battles is lengthy and expensive and can delay the final divorce decree for a significant period of time.

THIRD-PARTY INTERVENTION

One of the most insidious obstructions to an expedient divorce is the involvement of third parties.  Third parties take on many faces–they may be relatives, lovers, close friends, persons with an axe to grind, someone who is seeking a “cause d’jour”, or an individual who has a vested interest in the outcome of financial disposition, child visitation, or primary residential issues.  (Grandparents are often dragged into the fray with the best of intentions because of a genuine concern for their grandchildren’s welfare.)  Third parties may affect the outcome of a divorce by offering advice, testifying, or providing significant financial support. Many times their involvement blindsides the opposing spouse.  If a divorce drags on interminably, you should always bear in mind that the causative factor could be third party intervention.

MODIFICATIONS AND APPEALS

And just when you thought it was over—here it comes again.  After a trial has taken place and a court order has been signed that covers all the divorce issues, either party may file an a post-divorce modification or an appeal.  

Post-divorce modifications are usually filed in order to change the terms of alimony, child custody, child support, visitation, or parental relocations.  Modification may occur when there is a substantial change in circumstances  from the time that the original order was entered.  A judge (or parenting plan) will often require that the two parties involved attend mediation prior to a modification hearing.   Post-divorce modifications may be concluded expeditiously or drag on for a lengthy period of time.

A Notice of Appeal must be filed within 30 days of the trial judge’s order.  The purpose of such an appeal is to determine whether the judge made a legal error that affected the outcome of the trial.  If the appellate court reverses the original judge’s order, then the matter will likely be sent back to the trial  court for further proceedings.  The appellate process can take a year or longer to complete.

CONCLUSION

So what can you do if you find yourself mired in chaos and divorce limbo?  First, reassess your goals to determine if they are viable.  Second, be flexible and choose your battles carefully.  Third, consider the factors above that may be true impediments to divorce resolution.  In addition, and most importantly, align yourself with a skillful family law attorney who has your best interests at heart, who can offer sound counsel, and who will be your forceful advocate as you navigate through the roadblocks of divorce.  Our Cole Law Group family law attorneys in Nashville have the knowledge and experience to help resolve the most highly contested divorces. Contact us today at (615) 490-6020 to schedule a consultation.

Alimony – A Primary Issue in Divorce

For better or worse, nearly half of marriages in the United States end in divorce. Although the exact statistics on divorce fluctuate slightly from year to year and state to state, the residents of Tennessee are no strangers to breaking the bonds of matrimony. Throughout Tennessee, it is widely accepted and understood that issues pertaining to child custody and property division must be decided as part of any divorce. However, another extremely important issue in divorce – the issue of alimony (sometimes referred to as “spousal maintenance” or “spousal support”) – is often less certain or overlooked by parties to a divorce until it is too late, particularly if either or both of the parties have never gone through divorce before or if the divorce is unexpected.

In a broad legal sense, there are five (5) primary issues pertaining to any divorce: (1) grounds for divorce; (2) child custody; (3) child support; (4) equitable distribution of marital property; and (5) alimony. While none of these issues can be considered in isolation, the issue of alimony often predominates throughout divorce. The issue of alimony is the last major issue decided by the trial judge in a Tennessee divorce. Even if the facts of a case strongly indicate that the Court is likely to award one party alimony at the conclusion of the proceeding, vigorous litigation can ensue regarding what form the alimony should take, as well as its amount, duration, and other conditions.

Types of Tennessee Alimony

Under Tennessee law, there are four (4) main types of alimony: (1) alimony in futuro; (2) alimony in solido; (3) rehabilitative alimony; and (4) transitional alimony. See Tenn. Code Ann. § 36-5-121(d)(1).

