In making its division of property, the trial court must first classify the property as either separate or marital property, pursuant to Tenn. Code Ann. § 36-4-121(b). Kinard v. Kinard, 986 S.W.2d 220, 230 (Tenn. Ct. App. 1998). This distinction is important because Tenn. Code Ann. § 36-4-121(a) provides for the distribution of marital property only.
The character of whether the asset or debt is separate or marital is crucial in the proper equitable division of the same. Separate property or debt is characterized as such if it was acquired or accrued prior to the date of marriage.
If you purchased the home or car in your name prior to date of marriage then it is separate property not subject to the jurisdiction of the court. If the home or car was purchased during the marriage then it is a marital asset subject to equitable division of the court. It is not necessary for your spouse to have her name on the title of the asset for him or her to have a marital interest in it. These rules apply to debts and/or liabilities as well. However, there are important considerations the court must consider.
For example, if the asset was inherited by your spouse during the marriage then it is considered separate property. If land, jewelry, cart or such other tangible property is inherited then it belongs to the spouse and the court cannot award any value from it to the other spouse. However, if the asset is sold and the funds are placed into a joint checking account held with spouse, then there is a rebuttable presumption that it has become marital property subjection to division before the court. This is called transmutation where the monies have become commingled with other marital funds in the joint account. If the monies were deposited into a single account then the character of separate property is likely protected. In a prior case I was able to convince the court that the monies deposited into the single name bank account should be marital property because the other spouse commingled his earned income by direct deposit into that account. Furthermore monies from sale of other marital property was deposited and family expenses were paid out of that account.
Tenn. Code Ann. § 36-4-121(c) instructs the court to consider all relevant factors in making an equitable division of marital property, including the following:
(1) The duration of the marriage;
(2) The age, physical and mental health, vocational skills, employability, earning capacity,estate, financial liabilities and financial needs of each of the parties;
(3) The tangible or intangible contribution by one (1) party to the education, training or increased earning power of the other party;
(4) The relative ability of each party for future acquisitions of capital assets and income;
(5) The contribution of each party to the acquisition, preservation, appreciation, depreciation or dissipation of the marital or separate property, including the contribution of a party to the marriage as homemaker, wage earner or parent, with the contribution of a party as
homemaker or wage earner to be given the same weight if each party has fulfilled its role;
(6) The value of the separate property of each party;
(7) The estate of each party at the time of the marriage;
(8) The economic circumstances of each party at the time the division of property is to become effective;
(9) The tax consequencesto each party, costs associated with the reasonably foreseeable sale of the asset, and other reasonably foreseeable expenses associated with the asset;
(10) The amount of social security benefits available to each spouse; and
(11) Such other factors as are necessary to consider the equities between the parties.
Tennessee courts use four factors to determine whether a house owned by one spouse before the marriage has been transformed into marital property: whether the property was used as a marital residence; the amount of on-going management and maintenance of the property contributed by both parties; whether title to the property was placed in joint ownership; whether the credit of the non-owner spouse was used to improve the property. The court considers the specific facts of each case to determine whether, based on these factors, separate property has turned into marital property. These factors were outlined in CYNTHIA LYNN LINER v. ROBERT CLIFFORD LINER, JR. No. M2010-00582-COA-R3-CV Tennessee Court of Appeals.
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