Generally, property which remains titled to one party, and which is not used to contribute to the family, and which is not funded with joint funds or ongoing income earned by either party during the marriage is generally considered separate property. By reverse definition, property that begins as separate property can become transmuted into marital property (absent a formal agreement such as the one before us) if the spouse contributes to the upkeep and maintenance of the other spouse’s property; if marital income (which includes the spouse’s own ongoing regular routine income) is used to maintain the spouse’s own property.
A division of marital property need not be precisely equal between and among the parties. The trial court’s decision must be guided by consideration of the statutory factors, which include:
- The duration of the marriage;
- The age, physical and mental health, vocational skills, employability, earning capacity, estate, financial liabilities and financial needs of each of the parties;
- The tangible or intangible contribution by one (1) party to the education, training or increased earning power of the other party;
- The relative ability of each party for future acquisitions of capital assets and income;
- (A) 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; (B) For purposes of this subdivision (C)(5), dissipation of assets means wasteful expenditures which reduce the marital property available for equitable distributions and which are made for a purpose contrary to the marriage either before or after a complaint for divorce or legal separation has been filed.
- The value of the separate property of each party;
- The estate of each party at the time of the marriage;
- The economic circumstances of each party at the time the division of property is to become effective;
- The tax consequences to each party, costs associated with the reasonably foreseeable sale of the asset, and other reasonably foreseeable expenses associated with the asset;
- The amount of social security benefits available to each spouse; and
- Such other factors as are necessary to consider the equities between the parties.
Despite the statutory factors, the division of marital property is not a mechanical process. Some statutory factors may be more relevant than others, on a case-by-case basis.
Separate property such as liquid assets become “comingled,” or transferred into marital property if one spouse uses his or her own proceeds, inheritance, or separate accounts for the upkeep and maintenance of marital property. In the case of comingling, the separate account from which the liquid assets came would not generally become marital property, but the amount of proceeds which are extracted from said separate account and are then poured into use or debts of marital property would comingle the extracted funds.
This is a very condensed explanation of the law in Tennessee, but suffice to say that any money you make at your day to day job during the marriage would normally be considered “marital income,” and should typically not be comingled or maintained with property you intend to keep separate, or the entire account in which marital income is deposited would likely be considered to have been converted once marital funds are intricately mixed in, and not easily divided back out. Likewise, any settlements, inheritance, proceeds from the sale of separate property, or other liquid or personal assets which you wish to maintain as your separate property not subject to division in the event of divorce must be safely protected and stowed away from any joint or marital accounts.
Call us at 615-649-0049 for a free consultation if you are getting married and want to discuss the possibility of prenuptial agreement; if you are already ready married and are about to receive an inheritance or new business proceeds; or, if you are considering filing for divorce and want to know your rights!