The first type, alimony in futuro, “[i]s intended to provide support on a long-term basis until the death or remarriage of the recipient.” Tenn. Code Ann. § 36-5-121(f)(1). Alimony in futuro “can be awarded where ‘the court finds that there is relative economic disadvantage and that rehabilitation is not feasible.’” Gonsewski v. Gonsewski, 350 S.W.3d 99, 107 (Tenn. 2011) (citing Tenn. Code Ann. § 36-5-121(f)(1)). This form of alimony often turns out to be all but permanent, not usually terminating until the death of either of the parties, the remarriage of the party receiving the alimony, or the subsequent cohabitation of the party receiving the alimony with a third person after the divorce. From the perspective of the party paying a spousal support obligation, alimony in futuro is often the worst outcome; from the perspective of the party receiving it, it is often the best outcome.

The second type, alimony in solido (also a “form of long-term support”), is “set on the date of the divorce decree and is either paid in a lump sum payment of cash or property, or paid in installments for a definite term.” Id. at 108 (citing Tenn. Code Ann. § 36-5-121(h)(1)). This form of alimony is often referred to as “lump sum” alimony because it is set at a definite amount (determined at the time the parties are divorced) and is often paid by one party to the other in a single lump-sum payment. Tennessee courts frequently use alimony in solido as a mechanism to make one party pay for the other party’s attorney’s fees.

The third type, rehabilitative alimony, differs from the first two types. Rehabilitative alimony is not a form of long-term support. Rather, it “serves the purpose of assisting the disadvantaged spouse in obtaining additional education, job skills, or training, as a way of becoming more self-sufficient following the divorce.” Id. (citations omitted). The General Assembly has expressed a preference for rehabilitative alimony over the other types “whenever possible.” Tenn. Code Ann. § 36-5-121(d)(2).

The fourth type, transitional alimony, may be awarded by a court when it “finds that rehabilitation is not required but that the economically disadvantaged spouse needs financial assistance in adjusting to the economic consequences of the divorce.” Gonsewski, 350 S.W.3d at 109 (citing Tenn. Code Ann. § 36-5-121(d)(4), (g)(1)). Transitional alimony is a form of short-term support. Generally, if a court does not find rehabilitative alimony (the preferred form) is necessary, but that an otherwise self-sufficient spouse still “needs financial assistance in adjusting to the economic consequences of establishing and maintaining a household without the benefit of the other spouse’s income,” it will award transitional alimony. See id.

Alimony is Discretionary 

Moreover, and perhaps most importantly, it should be noted that Tennessee courts are not required to award a party any alimony at all. Indeed, trial judges have the discretion to award alimony and, if so, to determine what form(s) any such award will take based on numerous statutory and equitable factors. Appealing an alimony decision may be possible but is largely dependent on the specific circumstances of each case and the manner in which any such alimony decision was made by the trial judge. While this article has provided a brief overview of the main types of alimony grounded in Tennessee law, it barely scratches the surface of the complexity entailed in litigating for or against alimony awards in a Tennessee divorce. Finally, this article also does not address the important topic of temporary spousal support, another critical factor that can predominate in divorce and set the stage for how long and costly a divorce proceeding can be before a resolution is likely to be reached.

Alimony Litigation Strategy Matters

In any event, when one spouse considers alimony a gift worth litigating to receive, the other spouse is likely to consider it a curse worth litigating to prevent. Even if a divorce case contains factual circumstances strongly indicating alimony will be awarded in some form regardless of how well one party performs over the other at trial, the strategy and effectiveness of the parties in litigation can significantly sway whether the alimony award will be substantial and protracted or trivial and brief. Depending on your age, ability to earn income, profession, and many other factors, fighting for or against an award of alimony could prove critical to ensuring your economic success after the conclusion of your divorce. When divorce puts so much at stake, finding a compassionate and knowledgeable attorney to help guide you through this daunting process is paramount to protecting your rights and securing your livelihood for the future.

Property owned during a marriage in Tennessee is classified as either separate property or marital property. This distinction becomes quite important for many spouses when considering divorce. The concept is worth understanding because only marital property is subject to equitable distribution during a divorce. Separate property includes property which was owned by a spouse before marriage; property which was acquired in exchange for property which was already owned prior to the marriage; income and appreciation of separate property; property acquired by a spouse through gift, bequest, devise or descent; pain and suffering awards; victim of crime compensation; future medical expenses; future lost wages; and property acquired by a spouse after an order of legal separation in which a court has completed a final disposition of property.

