ASSET DIVISION

Marital asset division in Tennessee - a basic guide.

Marital asset division is one of the most complex and contentious issues in divorce. It involves determining how to fairly and equitably distribute the property and debts that the spouses acquired during their marriage. The laws and procedures for marital asset division vary by state, but generally follow some common principles. In this article, we will discuss some of the key factors and strategies that can affect the outcome of marital asset division in divorce.

One of the first steps in marital asset division is to identify and classify the assets and debts of the spouses. Assets include anything that has value, such as real estate, vehicles, bank accounts, investments, retirement accounts, businesses, personal property, etc. Debts include any obligations that the spouses owe, such as mortgages, loans, credit cards, taxes, etc. Some assets and debts may be considered marital or community property, which means they belong to both spouses and are subject to division. Other assets and debts may be considered separate property, which means they belong to one spouse and are not subject to division. Separate property typically includes anything that was owned by one spouse before the marriage, inherited by one spouse during the marriage, or gifted to one spouse by a third party during the marriage. However, separate property can become marital property if it is commingled or mixed with marital property, or if it is used for the benefit of the marriage.

The next step in marital asset division is to value the assets and debts of the spouses. This can be done by using various methods, such as appraisals, market values, expert opinions, tax returns, financial statements, etc. The value of some assets and debts may be easy to determine, such as bank accounts or credit cards. The value of other assets and debts may be more difficult to determine, such as businesses or retirement accounts. The value of some assets and debts may also change over time, such as real estate or investments. The spouses may agree on the value of their assets and debts, or they may dispute it and require the court to decide.

The final step in marital asset division is to allocate the assets and debts between the spouses. This can be done by using various criteria, such as equitable distribution or community property. Equitable distribution is a principle that aims to divide the marital assets and debts fairly and reasonably based on several factors, such as the length of the marriage, the income and earning potential of each spouse, the contributions of each spouse to the marriage (including homemaking and child care), the needs and circumstances of each spouse (including health and age), the tax consequences of each spouse, etc. Equitable distribution does not necessarily mean equal distribution; it depends on what is fair in each case. Community property is a principle that aims to divide the marital assets and debts equally between the spouses (50/50), regardless of any other factors. Community property is followed by a few states (such as California and Texas), while most states follow equitable distribution.

The state of Tennessee follows the principle of equitable distribution, which means that marital assets are divided fairly but not necessarily equally. Several factors are considered by the court when determining how to divide the assets, such as the duration of the marriage, the contribution of each spouse to the acquisition of the assets, the economic circumstances of each spouse, and the tax consequences of the division.

There are different strategies that can be used to achieve a favorable outcome in marital asset division. Some of these strategies include:

- Negotiating a settlement agreement with the other spouse. This can save time, money, and stress for both parties, as well as allow them to have more control over their own affairs. A settlement agreement can be reached through mediation, collaborative law, or direct communication between the spouses or their attorneys.

- Seeking professional advice from experts such as accountants, financial planners, appraisers, business evaluators, etc. These experts can help provide accurate and reliable information on the value and tax implications of various assets and debts.

- Protecting separate property from becoming marital property by keeping it separate from marital property (such as using separate bank accounts), documenting its source and history (such as using receipts or deeds), and avoiding using it for marital purposes (such as paying household expenses or improving marital property).

- Considering alternative forms of asset division such as buyouts (where one spouse pays the other spouse a lump sum for their share of an asset), offsets (where one spouse keeps an asset in exchange for giving up another asset of equal value), deferred distribution (where an asset is divided at a later date when its value is more certain), or creative solutions (such as co-owning an asset or trading assets for services).

Divorce and related family law is a complex topic. So we made a number of informational pages designed to help you and answer your questions as you move through the divorce process:

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