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The difference between marital and separate property in a divorce

Unless you have an ironclad prenuptial agreement on record or your divorce is uncontested, there are often many uncertainties involved with filing for divorce. If you have children, you may worry about how the courts will divide custody and parenting time. You will also need to consider how the courts will divide your assets.

If you and your spouse can't agree on terms for how to divide your assets, such as your marital home, your bank accounts, your vehicles and your retirement account, the Tennessee family courts will need to make these critical decisions for you. While every divorce is different, understanding how the courts approach the process can help you understand what to expect.

Tennessee courts strive for equitable distribution

Every state has its own unique laws about and approach to asset division during a divorce. In Tennessee, the law instructs the courts to seek a way to fairly and equitably divide all marital assets. Equitable and fair does not mean 50/50 division of all assets.

The courts will consider a number of factors, including the length of your marriage, the contributions of each spouse to the family, including unpaid contributions as a homemaker or stay-at-home parent, the income of each spouse and the likely future economic circumstances of each spouse. All of this will help them determine the best and most fair means of dividing the marital assets.

Some kinds of property only belong to one spouse

In general, the courts can only divide assets classified as marital property. Separate property is typically exempt from any kind of division during a divorce, although there are some exceptions to this rule. Separate property includes assets, including real estate, owned prior to the marriage.

Separate property also includes any gifts or inheritances, whether received before or during the marriage, court-awarded assets related to an injury lawsuit or being the victim of a crime, and any assets acquired by liquidating separate property during the marriage.

In cases where real estate, such as the marital home or other significant investments, are separate property, the courts may treat it as marital property if the other spouse substantially contributed to the preservation and appreciation of the asset. The same is true of certain other separate assets.

Marital property covers almost everything acquired during marriage

With the exception of appreciation to separate property, such as interest or an increase in property value, most assets acquired during marriage will be marital property for the purposes of divorce. Even assets that only one spouse directly contributed to, like a retirement account or pension, could get divided by the courts.

The exception to this is, of course, a deposit to an account made prior to marriage. The court will typically exempt the balance of a retirement or investment account at the beginning of a marriage from inclusion in the marital property pot.

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