Where the separate property analysis gets tricky is a carve out section, T.C.A. § 36-4-121(b)(1)(B)(i). This section states: ” ‘Marital property’ includes income from, and any increase in the value during the marriage of, property determined to be separate property in accordance with subdivision (b)(2) if each party substantially contributed to its preservation and appreciation” This requires an understanding of substantial contribution and preservation and appreciation. Thankfully, the statute includes some more helpful information by defining a substantial contribution. A substantial contribution may include, but not be limited to, the direct or indirect contribution of a spouse as homemaker, wage earner, parent or family financial manager, together with such other factors as the court having jurisdiction thereof may determine.” Preservation and appreciation are not further defined in the statute.

Let’s consider a few hypotheticals. In Marriage A, Wife was gifted a significant amount of publicly traded stocks from a family member prior to marriage. Husband paid taxes on Wife’s stocks when sold. Are the stocks marital property? In Marriage B, Husband bought a house before the marriage that was never used as the marital home. Wife’s name was never put on the deed. However, when the house needed repairs, Wife paid for the HVAC to be replaced. Is the house Husband’s separate property? In Marriage C, Wife purchased a house during the marriage and the house was foreclosed on. Can Husband be awarded dissipation?

There are two additional doctrines under Tennessee common law by which separate property may become marital property. These are transmutation and commingling. The Tennessee Supreme Court has explained these doctrines as: “Separate property becomes marital property [by commingling] if inextricably mingled with marital property or with the separate property of the other spouse. If the separate property continues to be segregated or can be traced into its product, commingling does not occur…. [Transmutation] occurs when separate property is treated in such a way as to give evidence of an intention that it became marital property.”

Examining some recent Tennessee cases may help understand the § 36-4-121(b)(1)(B)(i) separate property exception as well as the doctrines of transmutation and commingling. For example, In Jones v. Jones, the court determined that stock purchased prior to the marriage and the stock options held by the husband were separate property, but after the marriage occurred, income from the stock became marital property pursuant to the statute and the finding that the wife substantially contributed to the preservation and appreciation of the account. In Telfer v. Telfer, the Court determined a large division of the marital estate in favor of a wife was extreme and inequitable, resulting in an injustice to the husband, because, although the wife’s parent gifted business entities to the wife, the husband contributed to the management of the entities after the gift and marital funds were used to pay taxes for the entities. In Wade v. Wade, appreciation of stocks owned by th husband prior to marriage was properly classified as marital property where wife substantially contributed to the stocks’ preservation and appreciation not only by her indirect contributions as homemaker, wage earner, parent, and family financial manager, but by her direct contributions as monitor of the stocks during the period of her employment with a brokerage firm.

Thus, after examining the caselaw and depending upon what facts the court found important, this is how the hypotheticals above would likely play out: A: The stocks are marital property because by Husband paying taxes on the stock, the parties used marital funds to ensure it was preserved and could appreciate. B: This is a close case, it depends on the value of the house, the cost of the HVAC repairs, and whether the court feels that wife’s actions substantially contributed to the preservation and appreciation of the house. More likely than not, a court should find the House has become marital property due to Wife’s actions, thus the Wife should be entitled to split the value of the house that increased during the marriage, not the entire value of the house. C: Husband may be able to recover dissipation from Wife for half the value of the home at the time of the foreclosure. Dissipation of marital assets is defined in T.C.A. § 36-4-121(c)(5)(B).

In conclusion, most property at issue in a divorce is likely to be classified as marital property subject to equitable distribution. Even if property would otherwise be considered separate property, there are several instances that the property may be considered marital. Divorce is a big life decision. If you are considering divorce, you should consult with a local attorney and explore the possible ramifications, including taxes, custody, living arrangements, alimony, and others that are relevant to you.   

References

¹ See T.C.A. § 36-4-121. Distribution of marital property.

² T.C.A. § 36-4-121(b)(2).

³ T.C.A. § 36-4-121(b)(1)(D).

⁴ Snodgrass v. Snodgrass, 295 S.W.3d 240, 256 (Tenn. 2009).

⁵  Jones v. Jones, 2016 Tenn. App. LEXIS 589 (Tenn. Ct. App. Aug. 12, 2016).

⁶ Telfer v. Telfer, 558 S.W.3d 643, 657 (Tenn. Ct. App. 2018).

⁷  Wade v. Wade, 897 S.W.2d 702 (Tenn. Ct. App. 1994).

“Every battle is won or lost before it is ever fought.”

Although we say, “until death do us part” and fully expect our lives with that special someone to last forever, unfortunately, sometimes those expectations fall short of the reality.  Whether it’s because one spouse did something unforgivable or you simply grew apart, divorce may become the new reality.  As an attorney, I often find that by the time a client has made it into my office, much of the damage has already been done. This article was inspired by such clients in an effort to prevent the same type of damage to others who find themselves in similar circumstances.  Make no mistake, although we would like to think the person we committed our lives to would never purposefully try to deceive or deprive us, a divorce can be, and often is, a battle to be won or lost.  Recognizing this fact and understanding the “Art of War” is the first proactive thing a spouse can do for themselves.  It was Sun Tzu, a Chinese military general and strategist, who literally wrote the book and emphasized the importance of preparation for any victory.  His words transcend the battlefield and could not be truer than they are here. Proper preparation can mean the difference between victory or defeat, and much of a divorce battle is fought before the first court filing.

Documentation

If you feel like your spouse is contemplating the Big D, it is important that you do what is necessary to protect yourself.  This is especially true for a spouse who has typically relied on the other to manage the family’s financial affairs.  Too many times a spouse will meet with an attorney for the first time and won’t even know how much money is in the joint checking account, has never looked at a bank statement, and has no idea where the family income is being invested or what the actual living expenses are.  This information is vital to a divorce action.  So, if your “Spidey senses” are going off, and you feel like your spouse may be considering divorce, now is the time to start collecting this information.  While you have access to computers, login information or files, start making copies of bank statements, utility bills, investment accounts, tax returns and your spouses pay stubs.  Having this information beforehand will also help keep your legal fees down because it will give your attorney a starting point in negotiations as well as provide information necessary for the Court.  I have included a Divorce Documentation Checklist to help you navigate this process.

Know Your Rights

Another vital aspect of divorce preparation is knowing what your rights are.  If you and your spouse own a home, don’t assume your spouse can just force you out.  You have just as much right to stay there as he or she does.  It is much easier to remain in the marital home than to try and regain access later.  However, I must also emphasize that if you feel you or your children are unsafe or in any sort of danger from your spouse, seek an attorney immediately to get a protective order in place.  You can request the Court’s assistance in this regard, but never stay in a place where you feel your safety is at risk.

If your spouse is the primary income earner, you are entitled to continued financial support throughout the divorce proceedings.  Once either party has filed the initial complaint for divorce, the Court will put certain restrictions into place.  These restrictions are called Statutory Injunctions and are intended to prevent a spouse from, among other things, closing marital accounts, hiding or moving assets, destroying evidence, cancelling insurance or dissipating marital funds. A list of these restrictions can be found in Tennessee Code Annotated § 36-4-106.  If one spouse violates these injunctions after they have been put into place, the other spouse can seek relief from the Court.

Get Your Mind Straight

So many times, people enter a divorce governed by their emotions.  Keeping those emotions in check is probably the most difficult task for a spouse looking at divorce.  You are angry, hurt, scared or all of the above.  Although these feelings are perfectly normal and often times understandable, it will be much better for you in the long run to try and separate your emotions from the proceedings.  Revenge is not a form of relief the Court will provide.  Although Tennessee does allow for grounds-based divorce actions, the Court will not consider these grounds in division of the marital estate.  

Prioritize your life.

A divorce can be overwhelming, and it is easy to be consumed by it.  So, before you get in too deep, think about what is really important and set realistic expectations. Know what you have and what you need to make it through the divorce and ensure your financial security.  Having a good grasp on this information will also help your attorney better advocate for you.  Be leery of a settlement offer that seems too good to be true.  Often times it is.  A prime example of this and a common mistake of divorce clients is giving up your interest in a retirement pension in exchange for retaining the marital home.  Although on its face, this may seem like an equitable compromise, one asset comes with liability and financial obligations while the other generates income with no expense.  This is why it is so important to have an experienced divorce attorney review any and all offers before acceptance. 

Seek Legal Counsel

While this article in no way covers every pitfall or every facet of divorce preparation, it may provide you with a good starting point.  Although I am a licensed attorney in the state of Tennessee, this article does not constitute legal advice or establish an attorney-client relationship with the reader.  It is intended for informational purposes only.  However, I do recommend that if you are facing the possibility of divorce, seek legal counsel as soon as possible and start gathering information with which to arm yourself.  Preparation will be your biggest weapon and might possibly help you avoid a long drawn out battle in favor of a civil and equitable outcome. 

“Until one has loved an animal a part of one’s soul remains unawakened.” – Anatole France

Wedding china, dining room table, artwork collection… pets? As most of the United States today, Tennessee included, continues to deem pets as personal property, many divorcing pet owners will face the question, “Where will Fido go?”  This question is particularly important for couples who acquired pets during the marriage and, as many pet owners can attest, consider them to be fundamental members of the family.  In this situation, divorcing parties are typically expected to separately address and agree to an equitable division of all “other items” of tangible personal property – “umbrella” language commonly found in divorce settlement agreements – under which pets fall.

Despite traditionally itemizing Fido between the Instant Pot and the outdoor patio set, the issue of pet ownership in divorce proceedings is, in fact, becoming an increasingly popular topic in family law throughout the country.  Similar to child custody disputes, divorcing parties may want to first discuss how to best maintain the status quo for the pet(s) post-divorce.  If both parties have equally contributed to the well-being, care, and financial responsibility of the pet(s), will be in the position to continue same after the divorce finalization, and neither wishes to forfeit ownership and/or visitation rights, they may find an informal pet agreement to be a feasible solution.

When reaching an informal pet agreement, it is imperative that divorcing parties thoroughly discuss and consider all factors at play, particularly if multiple pets were acquired during the marriage.  In this scenario, divorcing pet owners may weigh either a “full custody” or “joint custody” agreement.  A “full custody” agreement would award each spouse sole ownership of the mutually agreed upon pet(s) and would relinquish the other spouse of all claims to said pet(s).  The parties may find this arrangement to be an equitable division and, ultimately, in the best interests of the pets and parties.  Alternatively, other owners may find a “joint custody” arrangement more desirable by way of equally splitting visitation rights, decision-making, and financial obligations for all pets in question.

Furthermore, divorcing parties may choose to adopt an informal pet agreement that marries both full and joint custody arrangements.  For example, the parties may choose to each maintain “full custody” of his or her designated pet(s), but serve the role of caretaker for the opposing party’s pet(s) in the event of travel and/or extenuating circumstances.  This particular arrangement may best apply to parties in uncontested divorces who are able to maintain effective communication, mutual respect, and sole focus on the well-being of the pets.  In one specific example in Tennessee, the divorced parties agreed to retain “full custody” of one dog each, accepting all responsibilities that this would entail, but to exercise visitation by way of caretaking on an “as needed” basis.  This agreement allows the parties to not only avoid potentially excessive boarding expenses, but also to preserve the bond shared with the “non-custodial” dog. 

Ultimately, decisions regarding informal pet agreements should be made on a case-by-case basis, acknowledging that the laws regarding pet custody may vary by state.